Electronic Bills of Lading: Will they be the game-changer as expected?

The UK Electronic Trade Documents Act (The Act), passed in September 2023 is set to create some foundational changes in the way banks handle Trade Finance transactions going forward. This will create a legal framework for parties to operate under and potentially reduce inefficiencies that have inherently existed in the trade processes and digitization of trade documents.

The Act covers all documents in trade that confer ownership of goods or are required for financing such trade. Examples of such documents are bills of lading, bills of exchange, promissory notes, warehouse receipts, mate’s receipt marine insurance policies, and cargo insurance policies.

Though this development around electronic bills of lading were overdue, and the advantages far outweigh the risks, still, not all details and impact areas are yet clear. The law must first address several issues around what exactly constitutes a “reliable system”, and banks or carriers have responsibility in ascertaining that a “reliable system” was used. We have partnered with over 150 banks globally, supporting their trade business. Through our products and service business lines, Infosys brings over four decades of experience in managing modern trade processes.