UNCITRAL Model Law on Electronic Transferable Records

A study on the impact of the adoption of a law aligned to the MLETR in the United Kingdom has quantified the benefits of such adoption. Besides economic benefits, which include up to £224 billion in efficiency savings, adoption of such legislation may reduce the number of days needed for processing trade documents by up to 75%.{{cite web |last1=Harding |first1=Rebecca |title=Creating a modern digital trade ecosystem |url=https://cdn.shopify.com/s/files/1/2992/1976/files/ICCUK-Coriolis-MLETR-Alignment-UK_Business_Case.pdf |publisher=Coriolis for ICC UK |access-date=26 May 2021}}

The impact assessment of the Electronic Trade Documents Bill (see below) prepared by the UK Government estimates in the next 10 years economic benefits ranging from a low estimate of 249.8 million pounds to a high estimate of 2,049.7 million pounds, with a best estimate of 1,137.0 million pounds.{{cite web |title=Impact assessment of the Electronic Trade Documents Bill |url=https://www.gov.uk/government/publications/electronic-trade-documents-bill-impact-assessment/impact-assessment-of-the-electronic-trade-documents-bill |publisher=UK Government, Department for Digital, Culture, Media & Sport |access-date=2 January 2023}}

At the micro-economic level, a study describing 16 case studies of application of the UK Electronic Trade Documents Act (which is aligned with MLETR) and associated economic benefits is available.{{cite book |title=Seizing the moment — Unleashing the potential of trade digitalisation |date=November 2023 |publisher=ICC UK, Centre for Digital Trade and Innovation |url=https://iccwbo.uk/wp-content/uploads/2024/04/Seizing_the_moment_Unleashing_the_power_of_trade_digitalisation_report.pdf |access-date=3 May 2024}}

== Main provisions ==

The MLETR is divided in four chapters: general provisions; provisions on functional equivalence; use of electronic transferable records; and cross-border recognition of electronic transferable records.

The MLETR is built on the same fundamental principles of other UNCITRAL texts on electronic commerce, namely functional equivalence (articles 8-11 MLETR), technology neutrality and non-discrimination against the use of electronic means (article 7 MLETR).

The MLETR is also model-neutral and may be implemented by using registries, tokens or distributed ledgers.{{cite book |last1=UNCITRAL |title=Explanatory Note to the UNCITRAL Model Law on Electronic Transferable Records |date=2017 |location=Paragraph 18 |url=https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/mletr_ebook.pdf |access-date=27 January 2019}} The Explanatory Note to the MLETR provides some guidance on the use of distributed ledgers in implementing the MLETR and is therefore considered an early example of legislative text facilitating the use of blockchain.{{cite book |last1=UNCITRAL |title=Explanatory Note to the UNCITRAL Model Law on Electronic Transferable Records |date=2017 |location=Paragraphs 66, 78, 117 |url=https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/mletr_ebook.pdf |access-date=27 January 2019}}{{cite web |last1=Takahashi |first1=Koji |title=Relevance of the blockchain technology to the draft Model Law on Electronic Transferable Records (as acknowledged by the latest official document) |url=https://blockchaincryptolaw.wordpress.com/2017/04/18/relevance-of-the-blockchain-technology-to-the-draft-model-law-on-electronic-transferable-recores-as-acknowledged-by-the-latest-official-document/ |website=Blockchain, Cryptocurrency, Crypto-asset and the Law |date=18 April 2017 |access-date=12 February 2019}}

Article 2 MLETR defines the notion of electronic transferable record as an electronic record that complies with the requirements of article 10 MLETR. It also defines "transferable document or instrument" as a document that entitles its holder to the payment of a sum of money or the delivery of goods.

Article 6 MLETR legally recognizes the possibility of including metadata in electronic transferable records. It is therefore considered a smart contract enabler.{{cite web |last1=Ng |first1=Irene |title=UNCITRAL E-Commerce Law 2.0: Blockchain and Smart Contracts |url=https://lawtech.asia/uncitral-e-commerce-law/ |website=LawTech.Asia |date=22 April 2018 |access-date=28 December 2018}}

Articles 8 and 9 MLETR provide functional equivalence rules, respectively, for the paper-based notions of "writing" and "signature". Those articles do not need to be enacted if national law, for instance an electronic transactions act, already contains those notions and they are made applicable by reference to electronic transferable records.

