The 2017 Model Law on Electronic Transferable Records (MLETR) provides a framework for aligning national laws. While a framework is a crucial step away from a solution, developments in electronic Bills of Lading (eBLs) is an example of the MLETR’s utility in practice.
At the International Trade Forfaiting Association’s (ITFA) 2024 Christmas party, Deepesh Patel (DP), Editorial Director at Trade Finance Global (TFG) spoke to Pamela Mar (PM), Managing Director of the International Chamber of Commerce’s (ICC) Digital Standards Initiative (DSI). She examined challenges to MLETR adoption, how investment poses a solution, and realised the impacts of the model legislation on trade document digitalisation.
DP: What have been the biggest challenges and solutions with adopting MLETR?
PM: MLETR is deceptively simple because, if you already have an electronic transactions ordinance covering digital signatures and digital transactions, all you need is an amendment, and the amendment isn’t long. It seems straightforward, but the legislation is just the framework for enabling trade digitalisation—it’s not enough to just implement the legislation.
Every government needs to diligently engage with the business sector and coordinate across government departments to ensure that the envisioned changes—trade digitalisation—take root. This requires capacity building, work on standards and interoperability, and integration with systems like the customs single window. It cuts right to the core of government operations. Without this kind of engagement, the changes envisioned under MLETR won’t happen.
So, while it’s important to get the legislation right in any roadmap for MLETR, we believe that business engagement and cross-government collaboration are just as critical. Otherwise, you won’t see any change.
DP: One big part of MLETR adoption is ensuring reliable technology is in place to manage electronic documents. Why is it significant? What’s ICC/DSI doing about it?
PM: As trade digitalises towards a decentralised ecosystem, different systems and networks are increasingly interconnected through data. This is the core focus of interoperability. The assumption is no longer that we will all trade on a single centralised system. The challenge, then, is how to move towards decentralisation while ensuring we all adhere to common principles for security, governance, and the reliability of data transactions. You need to ensure that different systems, used at various points in the supply chain, align with a shared set of principles; and this is set out in the MLETR as the requirements of a reliable system.
The MLETR specifies three key aspects:
- Singularity, that there is only one version of the record, with a single original electronic record.
- Integrity, that the record has not been tampered with or altered, and any changes are fully documented using technology.
- Control, that at any given time, only one party has possession of the record.
Because systems need to prove their reliability in order for businesses to build confidence in transacting through them, DSI developed a reliable systems assurance framework, which is basically a self-assessment. This framework was created in collaboration with one of the world’s leading authorities on digital trust, the Digital Governance Council (DGC), which operates under Standards Canada.
In partnership with DGC, DSI established a working group consisting of auditors, industry representatives, platform operators, and standards authorities—experts in assessment systems and reliability content. Together, they created the framework, which was piloted over the summer by eight different trade platforms and systems. In October, the first Statement of Verification was officially released. It’s a self-assessmnet, but if you submit your result to us, we will issue a ‘statement of verification’ after conducting an expert review.
DP: The results have been published from your recent EBL survey, can you talk them through?
PM: The EBL survey is particularly significant because the first survey was conducted in 2022, prior to the Electronic Trade Documents Act, before many U.S. states adopted the UCC amendments, and before developments in France. At that time, the survey—organised by the FIT Alliance, which includes BIMCO, DCSA, FIATA, Swift, and ICC—aimed to promote EBL adoption.
The first survey, conducted in autumn 2022 showed that about a third of respondents were either exclusively using EBL or using both paper and EBL. The latter group did so because some customers preferred paper while others opted for EBL. In total, 33% were using EBL in some capacity.
I’m pleased to share that the most recent survey, which concluded on 31 October 2024, found that 49.5% of respondents were now using both EBL and paper. For me, this indicates that we’re nearing a tipping point. If EBL isn’t already part of your supply chain strategy, it really should be. I anticipate that within two years, we’ll be well on the way to 70–80%, which is really good progress.
That said, it’s important to remember that EBL is just one of the earliest and most harmonised digitalised documents. There are 35 other key documents in trade. At DSI, we’re focusing on how to measure progress in these other critical areas. While transport and shipping are covered through the EBL survey, we also need to address finance and payments, compliance at the border, and general policy.
We’re working hard with the government and private sector to drive digitalisation in practice. But we need to be realistic about whether our efforts are leading to real impact, which is why metrics will be a big part of our work next year. I hope to be able to update you on the progress in 2025!
