Digital trade documents: MLETR, eUCP and Swiss ledger-based securities

The problem of the paper original

The documentary system rests on the paper original. A bill of lading can be transferred only by delivering the paper with any necessary endorsement, and a bank can hold it as security only if it holds the paper. Electronic copies, PDF scans and data messages do not have this effect, because they can be copied without limit and no one can have exclusive control of them. For decades this legal fact frustrated attempts to digitize trade. Electronic bill of lading systems developed in the shipping industry worked only within closed networks whose members agreed by contract to treat electronic records as if they were paper. The banks' own electronic rules, the eUCP first published in 2002, allowed electronic presentation under documentary credits but could not give an electronic record the legal effects of a document of title.¹ The frauds of 2020, many of which involved forged, duplicated or copied paper documents, gave new urgency to the search for a legal solution.

The UNCITRAL Model Law and its reception

The United Nations Commission on International Trade Law (UNCITRAL) adopted the Model Law on Electronic Transferable Records (MLETR) on 13 July 2017. Its principle is functional equivalence. An electronic record can perform the function of a transferable document, such as a bill of lading, a bill of exchange or a warehouse receipt, if it contains the information required in that document and a reliable method is used to identify it as the electronic transferable record and to render it capable of being subject to control from its creation until it ceases to have effect. The method must also retain its integrity. Control of the record replaces possession of the paper, and it requires a reliable method to establish exclusive control by a person and to identify that person. By late 2025 UNCITRAL listed thirteen jurisdictions that had enacted legislation based on or influenced by the Model Law. They include Bahrain (2018), Singapore and the Abu Dhabi Global Market (2021), the United Kingdom (2023), France (2024) and China (2025). Switzerland and Germany were not on the list.²

The British Electronic Trade Documents Act 2023, which entered into force on 20 September 2023, is the most important reception for commodity trade. English law governs most bills of lading, charter parties and sale contracts in the trade, so the Act affects transactions far beyond the United Kingdom. It allows an electronic document to be a trade document if it is held on a reliable system that permits exclusive control and divestment of the document.³ The ICC followed by aligning its electronic rules with the Model Law. In 2023 it published version 2.1 of the eUCP and version 1.1 of the eURC, which define an electronic record as including an electronic transferable record. Such a record contains the information that would be required in the equivalent paper document, such as a negotiable bill of lading or an assignable insurance document.⁴ The eUCP applies only where the credit incorporates it. A credit subject to the eUCP is also subject to UCP 600 without express incorporation, and the eUCP prevails where the two conflict (Arts. e1 and e2 eUCP). Special provisions deal with the data corruption of an electronic record, with an additional disclaimer of liability for the presentation of electronic records and with force majeure (Arts. e12 to e14 eUCP).⁵

Notes

1. ICC, Supplement to UCP 500 for Electronic Presentation (eUCP), version 1.0 (2002); version 2.0 (2019). ↩
2. UNCITRAL, "Status: UNCITRAL Model Law on Electronic Transferable Records (2017)", https://uncitral.un.org/en/texts/ecommerce/modellaw/electronic_transferable_records/status (thirteen jurisdictions: Bahrain 2018; Belize, Kiribati, Paraguay, Singapore and Abu Dhabi Global Market 2021; Papua New Guinea 2022; United Kingdom 2023; France and Timor-Leste 2024; China, Marshall Islands and Mauritius 2025); UNCITRAL, "UNCITRAL Model Law on Electronic Transferable Records (2017)", https://uncitral.un.org/en/texts/ecommerce/modellaw/electronic_transferable_records (adoption on 13 July 2017; MLETR, Arts. 10 and 11 on functional equivalence and control). ↩
3. Hill Dickinson, "UK's Electronic Trade Documents Act now in force", https://www.hilldickinson.com/insights/articles/uks-electronic-trade-documents-act-now-force (in force 20 September 2023, two months after royal assent; the Act lists considerations for assessing whether a system is reliable). Electronic Trade Documents Act 2023, c. 38, s. 2 (exclusive control, divestment). ↩
4. Trade Finance Global, 3 July 2023 (above) (new sub-article e3(b)(v): "Electronic transferable record means an electronic record that contains the information that would be required in the equivalent paper document, such as a negotiable bill of lading or an assignable insurance document"). ↩
5. ICC, Uniform Customs and Practice for Documentary Credits for Electronic Presentation (eUCP) Version 2.1 , ICC Publication No. 823E (April 2023), https://iccwbo.org/wp-content/uploads/sites/3/2022/03/823E_eUCP_FInal.pdf ("An eUCP credit is also subject to the UCP without express incorporation"; Art. e2: "Where the eUCP applies, its provisions shall prevail to the extent that they would produce a result different from the application of the UCP"; headings of Arts. e12 to e14). On eURC version 1.1 of 29 June 2023 see ICC (above). ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.