Article 10 MLETR establishes the conditions for functional equivalence between paper-based transferable documents and instruments, on the one hand, and electronic transferable records, on the other hand. Those conditions are:

1) the electronic transferable record shall contain all information required for the corresponding paper-based transferable document or instrument;

2) a reliable method shall be used:

a) to identify the electronic transferable record as such;

b) to render the electronic transferable record subject to control throughout its life-cycle;

c) to retain the integrity of the electronic transferable record throughout its life-cycle.

Article 11 MLETR establishes the functional equivalence rule for possession of a transferable document or instrument. The conditions to satisfy that requirement are the use of a reliable method to establish exclusive control of the electronic transferable record and the identification of the person in control.

Article 10 and 11 MLETR are based on the notions of "control" and "singularity" of the electronic transferable record.{{cite book |last1=UNCITRAL |title=Explanatory Note to the UNCITRAL Model Law on Electronic Transferable Records |date=2017 |location=Paragraph 83 |url=https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/mletr_ebook.pdf |access-date=11 January 2019}}

In general, all events that may occur in relation to a transferable document or instrument may also occur in relation to an electronic transferable record.{{cite book |last1=UNCITRAL |title=Explanatory Note to the UNCITRAL Model Law on Electronic Transferable Records |date=2017 |location=Paragraph 11 |url=https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/mletr_ebook.pdf |access-date=11 January 2019}} Articles 15 and 16 MLETR reaffirm that general rule with respect to, respectively, endorsement and amendment of an electronic transferable record. The amendment should be identified as such as otherwise the electronic nature may not make the amendment easily recognisable.

Article 12 MLETR contains a non-exclusive list of elements relevant to assess the reliability of the method used. It contains also a safety clause that indicates that a method is reliable in fact if it has fulfilled the function it pursued, alone or with other evidence.

Article 19 MLETR contains a provision on geographic non-discrimination of the electronic transferable record. The provision does not affect private international law rules.

The MLETR has been enacted in Bahrain,{{cite web |last1=Takahashi |first1=Koji |title=Bahraini legislation based on the UNCITRAL MLETR |url=https://blockchaincryptolaw.wordpress.com/2019/02/12/bahraini-legislation-based-on-the-uncitral-mletr/ |website=Blockchain, Cryptocurrency, Crypto-asset and the Law |date=12 February 2019 |access-date=12 February 2019}} in Belize,Act No. 25 of 2021 – Electronic Transactions, available at https://www.nationalassembly.gov.bz/wp-content/uploads/2021/10/Act-No-25-of-2021-Electronic-Transaction.pdf in France,{{cite web |title=Financement des entreprises et attractivité de la France |url=https://www.senat.fr/dossier-legislatif/ppl23-536.html |publisher=Senat |access-date=9 June 2024}} in Kiribati,Electronic Transactions Act, 2021, available at https://www.president.gov.ki/images/Gazettes/gaz2021/Electronic_Transactions_Act_2021.pdf in Paraguay,{{cite journal |title=LEY Nº 6.822.- DE LOS SERVICIOS DE CONFIANZA PARA LAS TRANSACCIONES ELECTRÓNICAS, DEL DOCUMENTO ELECTRÓNICO Y LOS DOCUMENTOS TRANSMISIBLES ELECTRÓNICOS. |journal=Gaceta Oficial |date=2 January 2022 |issue=2 |page=2 |url=http://www.gacetaoficial.gov.py/}} in Papua New Guinea,{{cite web |title=Electronic Transactions Act, No. 38 of 2021 |url=http://www.parliament.gov.pg/index.php/bills-and-legislation/view/electronic-transactions-act-2021 |access-date=10 March 2022}} in Singapore,Electronic Transactions (Amendment) Bill, Bill No. 1/2021 in Timor-Leste,DECRETO-LEI N.º 12 /2024 de 13 de Fevereiro, REGIME JURÍDICO GERAL DO COMÉRCIO ELETRÓNICO E DE ASSINATURAS ELETRÓNICAS in the United Kingdom,Electronic Trade Documents Act, 2023 and in the Abu Dhabi Global Market (ADGM), an International Financial Centre located in Abu Dhabi, United Arab Emirates.{{cite news |title=ADGM enacts Electronic Transactions Framework |url=http://wam.ae/en/details/1395302914219 |access-date=2 March 2021 |agency=Emirates News Agency |date=28 February 2021}}

