Cross-Border Paperless Trade

What is cross-border paperless trade?

Paperless trade refers to the digitalization of information flows required to support goods and services crossing borders. By moving away from paper and opting for digital systems, governments and other stakeholders can speed up and facilitate trade (see guide on Trade Facilitation). Paperless trade can also yield significant environmental benefits by cutting out printing, dispatching, processing, exchanging, and the eventual discarding of vast quantities of paper documents. Paperless trade systems can be B2B, B2G or G2G and have various focuses (e.g. electronic customs declarations, electronic port management systems, electronic single windows).

Why is cross-border paperless trade important for MSMEs?

Paperless trade could significantly reduce trade costs and add up to major savings for traders, especially MSMEs. According to a study conducted by the International Chamber of Commerce (ICC) and Coriolis Technology, digitizing transferable documents could boost MSME trade by 25% and lead to a 35% improvement in business efficiency. Paperless trade can reduce complexity by eliminating the need for copies of the same document, as well as making electronic and immediate transmission of those same documents possible. All of this can reduce the time and effort required, thereby assisting all traders, especially MSMEs, with managing trade-related procedures, such as trade finance requests and logistics operations.

What legal and technical aspects need to be considered when putting in place cross-border paperless trade systems?

Legal issues that policy makers should consider when putting in place cross-border paperless trade systems include:

• Legal recognition of electronic transactions and documents: adopting a legal framework that recognizes electronic transactions and documents as equivalent to those based on paper is. The UNCITRAL Model Law on Electronic Transferable Records (MLETR) provides useful international guidance in this respect.
• Trust services: for paperless trade systems to be interoperable, they need to rely on mechanisms guaranteeing an international alignment on what constitutes a valid trust service across borders. See the UNCITRAL Model Law on Electronic Signatures (MLES) for guidance on this issue.
• Data governance: When documents and information are exchanged between users using electronic systems or between electronic systems, the system must ensure confidentiality (i.e. information is private to only designated parties of the communications) and data integrity (i.e. the accuracy and consistency of data are maintained and assured over their entire life cycle).
• Liability and dispute management: trading parties and other concerned entities may suffer losses from the incorrect transmission or improper reuse of information and may seek compensation for those losses. Guaranteeing access to civil remedies for such losses and dispute settlement opportunities can help to enhance trust in paperless trade systems, and thereby support their adoption.

In addition to the legal framework, technical issues to consider when putting in place cross-border paperless trade systems include digital identity, electronic payments, data models and semantics, communication protocols, connectivity and data security. A list of standards for cross-border paperless trade that can be called upon when putting in place such systems can be found in the joint ICC-WTO Standards Toolkit for Cross-border Paperless Trade.

Detailed guidance on these various legal and technical issues is provided in the Cross-border Paperless Trade Toolkit developed by the WTO in collaboration with the United Nations Economic Commission for East Asia and the Pacific (UNESCAP) and UNCITRAL, as well as in the legal and technical readiness assessment guides and checklists developed by UNESCAP.

Where can policymakers access resources on policy frameworks, guidelines and tools?

• ICC’s Digital Standards Initiative (DSI): The International Chamber of Commerce’s (ICC) has developed a digital standards initiative. The DSI website includes a page for policymakerswith links to information related to adoption, economic analyses on the benefits of digitalization, and legislation related to the adoption of the MLETR.
• ITC-UNESCAP-UNNExT’s Making the WTO Trade Facilitation Agreement Work for SMEs: The International Trade Centre (ITC), the United Nations Economic Commission for East Asia and the Pacific (UNESCAP) and the United Nations Network of Experts for Paperless Trade and Transport in Asia and the Pacific (UNNExT) provide guidance for policymakers to mainstream paperless measures and other trade facilitation components in strategies aimed at developing small- and medium-sized enterprises (SMEs). Visit this ITC-UNESCAP-UNNExT repor
• WTO-UNESCAP-UNCITRAL Cross-Border Paperless Trade Toolkit: The World Trade Organization (WTO), in collaboration with UNESCAP and UNCITRAL, developed a toolkit with technical and legal tools that can be called upon to adopt cross-border paperless trade systems.
• UN/CEFACT’s While Paper on Paperless Trade: The United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) has a policy document with frameworks, case studies and resources that can guide policymakers to align trade rules with trends in paperless trade. Visit this UN/CEFACT report.
• UNECE-UN/CEFACT’s Guides on Paperless Trade: The United Nations Economic Commission for Europe (UNECE) and the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) have a number of papers and guides on paperless trade, including a 2018 white paper on paperless trade, a roadmap towards paperless trade, and trade facilitation and paperless trade implementation.
• UNESCAP’s Legal Readiness Assessment Guide: UNESCAP has developed legal readiness assessment guides that countries can use to identify legal issue areas that are relevant to cross-border paperless trade. Visit this UNESCAP website.
• UNESCAP’s Technical Readiness Assessment Guide: UNESCAP offers technical readiness assessment guides that countries can use to address technical issues on implementing electronic trade systems, paperless environment and actions needed for facilitating cross-border paperless trade data exchange. Visit this UNESCAP website.
• WCO’s Guide on Dematerialization & Paperless Processing: The World Customs Organization (WTO) has developed guidelines for customs authorities to support the use of electronic means for managing trade-related documents and reduce the hard copy requirements for such documents. Visit this WCO guide.

Where can policymakers access good practices and national examples?

• Single Window for Foreign Trade in Colombia: A Case Study on Trade Transactions: The International Trade Centre (ITC) has documented Colombia’s experience in establishing a national single window for foreign trade which has enable business to conduct paperless transaction with the support of information and communication technologies. Visit this ITC website.
• UNECE’s Regional Report on Trade Facilitation and Paperless Trade Implementation: The United Nations Commission for Europe (UNECE) provides an example of regional policy reviews on best practices and opportunities for cooperation in adopting paperless trade measures and other trade facilitation interventions. Visit this UNECE report.
• UNESCAP’s Readiness Assessments for Cross-Border Paperless Trade: The United Nations Economic Commission for East Asia and the Pacific offers policy toolkits for assessing legal and technical readiness for cross-border paperless trade. Visit this UNESCAP website.