Singapore has recently refreshed their Electronic Transactions Act (Chapter 88) (ETA) to enhance business' and citizens' certainty, use of, and reliance on electronic transactions. This is the second comprehensive review of the ETA since it was first enacted 1998 and seeks to position Singapore competitively in the digital economy.
The Electronic Transactions Amendment Bill implements the UNCITRAL Model Law on Electronic Transferable Records (2017) which seeks to facilitate the legally recognised use of electronic transferable documents domestically and internationally. 'Transferable documents' are paper-based documents which give rights, to the person who has the document in their possession, to claim the performance of certain obligations. Typically, this includes bills of lading, bills of exchange and promissory notes.
Previously, these documents have been excluded documents under the ETA but the ETA's expansion now allows these to be transacted digitally and potentially under smart contracts in the future.
Digitising trade
This is likely to have significant impacts for streamlining trade which is significant for Singapore as a major trade and financial hub. The ETA will have flow on amendments for the Bills of Lading Act and Contracts (Rights of Third Parties) Act. The Ministry of Communications and Information anticipates that the electronic Bills of Lading alone will impact the shipping industry by allowing for:
faster transactions, cost savings (e.g. reduced administrative cost of cargo holding and document processing) and lowered fraud risks (through the use of digital authentication systems).
Singapore has been involved in digital trade for some time and in 2019 conducted a successful pilot trade of US$20 million worth of iron ore shipped from South Africa to China. This was conducted on IMDA's TradeTrust utility which is a blockchain platform where parties can communicate their trade instructions in real time. This pilot reduced the end-to-end trade document transit time from 45 days to 20 days.
Expanding the ETA
As Singapore considers expanding the ETA's applicability further (by reducing excluded documents) it is important that other countries consider how they can also adopt the UNCITRAL Model Law to assist global trade. John W.H Denton, Secretary General of the International Chamber of Commerce put it best when he stated that:
The far-reaching impacts of the pandemic have made clear that policymakers must retire out-dated paper-based processes and embrace the advantages of digital trade. We strongly ask policymakers in both Singapore and abroad to enact UNCITRAL’s Model Law on Electronic Records to enable paperless trade and accelerate the global recovery.
In Australia electronic transactions have been governed by our own Electronic Transactions Act 1999 (Cth). This has allowed for electronic transmission largely for individuals but has previously presented barriers around documents such as Deeds and documents executed by companies.
COVID -19 presented some welcome temporary measures easing the paper-based compliance for these kinds of documents, however in order to align with the UNCITRAL's Model Law it is fitting that these not only be made permanent measures but continue to be expanded to give business the ability to transact as electronically as possible.
Comentários