Jump to Content Jump to Main Navigation

Part II Trade Finance Technology, 10 Digitalisation of Shipping and Insurance Documents: Implications for Trade Finance

Miriam Goldby

From: Trade Finance: Technology, Innovation and Documentary Credits

Edited By: Christopher Hare, Dora Neo

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2022. All Rights Reserved.date: 08 August 2022

The inefficiencies inherent in processing pieces of paper manually down a cross-border chain of sales have prompted the international trade community to attempt to replace bills of lading with digital alternatives. These efforts have been ongoing for thirty years, but the recent availability of new technologies, particularly distributed-ledger technology (‘DLT’), which can be used in combination with ‘smart contracts’, the internet of things (‘IoT’) and machine-learning, has given these efforts a new impetus. Digitalisation holds many promises, including the creation of a context wherein new and cheaper financing options may be developed that do not involve manual checking of large volumes of paper documents. However, doing away with the paper-based documents of title creates uncertainties in terms of the bank’s position as secured creditor. Similarly, while cargo insurance certificates have been issued over electronic platforms for many years now, their transfer by endorsement is still effected by printing the certificate out and endorsing the paper-based certificate. In order for the benefits of digitalisation to be reaped in full, cargo insurance certificates also need to be fully digitalised, which would in turn raise questions as to the bank’s position as assured under the insurance contract. This chapter will examine the options available for making the bank’s position more certain. These options include legislative intervention and the development of contractual frameworks governed by English law.

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.