Submission in response to the consultation on the Legislative Amendments for Facilitating Digitalisation of “Business-to-Business” Trade Documents in Hong Kong (27^th March 2026)

Question 1:

We agree with adopting a non‑exhaustive, function‑based and future‑proof criterion aligned with the UNCITRAL Model Law on Electronic Transferable Records (MLETR). This approach ensures that qualifying electronic transferable records (ETRs) can be recognised without the need for repeated statutory amendments as technology and market practices evolve. It provides flexibility, reduces legislative lag, and enhances Hong Kong’s competitiveness as a digital trade hub.

The new Part could expressly include: bills of lading (already central to shipping and logistics), warehouse receipts (important for commodities and inventory financing), promissory notes and bills of exchange (used in trade finance), delivery orders (for goods release in logistics chains), and certificates of origin and inspection certificates (where transferable and relied upon in trade).

Certain documents may be better conducted through physical means at this stage due to legal, operational, or market readiness concerns, such as negotiable instruments in highly regulated sectors (e.g., paper‑based bills of exchange used in conservative jurisdictions), documents requiring physical endorsement or notarisation (e.g., some shipping guarantees or letters of indemnity), and certificates with sensitive security features (e.g., paper‑based inspection certificates where tamper‑proof physical seals are critical).

Question 2:

Following the UK approach of relying on the MLETR reliability factors without introducing a supervisory or accreditation regime is sufficient as a legal basis to facilitate the use of digitalized B2B transferable trade documents in Hong Kong. This approach balances international alignment, flexibility, and cost efficiency. To mitigate risks of inconsistency and market uncertainty, Hong Kong could allow voluntary accreditation schemes for service providers who wish to demonstrate compliance, thereby enhancing market confidence without imposing rigid requirements. Besides, clear guidelines should be issued on how businesses can demonstrate compliance with MLETR reliability factors, reducing uncertainty in practice. Training should help ensure courts  equipped to interpret and apply MLETR factors consistently, strengthening enforceability.

Question 3:

Modelling on the UK approach by introducing an additional provision to recognize possession through demonstrable actions is practicable and beneficial. It strengthens legal certainty, aligns Hong Kong with international best practice, and supports dispute resolution. However, not all B2B transferable trade documents can perform this function, particularly those that are informational or non-transferable in nature. Clear statutory scope, guidance, and exclusions will be essential to mitigate uncertainty for market players. In particular, practical examples (e.g., electronic endorsement of bills of lading, transfer logs for warehouse receipts) should be provided to help businesses understand how possession can be demonstrated.

Question 4:

The reproduction requirement ensures that digitalized B2B transferable trade documents can be reliably reproduced in a manner equivalent to paper originals. This is critical for legal certainty, evidential reliability, and market confidence. However, there may be difficulties in enforcing the reproduction requirement for some B2B transferable trade documents, particularly in ensuring authenticity, uniqueness, and evidential reliability for negotiable instruments like bills of lading, bills of exchange, and promissory notes. These challenges can be mitigated by adopting MLETR-based reliability standards, statutory clarity, audit trails, and international alignment, ensuring that reproduction does not undermine the legal certainty of digitalized trade documents.