ICC’s C4DTI Ambitious Plan to Accelerate the Digitalisation of Trade

Any government that has trade and economic growth at the heart of its agenda wants international trade to be cheaper, faster, simpler, more secure, and sustainable. This is why the International Chamber of Commerce, which is the world’s most representative business organisation with 45 million members in more than 100 countries, has been campaigning for the digitalisation of trade.

ICC has found that by replacing paper documents – such as bills of lading – with electronic equivalents, there would be USD 9 trillion of trade growth in the G7 alone over five years. Associated costs would fall by 80% and the time spent on trade transactions would reduce from 25 days to just one. This represents an enormous economic prize if delivered. Furthermore, the primary beneficiaries would be small companies who feel the brunt of pain from unnecessary bureaucracy.

Trade digitalisation is rapidly growing in momentum. ICC is expecting its member countries to commit to removing legal barriers to digitalising commercial trade documents in the next 12 months. The United Kingdom is not alone in reforming laws. The US, Germany, France, China, and Japan are all actively planning to legislate in the next 12-18 months.

The UK has a significant opportunity to lead the world in digital trade and preparing for the Electronic Trade Documents Bill, which is due for its first reading in parliament shortly.2 When enacted in early 2023, the bill will place electronic documents on the same legal footing as their paper counterparts, setting the UK on its way to as much as GBP 225bn (USD 272bn) in efficiency savings. The UK government has agreements with those of Australia, New Zealand, and Singapore all of which have secured commitments to remove paper documentation and align their respective legal systems to the global framework for handling digital commercial trade documents, the UNCITRAL Model Law on Electronic Transferable Records (MLETR).

In April 2022, the ICC established the Centre for Digital Trade and Innovation (C4DTI) with support from the UK government to accelerate digitalisation across the UK trading system. C4DTI provides an impartial forum for government and industry to work together and align initiatives for consistent application of international laws, standards, and rules across trade. This is vital to making cross border trade frictionless.

C4DTI, based in the Tees Valley in the north of England, will work closely with innovation clusters across the UK and overseas. Tees Valley Mayor Ben Houchen said: “[W]ith the Teesside Freeport we are throwing open our doors to international trade like never before – taking advantage of all the opportunities of a truly global Britain.”

The Centre will provide a range of services including cross border pilots to test standards adoption and technology solutions, training to help companies use technology to remove inefficiencies, national campaigns to raise awareness of opportunities, and research to identify barriers. Pilots with Singapore to test electronic bills of lading are planned for fourth quarter 2022. After the bill comes into force there will be more pilots with a range of countries, including the US and Brazil.

On 3 July 2022, ICC UK published a short paper to explain how the ICC Uniform Rules for Digital Trade Transactions (URDTT) align with the Electronic Trade Documents Bill. These rules will underpin legislation, providing a secure digital trade framework for years to come. They also align to the WTO/ICC Standards Toolkit introduced in mid-March 2022 which provides a global foundation for cross border paperless trade.

Written by ICC Digital Rules Advisor David Meynell, the paper shows how URDTT is compatible with the bill. For example, the UK Law Commission calls for electronic documents to be treated as legally equivalent to their paper counterparts. URDTT provides that a digital trade transaction means electronic records are used as evidence of the underlying sale and purchase of goods or services, thereby having the same authority as a paper document.

The Law Commission also wants to make sure the new law works internationally, which is why definitions in the URDTT are modelled on MLETR. Even some of the more technical recommendations fit neatly with URDTT. For instance, the Law Commission has called for bearer bonds to be excluded from the scope of legislation. URDTT relates to the underlying sale of goods and services, not a type of negotiable debt, and so automatically excludes these types of financial instruments.

URDTT also addresses security concerns. We have outlined minimum standards for data processing systems which will make sure that electronic documents have secure hardware and software, as well as measures to prevent unauthorised access.

The paper is technical in nature, but this is a reflection of the depth of expertise and work happening in the UK. C4DTI is designed to have these capabilities so it can properly support both industry and government.

Digitalising trade is not about just flicking a switch and going digital. It is about modernising systems, adopting new technologies and ensuring legal, rules and standards frameworks provide an enabling environment. This is what will help us deliver the economic opportunities we know exist.

Ultimately, digitalisation is about making trade cheaper, faster, simpler, more secure and sustainable. Going digital will also enable us to generate the real time data we need to make trade more sustainable. We cannot achieve enhancements to trade if we keep using paper.