Extract ICC newsletter Q3-2023, DIS initiative

ICC DSI INITIATIVE

extract ICC NL newsletter Q3-2023

THE ICC DIGITAL STANDARDS INITIATIVE (DSI)

Lack of coherent standards for developers, executives and policymakers.

Platform rulebooks that hinder cross-platform title document exchange and utilisation.

Insufficient standards to simplify blockchain and non-blockchain based integration.

Legal uncertainty regarding the acceptance of digital trade documentation.

Unclear requirements for foundational trade standards.

A CONVERSATION WITH GERARD HARTSINK: A CLOSER LOOK AT THE ICC’S DSI

by Tom Scott

Can you explain the ICC’s DSI programme in one sentence?

The aim of the ICC’s Digital Standards Initiative is to develop a globally harmonized, digitized trade environment.

The common theme in Gerard Hartsink’s long career has been international trade and their payments. Whatever job he has been doing, he says that his work has always been “at the edge of international business processes, standards, and technology”. He has worked for the ICC for over ten years, the previous three of which as Chairman of the Digital Standards Initiative (DSI) Industry Advisory Board. In this interview, he highlights the significance of the DSI programme in streamlining the flow of global trade.

Let’s get into more detail. How will this be accomplished?

The DSI programme is focused on two aspects. Firstly, to make sure that the legal rules of administrative law around the world are harmonized. If this is not harmonized globally, then international trade slows down. The UNCITRAL Model Law on Electronic Transferable Records – MLETR – is the relevant piece of legislation. Looking at the MLETR Tracker , you can see which countries have adopted this. The UK, for example, is further down the road than the Netherlands. The second part of the DSI mainly involves the technical data standards of the 40 international (paper) trade documents.

These documents include data, but the format of these data is not the same of these documents to send them electronically to the business partners and government agencies such as customs, which is a problem. Moreover, it is in different languages. This is why we are nearly complete with the analysis of all 40 trade documents to get clarity about which data elements they contain. Then we identify the best standard for each data element: standardised data is very important for business-to-business, but also

business-to-government communications.

Standardised data is crucial in validating that the counterparty, for which the LEI (Legal Entity Identifier ) is the recommended option, is indeed the counterparty.

What sort of timeline do you expect?

It will take at least two years for the Dutch government to ensure that the MLETR is transposed to Dutch law. In addition, companies and their service providers will need to prepare themselves which will take one or two additional years. Therefore, Can you zoom in to the situation here in the awareness is very important; that people Netherlands? understand that this is going on at a global The Netherlands has many exporters and level under the umbrella of the ICC. I must importers dealing with goods and services. also state that it is not just the ICC that is Although the Digital Standards Initiative is sitting around the table; many other mainly for goods, it is not exclusive. A typical Dutch situation is that a lot of goods arriving organisations such as BIMCO, GS1, IPCSA, iSHARE, DCSA and IATA are working on this. at the Port of Rotterdam or Schiphol are Besides awareness, intelligent decisions destined for other countries. If one part of from both the private and public sectors the container is for the Dutch market and the other part is for the rest of Europe, then need to be made. Then we can start to it becomes very complex to understand have a dialogue about adoption. who all the parties in the supply chain are.

And, in the end, the data of the trade Is there a relationship between the Digital document related to the goods have to Standards Initiative and sustainability? pass through multiple organisations, and There is definitely a direct link between everyone has to be paid for their services. the Digital Standards Initiative and some From a practical perspective, the fact that all those documents do not have the same of the UN’s 17 sustainable development data is a problem for the exporter, importer goals (SDGs): Industry, Innovation and Infrastructure [SDG #9], and Responsible or their service provider(s) established in or outside the Netherlands.

Production and Consumption [SDG #12], for example.

What can be done to accelerate the The DSI’s standardised suite of data implementation of the DSI in the facilitates easier communication; it also Netherlands? means that the cost of production, of ICC Netherlands has decided to create the moving goods around the world will ICC NL DSI Forum. This is not only for ICC decrease. If the processes of global trade members, but also key market participants can be carried out in a more efficient way, in the Netherlands that are involved in this will lead to more efficient use of international trade. This Forum has three resources. What is your personal motivation tasks. First: to look at the DSI programme. in working for the ICC’s DSI program? My Second: to listen to the members of the NL history is in international business: I have the DSI Forum to hear their views based on their experience on how to use legal and local industry knowledge. And third: if, in the technical standards to structure technology end, we come to a global agreement, we to facilitate international business will ask participants from the public and processes. Therefore, I am very aware that private sectors to help facilitate the the Dutch economy will benefit over time if adoption process of the ICC we support the ICC’s Digital Standards recommendations.

Initiative. My motivation is working for the benefit of society. I have a focus on getting things done: this is what gives me a kick.

Exciting News On The Digital Standards Initiative: English Trade Goes Digital On 20 September 2023: English trade laws changed to incorporate the new Electronic Trade Documents Act. This law recognises commercial trade documents in digital form. “There are no longer any legal requirements to handle commercial trade documents on paper. That includes bills of lading, bills of exchange, promissory notes, warehouse receipts and marine insurance documents,” said ICC United Kingdom Secretary General Chris Southworth on his LinkedIn page. “It is arguably the most significant milestone to date in the journey to bring the whole international trading system into the 21st century. Every company trading under English law worldwide can now remove paper and all the associated pain and red tape that hinders economic growth, especially for SMEs who feel the pain the most.”

Want to learn more about the subjects raised in this interview? You can find more resources in the following documents: The Standards Toolkit for Cross-Border Paperless Trade ICC DSI Trusted Technologies Principles ICC Identity Management Guide (chapter 8 includes details about the Legal Entity Identifier, LEI) The ICC MLETR Tracker, where you can see which countries have adopted this legislation.