Policy & Compliance
function as a credit enhancement tool in the context of trade finance”. It added: “Being able to switch to alternative modes of transportation in case of disruption of shipping routes without diminishing the value of collateral in the context of trade finance or losing the ability to sell goods in transit is another reason for shippers to use negotiable cargo documents.” One major difference between sea and air is that, in the latter, negotiable cargo documents will only exist in a digital form, known as negotiable electronic cargo records. The air mode has previously rejected the need for the implementation of a negotiable bill of lading in whatever format. The reason for this change is unclear but, where the use of negotiable electronic documents is permitted, it will potentially increase the shipper’s ability to control cargo release without the need to raise letters of credit. As the UN is not mandating the adoption of the electronic negotiable document in air, take-up is probably going to be relatively slow. There are also practical considerations such as the processes and technology available to permit the use of negotiable airwaybills. The other points to be considered are whether the change will be applicable to both master and house documents? And what, if any, legislation will need to be introduced in the UK to facilitate their use. Increased legal liabilities Where such documents are used, forwarders and carriers will have to consider their increased legal liabilities should they inadvertently release a shipment when the shipper had not released the electronic negotiable document. UNCITRAL stated: “The draft instrument will thus provide a legal framework for the issuance and use of a single electronic record that could cover door-to-door transportation, thereby simplifying the documentation process and increase efficiency in operations.” Given that maritime is increasingly moving toward issuing non-negotiable documents, which are not documents of title, it will be interesting to see the level of interest in this new process.
T he fi rst draft of a document would allow the transfer of ownership of goods while in transit, is expected to be presented to the United Nations General Assembly, in all probability, in late 2025. As a negotiable airwaybill, this document could be used by shippers to enforce credit control and inhibit freight release by the holder of the bill. The new document is being developed by the United Nations Commission on International Trade Law (UNCITRAL) working group VI The new document could be used by shippers to enforce credit control and inhibit freight release by the holder of the bill “ Negotiable cargo documents could increase trade fl exibility and function permitting the use of negotiable air cargo documents, which airwaybill and many believe that this is a serious omission that will significantly limit its adoption. Instead, the draft convention provides a legal framework for transport operators to issue negotiable cargo documents/ electronic records at the request of shippers/consignors. Unlike ocean bills of lading, transport documents issued in other modes, such as road and air, are not used as documents of title and cannot be transferred to another party during transport. UN set to consider launch of negotiable airwaybill
Increased trade fl exibility The negotiable cargo document under development at UNCITRAL is intended to serve as a document of title to fill this gap in multimodal and unimodal transportation not involving a maritime leg. UNCITRAL explained that “negotiable cargo documents could increase trade flexibility and
consisting of delegates from UN member states as well as invited IGOs and NGOs. Inter-governmental negotiations on the draft international convention were held in Vienna in December 2024. It is being asked how fast different states can adopt the new documents? Currently the convention does not impose any obligation on states to introduce the negotiable
as a credit enhance - ment tool in the context
of trade fi nance – UNCITRAL
18 | February 2025
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