A legal perspective on a blockchain-based e-bill within international trade law
Abstract
The bill of lading (BoL) is one of the most imperative and widely used documents in the shipping industry. This traditionally paper-based BoL has been assisting international trade for centuries and is still a prominent feature of today’s global trade. However, our current world is known as the global age of no distance, where information can virtually be acquired from the palm of one’s hand. Transportation has adapted and naturally the laws regulating international trade, transportation and carriage have evolved. International trade is growing and increasingly leaning towards electronic commerce (e-commerce) and paperless transactions, doing away with paper-based documents such as the BoL, while also minimizing human interaction and physical use of documents. One of the first technological innovations of electronic data interchange (hereafter referred to as EDI), which was applied to the BoL, originated in the early seventies by use of computer-to-computer data interchange concomitant with specified agreed message standards. EDI was and is used to electronically transmit structured information and documents traditionally captured on paper, such as the BoL, upgrading the paper-based BoL to an electronic bill of lading, known in abbreviated form as an e-bill. Blockchain technology, the buzzword that became popular since the cryptocurrency-Bitcoin-boom in 2009, was in fact devised in 1990 with the original objective of preventing tampering with online documentation. Although cryptocurrencies are the most common examples of blockchain usage, blockchain’s use of unique "distributed ledger technology" (DLT) is proving to serve a multitude of additional functions such as data storage, financial transactions, real estate and asset management. However, the World Trade Organisation has been slow to match technological advances and electronic commerce among cross-border countries. This delay is mainly attributable to the complex nature of digital trade coupled with the dissimilarities among various countries’ internet regulations and e-commerce systems. Nonetheless, in pursuit of advancing international trade, the potential of blockchain technology demands an investigation into existing and future supporting legal infrastructure to determine whether it can be accommodated and possibly embrace and utilise this technological innovation. This study will delve into the history and evolution of the BoL as well as the examination of the role, characteristics and functioning of the original BoL within international trade law. The e-bill’s development and platforms that are utilised for the functioning of e-bills will be analysed, considering at the outset that e-bills function in a closed system with a central registry. The study will subsequently determine legal and regulatory instruments that are in place for the BoL as well as the e-bill. An explanation of blockchain technology concomitant with its ability to record all transactions will be provided. Other unique blockchain features warranting discussion are its transparency, resistance to tampering and the recording of a complete history of each transaction, which is publicly available to relevant parties on a blockchain ledger. However, unless legal systems provide adequate support around these developments, a blockchain-based BoL will not function optimally. This study will therefore and in conclusion examine the foremost international instruments to this end, namely the United Nation’s convention on contracts for the international carriage of goods, known as the Rotterdam Rules, as well as the United Nations Commission for international trade law’s model law on electronic transferrable records (UNCITRAL MLETR). A blockchain-based BoL will be compared against these works to consider their functional equivalence and determine whether it can be equated with the paper BoL.
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- Law [826]