The U.K.’s Electronic Trade Documents Act of 2023 came into effect on Sep. 20–and it will send shock waves through the international trade system. At first glance, the bill looks perfunctory: It makes it legal to conduct trade using digital documents in place of physical paper. However, it’s significant, making the U.K. the first major economy to tackle a hurdle that has long made international trade a needless slog ahead of the U.S. where, in the absence of federal legislation, the choice to make trade paperless is currently left up to individual states.
Governments and businesses have long used electronic documents–but international trade has been a holdout. Trade laws require one to serve as a “holder” or have possession of essential forms like invoices, bank drafts, and bills of lading. Many of those laws date back centuries, and they haven’t recognized the holding or possessing of digital documents. With no other choice, international trade has run on paper–heaps and heaps of it. When exporting a frying pan takes a four-page customs form, it’s no shock the International Chamber of Commerce estimates that 4 billion documents move through the global trade system on any given day.
