The Electronic Trade Documents Act – What you should know

The highly anticipated Electronic Trade Documents Act (ETDA) received Royal Assent on the 20th July 2023, the final step necessary for the bill to become an Act of Parliament. The ETDA will apply to both large businesses and SMEs in the UK as it innovates international trading.

The Act aims to modernise and overhaul outdated laws surrounding the use of electronic trade documents in international trading. Until now, only paper documents have been legally accepted for the transfer in ownership of shipped goods under English and Welsh laws dating back to the 1800s. The ETDA looks to put electronic trade documents on a legal par with their paper counterparts, making trade more efficient, cost effective and environmentally sustainable.

The government estimates the new law will generate a £1 billion boost for the UK economy over the coming decade, describing the ETDA as, ‘a cornerstone to not only revolutionising how the UK trades, but to digitalising trade across the world’. Through utilising modern technology to increase security and the increased efficiency of going paperless, it is hoped that the introduction of this Act will have a massive impact on digitising global trade.

So, what should you know?

The new law allows electronic trade documents to be treated the same as paper documents and also allows for paper trade documents to be converted into digital copies. For an industry that is estimated to generate billions of paper documents a year, this is revolutionary. Digitising trade documents provides the opportunity for businesses to trade on shorter time frames and reduce the chance that important documents may be misplaced, subsequently delaying supply times. The use of technology may also mean higher security on business sensitive documents, compared with paper copies.

Under the new ETDA, electronic documents will only be treated as paper documents if businesses meet the following conditions:

  • information in the electronic form must be the same as would be contained in the paper version;
  • a reliable electronic trade document system must be implemented;
  • document integrity must be protected against alteration or interference; and
  • only one person may exercise control of the document at any one time.

Provided the above criteria are met, electronic trade documents can be used to enforce contractual rights, such as delivery of goods or payments of costs, in the same way as their paper equivalents.

 How should your business prepare?

If your business is involved in international trading, the introduction of the ETDA into English and Welsh law will likely impact the way you trade. The government predicts that it can take up to 7 days to process a paper trade document, with this time frame reduced to 10 minutes when documents are digitised. The Digital Container Shipping Association suggest that costs associated with paper trade documents are 3 times greater than the use of electronic versions. Therefore, the ETDA presents a clear opportunity for your business to save both time and money.

With this in mind, we would suggest taking practical steps to maximise the benefits of the new law, such as:

  • Reviewing and refining existing supply contracts – ensure that existing contracts are compliant with the new legislation and refine clauses to allow the use of electronic documentation.
  • Assess your current trade practices – introducing the use of electronic documents may require making changes to your business operation.
  • Get comfortable with new technology – the ETDA requires the use of a reliable electronic trade document system and sufficient security on electronic documents, meaning that technologies such as electronic signature software or document management systems will need to be utilised.
  • Talk to your commercial lawyers – consider asking your lawyers to perform reviews of current contracts or draft new commercial contracts in line with the new legislation.

The Commercial & IP Team at Berry Smith can provide specialist advice on commercial contracts, as well as general commercial and business advice.

Please contact us if you would like more information about the issue raised in this article or any other aspect of Commercial law at 029 2034 5511 or