The adoption of the MLETR in Bahrain has taken place in conjunction with a review of the Electronic Transactions Act, which was originally passed in 2002 and is based on the UNCITRAL Model Law on Electronic Commerce.{{cite news |title=Queen Mary experts contribute to legal reform in Bahrain |url=https://www.qmul.ac.uk/media/news/2018/hss/queen-mary-experts-contribute-to-legal-reform-in-bahrain.html# |access-date=13 January 2019 |publisher=QMUL |date=14 December 2018}}

Singapore had conducted two public consultations prior to enactment, the first in March 2017{{cite web |title=Public Consultation on the Draft UNCITRAL Model Law on Electronic Transferable Records |url=https://www.imda.gov.sg/-/media/imda/files/inner/pcdg/consultations/consultation-paper/public-consultation-paper---uncitral-model-law-on-etrs_10-march-2017.pdf?la=en |website=IMDA |publisher=Singapore Government |access-date=28 December 2018}} and the second in summer 2019, in the broader framework of the review of the Electronic Transactions Act.{{cite web |title=CONSULTATION PAPER ISSUED BY THE INFOCOMM MEDIA DEVELOPMENT AUTHORITY ON REVIEW OF THE ELECTRONIC TRANSACTIONS ACT (ETA) (CAP. 88) 27 June 2019 |url=https://www.imda.gov.sg/-/media/Imda/Files/Regulation-Licensing-and-Consultations/Consultations/Consultation-Papers/Public-Consultation-on-the-Review-of-the-Electronic-Transactions-Act/Public-Consultation-Paper-on-the-Review-of-the-Electronic-Transactions-Act-27-Jun-2019.pdf |publisher=IMDA |access-date=19 September 2019}}

In Thailand, the Cabinet has approved the inclusion of the MLETR in the Electronic Transactions Act.{{cite web |last1=Dhiraphol Suwanprateep, Pattaraphan Paiboon and Khunawut Tongkak |title=The Cabinet approved new principles for an amendment to the Electronic Transactions Act B.E. 2544 (2001) |date=18 November 2021 |url=https://www.lexology.com/library/detail.aspx?g=157c937b-6292-4fdf-a5b7-b3c3d13a7400 |publisher=Baker McKenzie |access-date=18 November 2021}} Czechia has conducted a public consultation on MLETR adoption.{{cite web |title=Veřejná konzultace k možnosti zavedení elektronického ekvivalentu cenného papíru, který není investičním nástrojem |url=https://www.mpo.cz/cz/zahranicni-obchod/mezinarodni-organizace-a-obchod/uncitral/verejna-konzultace-k-moznosti-zavedeni-elektronickeho-ekvivalentu-cenneho-papiru--ktery-neni-investicnim-nastrojem--234448 |website=Ministerstvo průmyslu a obchodu |access-date=28 December 2018}}

The International Chamber of Commerce (ICC) has been promoting actively adoption of the MLETR. Initially, this was done to facilitate the use of electronic bills of lading as recommended in a report by the law firm Clyde & Co and the ICC Banking Commission.{{cite web |title=The Legal Status of E-Bills of Lading |url=https://www.clydeco.com/insight/reports/the-legal-status-of-e-bills-of-lading |website=Clyde & Co. |access-date=28 December 2018}} MLETR adoption is now being actively promoted by the ICC Digital Standards Initiative (DSI), including as a manner to overcome the effects of the COVID-19 pandemic and to increase supply chain resilience. ICC DSI offers also guidance on MLETR implementation, including technical standards and business practices.{{cite web |title=The ICC Digital Standards Initiative |url=https://www.dsi.iccwbo.org/ |publisher=International Chamber of Commerce |access-date=25 June 2021}}

