Electronic Trade Documents Bill [ Lords ]

Alex Davies-Jones Excerpts

Monday 12th June 2023 General Committees

[Alex Davies-Jones (Pontypridd) (Lab)]

I will keep my comments brief. As colleagues in the other place noted, this is a modest but incredibly important Bill. Its simple objective is to afford electronic trade and trade finance documents the same legal status as paper ones. This Bill, which has been drafted and crafted by the Law Commission, provides for the possessability of electronic documents that fall within its scope; they will have the same legal recognition and functionality as their paper counterparts. It also sets out provisions relating to the use of electronic trade documents, including provisions on indorsement and change of medium between electronic and paper documents.

The Bill’s terminology—“bill of lading”, “bill of exchange” and “mate’s receipt”—shows that we are talking about very out-of-date practices. Practices governing the exchange of goods date back centuries, and the language involved would not be alien to a merchant from the middle ages, so the Bill is very welcome indeed. Indeed, we all know the barriers to trade across borders; the Minister mentioned them. Research shows that a single trade finance transaction can involve 20 entities and between 10 and 20 paper documents. That all adds up.

In 2019 there were roughly 160,000 exporting businesses in the UK, exporting £367 billion-worth of goods and employing 10.2 million people. By the mid-2030s, that number could hopefully rise to 190,000 businesses. Paper trading involves not only volumes of paper, but time-consuming processes. A study in Singapore found that it took between four hours and seven days to process one paper trade document. Digitisation can reduce that to as little as 10 minutes.

In total, it is estimated that 25 billion paper documents are generated and couriered around the world annually just to facilitate container shipping. The Minister does not need me to remind him of the significant environmental costs, but they are colossal. That is why we support the Bill in its entirety. We see it as a long overdue reform that allows for the legal recognition of certain types of documents used in trade and trade finance in electronic form. It means that parties can finally use laws that apply to paper trade documents when transacting with electronic trade documents.

The Law Commission does important work in advising on the reform of long-outdated legislation, and I am grateful for its work on the Bill. Colleagues in the other place have raised concerns about how the law will be implemented, so I hope to hear from the Minister which Department will be responsible for overseeing and enabling the provisions, once they are on the statute book. The Bill is a valuable tool for ensuring that the world of trade and commerce operates smoothly and efficiently, and that UK businesses are not disadvantaged in any way.