The International Chamber of Commerce has called on Governments and central banks the world over to nullify any rules inhibiting the use of paperless trading, in order to mitigate the disruptive impact of Covid-19 on trade finance transactions.
The trade body has filled a memo to regulatory authorities calling for urgent action to remove any reliance on paper-based trade documentation and adopt the Uncitral Model Law on Electronic Transferable Records.
The ICC says international legal standards can be readily adopted in national laws to provide legal clarity for banks to accept e-documents, to expedite the financing of trade transactions and the release of goods.
“With many banks unable to handle trade finance paper documents in person due to Covid-19, there is a growing risk that the underlying trade in goods could be disrupted,” says Olivier Paul, director, finance for development at the ICC. “ICC and its members are taking unprecedented steps to limit potential disruption to the processing of trade finance transactions - yet, with the use of electronic trade documents in many jurisdictions either prohibited, or their legal status unclear, urgent government intervention is also required.”
A guidance paper accompanying the memo outlines the steps that need to be taken regarding the modification and adaptation of ICC rules within certain circumstances. These incloude the Uniform Customs and Practice for Documentary Credits (UCP 600) and its eRules (eUCP 600 2.0), the Uniform Rules for Demand Guarantees (URDG 758), the Uniform Rules for Collections (URC 522) and its eRules (eURC 522), the Uniform Rules for Bank-to-Bank Reimbursements under Documentary Credits (URR 725) and the Uniform Rules for Bank Payment Obligations (URBPO 750).