On 19 March 2021, the Electronic Transactions (Amendment) Act ("ETAA") came into operation in Singapore, making Singapore the second country to adopt the United Nations Model Law on Electronic Transferable Record (MLETR). The changes that the ETAA effects essentially enable the digitalisation of transferable documents which are often used in cross-border trade. Importantly, the ETAA may feature in Singapore's effort to combat fraud in relation to transferable documents.
Transferable documents refer to documents which entitle the holder to claim performance of the obligations indicated therein, such as bills of lading. Despite advancements in digital technology, a majority of these transferable documents today are still physical — paper-based — documents. This observation is worrying especially since developments in reprography are causing these valuable physical documents to be increasingly susceptible to fraud.
A potential solution to the spate of transferable documents fraud is the adoption of electronic transferable documents. These electronic documents are more difficult to forge because they utilise technologies which have authentication and traceability features at its core. Furthermore, the occurrence of fraud is made even more unlikely with the added involvement of trusted providers of electronic transferable documents who are charged with ensuring the security of these documents.
Legislative support is an essential ingredient to the viability of electronic documents because while electronic transferable documents can serve as a receipt of goods and as evidence of a contract, it might not be recognised as a "document of title" like a physical transferable document is recognised. Legislative intervention is thus needed to assure industry players that electronic transferable documents will be conferred the same status as physical transferable documents in the eyes of the law. Singapore has, through the passing of the ETAA, provided the necessary legislative support for electronic transferable documents to be used. Section 6 of Singapore's ETAA inserts sections 16A to 16S into the Electronic Transactions Act, which collectively ensure that an electronic transferable document is functionally and legally equivalent to a physical transferable document and is capable of being recognised as a "document of title".
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