TradeTrust is a framework designed to facilitate the digitalization of documents used in international trade and logistics and their interoperability. Spearheaded by Singapore’s Infocomm Media Development Authority (IMDA), TradeTrust consists of a set of globally accepted standards and a set of software components that connect to a blockchain backbone IT infrastructure. The goal of TradeTrust is to create a global network of trusted partners for the exchange and verification of digital trade documentation across borders, enabling a more seamless flow of goods between trading nations and reducing the inefficiencies and complexities generated by the use of paper-based documentation.
Although much progress has been made by Customs and trade operators in terms of digitalizing processes, paper documents are still widely used between different border administrations, buyers, sellers, and other actors involved in the international supply chain. The dematerialization of transferable documents, such as electronic Bills of Lading (eBLs), has proven to be particularly difficult. If eBLs are still not widely used in the international trade ecosystem, it is largely because of the lack of consistency with regard to legal recognition in different jurisdictions, which makes it difficult to recreate electronically their function as documents of title, passing rights and obligations along a trade chain. Even when the parties use digital solutions to exchange BLs, they often have to convert the electronic documents back to hardcopies when they reach different jurisdictions.
To address these challenges, the IMDA created TradeTrust, which includes a set of governance and legal frameworks, document standards, and a set of software components that facilitate the interoperability of electronic trade documents and their exchange between different digital ecosystems. TradeTrust consists of four components: legal harmonization, development of international standards, accreditation structure, and open-source software.
Legal harmonization is necessary to enable a shift towards a paperless trade environment. Singapore is currently amending its Electronic Transactions Act (ETA) to provide legal certainty to electronic negotiable instruments like the eBL and recognize them as valid title documents. The ETA will adopt the Model Law on Electronic Transferable Records (MLETR) of the United Nations Commission on International Trade Law (UNCITRAL) – a legal framework that countries can harmonize their legislation to, that enables the recognition of electronic equivalents of paper-based transferable documents.
The development of international standards is also critical to facilitate the interoperability of digital documents exchanged across different solutions and ecosystems. TradeTrust standards for the creation of documents are aligned to international standards developed for digital trade documents, such as those developed by the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) and the International Organization for Standardization (ISO).
An accreditation structure is needed to provide a set of internationally accepted rules and policies to certify solutions to meet the requirements of the law. The ETA sets out provisions for IT implementations dealing with transferable records. Hence, an accreditation framework and structure will be explored to accredit technical solutions that deal with electronic negotiable documents such as eBLs to ensure that they meet the legal requirements.
Open-source software is an essential component of TradeTrust that can easily integrate backend solutions to the TradeTrust network. TradeTrust currently connects to a public and permissionless blockchain that can be consulted via a web interface. Software has been developed and is available under open-source licensing terms on GitHub. The industry will be able to integrate the software into their platforms or digital solutions to connect to the TradeTrust public blockchain network.
In Summary
TradeTrust can bring several benefits to the global trade, finance, and logistics community. Public and private bodies using the TradeTrust standards via solutions connecting them to a public and permissionless blockchain backend will be able to interoperate with the other network members and achieve increased efficiencies, reduced operation costs and time, and support for the emergence of new service offerings.