On 28 April 2021 the UK, Canada, France, Germany, Italy, Japan, the US and the European Union adopted a G7 Digital and Technology Ministerial Declaration{{cite web |title=G7 Digital and Technology - Ministerial Declaration |url=https://www.gov.uk/government/publications/g7-digital-and-technology-ministerial-declaration |publisher=UK Department for Digital, Culture, Media & Sport |access-date=10 June 2021}} to develop a framework for the use of electronic transferable records that promotes the adoption of legal frameworks compatible with the principles of the MLETR.

On 11 May 2022, the G7 Digital Ministers adopted a Ministerial Declaration{{cite web |title=MINISTERIAL DECLARATION G7 Digital Ministers' meeting 11 May 2022 |url=https://www.bmvi.de/SharedDocs/DE/Anlage/K/g7-praesidentschaft-final-declaration.pdf?__blob=publicationFile |publisher=German Federal Ministry for Digital and Transport |access-date=31 May 2022}} endorsing the “Principles for domestic legal frameworks to promote the use of electronic transferable records” contained in Annex 2 to the Declaration.{{cite web |title=G7 Digital Ministers' Track - Annex 2 Principles for domestic legal frameworks to promote the use of electronic transferable records |url=https://www.bmvi.de/SharedDocs/DE/Anlage/K/g7-praesidentschaft-final-declaration-annex-2.pdf?__blob=publicationFile |publisher=German Federal Ministry for Digital and Transport |access-date=31 May 2022}}

The G7 declarations have prompted the consideration of MLETR adoption in G7 member States, with significant impact:

• In the UK, the Electronic Trade Documents Act, 2023, has entered into force on 20 September 2023;{{cite web |title=Electronic Trade Documents Bill [HL] Government Bill |url=https://bills.parliament.uk/bills/3344 |publisher=UK Parliament |access-date=5 April 2023}}
• In Germany, a regulation implementing existing provisions on electronic bills of lading, warehouse receipts and other transferable documents has been drafted; the regulation implements core MLETR provisions;{{cite web |title=Elektronische Transport- und Warenwertpapiere in Deutschland: Reformen und Verordnung als Katalysator des Papierlosen Handels |url=https://www.iccgermany.de/wp-content/uploads/2022/03/Creating-a-Modern-Digital-Trade-Ecosystem-German-Verion.pdf |publisher=ICC Deutschland |access-date=1 January 2023}}
• In France, a report recommending the adoption of MLETR has been prepared and the relevant ministries have accepted it with a view to its prompt implementation.{{cite web |title=Remise du rapport Paris Europlace " Accélérer la digitalisation des activités de financement du commerce international " |date=30 June 2023 |url=https://presse.economie.gouv.fr/30062023-cp-remise-du-rapport-paris-europlace-accelerer-la-digitalisation-des-activites-de-financement-du-commerce-international/ |publisher=Ministère de l’économie, des finances et de la souveraineté industrielle et numérique |access-date=22 July 2023}} On that basis, a bill has been adopted;
• In Japan, a study group was set up to consider the adoption of the MLETR with regard to bills of lading.{{cite web |last1=Yamashita |first1=Kazuya |title=[COLUMN] Current Status of consideration of electronic B/L legislation－in light of the interim Draft－ |url=https://www.piclub.or.jp/en/news/37287 |website=Japan P&I Club |access-date=22 July 2023}}

