Sanctions clauses that are wisely or imprudently constructed continue to be inserted into trade finance instruments and may heavily impact the legal rights and transactional obligations of involved parties.
Various articles from the June 2024 edition of DCW caught the attention of ICC Banking Commission Senior Technical Advisor Dave Meynell who offers the following comments.
In a high profile case involving standby letters of credit issued in connection with aircraft leases to Russian airlines and
Alignment between UK Electronic Trade Documents Act 2023 and MLETR. Criteria for electronic trade document reliability, the Act's impact on eUCP, and systems for digitising trade.
The UK Electronic Trade Documents Act 2023 (ETDA) was passed on 20 July 2023 and came into effect on 20 September 2023. This Law provides recognition of an ‘electronic trade document’ as having the same effect as an equivalent paper ‘trade document’ (ETDA Section 3 (2)) and that “[a]nything done in relation to an electronic trade document has the same effect … in relation to the document as it would have in relation to an equivalent paper trade document” (ETDA Section 3 (3)).
Whilst the UK ETDA is different in form to the United Nations Commission on International Trade Law (UNCITRAL) Model Law for Electronic Transferable Records (MLETR), they are considered to be aligned and compatible.
The MLETR was published by UNCITRAL in 2017. The model laws of UNCITRAL are sets of model legislative provisions focused on trade that nation states can adopt by enacting into national law. The MLETR applies to ‘electronic transferable records’ that are the “functional equivalent” of transferable documents or instruments in paper form. Eight jurisdictions have adopted based on or influenced by the MLETR, including Bahrain (2018), Singapore (2021), Abu Dhabi Global Market (2021), and the United Kingdom (2023) by virtue of the ETDA.
An ‘electronic trade document’ in the UK ETDA corresponds to an ‘electronic transferable record’ in the MLETR.
United Nations Commission on International Trade Law (UNCITRAL) Working Group VI (Negotiable Cargo Documents) held its 44th Session at the
Exploring the steps and considerations for banks to effectively navigate the complexities of true sale unfunded risk participation, identifying product and regulatory nuances, and understanding practical applications through use case scenarios.
Fraud prevention is a crucial pursuit, but is an interim/hybrid solution requiring a beneficiary’s bank to vouch for the beneficiary the answer? Or does it introduce added risks?
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