With respect to use in business practice, one provider has started offering issuance of electronic bills of lading based on Singapore law incorporating MLETR and approved by the International Group of P&I Club as of 1 July 2021.{{cite web |title=essDOCS updates CargoDocs User Agreement (DSUA 2021.1) to incorporate Singapore law recognizing electronic Bills of Lading |url=https://www.essdocs.com/blog/essdocs-updates-cargodocs-user-agreement-dsua-20211-incorporate-singapore-law-bills-lading |website=essDOCS |access-date=25 June 2021}} These electronic bills of lading issued under the law of Singapore and MLETR have been used for the first time to cover shipments from Australia to China.{{cite web |title=essDOCS enables first ever electronic Bill of Lading transaction under Singapore Law |url=https://www.essdocs.com/blog/essdocs-enables-first-electronic-bill-lading-transaction-singapore-law |publisher=essDocs |access-date=1 January 2023}}

In Bahrain, an electronic check system has been launched based on MLETR provisions incorporated in Bahraini law. It allows issuing, endorsing and presenting electronic checks on mobile phones and other devices.{{cite web |last1=Agarwal |first1=Gargi |title=Bahrain Electronic Cheque System – An Overview |url=https://www.tamimi.com/law-update-articles/bahrain-electronic-cheque-system-an-overview/ |publisher=Al Tamimi and Co |access-date=1 January 2023}}

{{reflist}}

• {{cite journal |last1=Šafranko |first1=Zvonimir |title=The Notion of Electronic Transferable Records |journal=InterEULawEast: Journal for the International and European Law, Economics and Market Integrations |date=2016 |volume=3 |issue=2 |pages=1–31 |url=https://repozitorij.unizg.hr/en/islandora/object/efzg%3A2533 |access-date=11 January 2019}}
• {{cite journal |last1=Herd |first1=Jake |title='Blocks of Lading' Distributed Ledger Technology and the Disruption of Sea Carriage Regulation |journal=QUT Law Review |date=2018 |volume=18 |issue=2 |pages=306–317 |doi=10.5204/qutlr.v18i2.755 |url=https://lr.law.qut.edu.au/article/view/755/715 |access-date=2 April 2019|doi-access=free }}
• {{cite web |author1=Luca Castellani |author2=Sin Yong LOH |author3=Louise Taylor-Digby (moderator) |title=Joining forces for trade digitisation: SWIFT, the United Nations, and the Singapore Government |url=https://www.swift.com/swift-at-sibos/joining-forces-trade-digitisation |website=SWIFT |date=5 Oct 2020}}
• {{cite web |title=Creating a Modern Digital Trade Ecosystem Practical Guide to Legal Reform to Enable Electronic Transferable Records and Optimise Cross-Border Trade |url=https://www.dsi.iccwbo.org/policymakers |website=ICC Digital Standards Initiative |access-date=18 November 2021}}
• {{cite web |last1=UK G7 Presidency |title=Roadmap to reform for electronic transferable records |url=https://www.gov.uk/government/publications/uk-g7-presidency-roadmap-to-reform-for-electronic-transferable-records/uk-g7-presidency-roadmap-to-reform-for-electronic-transferable-records |access-date=18 December 2021}}
• {{cite web |title=Paperless International Trade: Achieving Harmony Between the Law and Technological Potential |url=https://www.cliffordchance.com/content/dam/cliffordchance/briefings/2021/12/paperless-international-trade-achieving-harmony-between-the-law-and-technological-potential.pdf |publisher=Clifford Chance |access-date=1 January 2023}}
• {{cite book |title=White Paper on the Transfer of Model Law on Electronic Transferable Records-Compliant Titles |date=9 September 2023 |publisher=UN CEFACT |url=https://unece.org/sites/default/files/2023-09/WhitePaper_Transfer-MLETR.pdf |access-date=24 October 2023}}
• {{cite book |last1=Ramirez Ortiz |first1=Carmen Maria |last2=Castellani |first2=Luca |title=Driving Digitalization of Global Trade: UNCITRAL Model Law on Electronic Transferable Records |date=18 December 2023 |publisher=ADB |isbn=978-92-9270-518-3 |pages=12 |url=http://dx.doi.org/10.22617/BRF230576-2 |access-date=18 December 2023}}

Category:Uniform Acts

Category:Records management

Category:Uniform Model Acts