Trade documents to be digitalized under the Electronic Transactions (Amendment) Bill 2021, Lasting Powers of Attorney to follow

CNPupdate

 

Trade documents to be digitalized under the Electronic Transactions (Amendment) Bill 2021, Lasting Powers of Attorney to follow


The Supreme Court spaceship construction in Singapore.



Date Published: 1 February 2021 




 

A. Introduction to the proposed amendments

The Electronic Transactions (Amendment) Bill 2021 (the “Bill”) was recently introduced in Parliament on 4 January 2021. As part of the Singapore Government’s wider efforts to drive digitalization in Singapore, the Bill calls for certain amendments to the Electronic Transactions Act (the “ETA”), which, if passed, would permit trade documents to be digitalized.

 

B. Background on the Electronic Transactions Act

The ETA, which was first enacted in 1998 and re-enacted in 2010, contains provisions supporting the legal enforceability of electronic records and signatures, thus providing legal certainty for digital transactions and a framework for secure electronic signatures.

However, it excludes from its scope certain types of documents and transactions that are listed in Items 1 to 5 of the First Schedule to the ETA. Examples include the creation or execution of a will, negotiable instruments, documents of title, bills of exchange, bills of lading, the creation, performance or enforcement of an indenture, declaration of trust or a power of attorney, any contract for the sale or other disposition of immovable property, and conveyances of immovable property.

In June 2019, the Infocomm Media Development Authority (the “IMDA”) released a consultation paper on the review of the ETA, which proposed that most matters from the exclusion list under the First Schedule to the ETA be removed, including wills, trade documents, powers of attorney for the enforcement of security interests, and Lasting Powers of Attorney (“LPAs”), in order to support the electronisation of various types of instruments or transactions.

 

C. Removal of cross-border trade documents from exclusion under the ETA

The Bill thus represents the outcome of the IMDA’s consultation in respect of trade documents. The Bill seeks to amend the ETA to adopt the UNCITRAL Model Law on Electronic Transferable Records with modifications, and in conjunction with this, delete Item 2 of the First Schedule to the ETA.

Item 2 of the First Schedule to the ETA lists the following trade documents: negotiable instruments, documents of title, bills of exchange, promissory notes, consignment notes, bills of lading, warehouse receipts or any transferable document or instrument that entitles the bearer or beneficiary to claim the delivery of goods or the payment of a sum of money.

The digitalization of such trade documents marks a key progression in improving the efficiency of cross-border trade, as it is expected that the amount of paperwork involved in cross-border trade can be consequently reduced. For example, most of maritime trade presently involves the heavy use of physical bills of lading, which can run up to hundreds of pages, and rack up high processing time and costs. Electronic bills of lading, once adopted by a critical mass of jurisdictions, would reduce processing time and money and result in more productive and efficient cross-border trade.

 

D. Treatment of Lasting Powers of Attorney, other documents and transactions presently excluded from the scope of the ETA

As regards other documents and transactions listed under Items 1, 3, 4 and 5 of the First Schedule to the ETA and excluded from the scope of the ETA, the Bill does not seek to remove these items from the First Schedule to the ETA.

However, the Explanatory Statement at the end of the Bill clarifies that these other matters will be deleted from the First Schedule, once the legislative and administrative frameworks supporting the electronisation of these other items are ready to be enacted or implemented.

As an example, the Ministry of Social and Family Development (“MSF”) is looking into the development of an online system called the Office of the Public Guardian Online electronic system (“OPGO”). The MSF intends for LPAs to be made and registered electronically through the OPGO, which would allow Singapore to move away from having to execute LPAs as hardcopy deeds and having to register LPAs by manually processing the applications. In this regard, the MSF launched a consultation paper in October 2020 to propose amendments to the Mental Capacity Act (“MCA”) to allow for the digitalisation of the LPA as described above, and has stated in December 2020 that it will study the concerns and suggestions raised in response to the consultation paper as it finalizes the amendments to the MCA.

In view of these recent developments, we can look forward to the digitalization of the LPA, which could follow closely on the heels of the digitalization of trade documents.


Disclaimer: This update is provided to you for general information and should not be relied upon as legal advice.

 

CNPLaw’s Investment Funds Lawyers

Bill Jamieson is a Partner at CNPLaw LLP. Bill is an English lawyer who is also registered to practise Singapore law in the areas of corporate law, banking and finance and securities laws. He enjoys working in the diverse and dynamic Asian market and helping his clients to achieve their goals.
Partner

    Bill’s practice focuses on corporate financing transactions, investment funds, mergers and acquisitions, private equity and employment law matters. His experience includes 10 years in the City of London and over 20 years in Asia. Before joining CNP, Bill was a partner in a well-known international law firm. He is recommended lawyer for Corporate and M&A, Banking and Finance, Investment Funds and Labour and Employment in Legal 500 Asia Pacific 2021. Bill is one of the firm’s contacts for Interlaw, a network of independent full-service corporate law firms ranked by Chambers and Partners in its highest category, “Elite”, amongst all global law firm networks.



    Goh Wan Shuen is an Associate at CNPLaw, she is in in the Funds and Financial Services team. Her main areas of practice include investment funds and mergers and acquisitions

    Associate

      Wan Shuen is an associate in the Funds and Financial Services team. Her main areas of practice are investment funds and mergers and acquisitions. She regularly assists in the formation and operation of private funds in several jurisdictions, including drafting the full range of fund documentation, as well as the provision of related regulatory advice. She is also regularly involved in other transactional work involving mergers and acquisitions, banking and finance, and employment issues.


      The lawyers from the Banking & Finance Practice Group (BFPG) have always taken pride in providing a comprehensive range of banking and finance services to our clients, including domestic and foreign international banks, other financial institutions as well as non-bank lenders and borrowers, and foreign legal firms acting for parties outside Singapore.

      Our banking & finance practice covers the whole spectrum of domestic and international banking & financing work, including restructurings, financings and financial institutions advisory work. We can draw upon a broad base of partners, senior, mid-level and junior associates, all with strong and varied banking & finance product line and country experience.

      Our reach is further widened and enhanced by our ability to draw upon the resources of our network of correspondent firms in the region and globally.





      Every business involves an amalgam of various stakeholders, such as investors, shareholders and directors. Ideally, each of these stakeholders should have a common vision of what is best for the company. However, this is rarely the case when individual interests are factored into the equation.

      Stakeholder conflicts (regarding issues such as breaches of fiduciary dutiesderivative actionsshareholder oppressionmanagement deadlocksmanagement compensationdividend payments and buy-outs) can be a thorny issue and can leave a company crippled if not addressed promptly.

      Given the diversity of interests at play, we appreciate that a multi-faceted approach is usually the most cost-efficient method of resolving stakeholder conflicts. Therefore, we provide clients with ready access to an integrated team of lawyers (combining the experience of our corporate, dispute resolution and employment law practices where applicable) who will effectively engage the relevant stakeholders in discussions on how best to resolve their differences amicably.

      More often than not, clients are able to avoid costly protracted court proceedings and resolve stakeholder conflicts with discretion and expediency.





      Having a will enables one to go further than just providing for one’s family at present. It ensures that upon one’s demise, the selected people will get the amount dictated, and the appointed person will be put in charge of the assets to distribute them according to one’s wishes.

      Making a will need not be difficult nor time-consuming. Our fast track wills system eases the will-making process, making it focused on addressing the requirements of our clients in an efficient and cost-effective manner.

      Nonetheless, we are mindful that each will is unique and has to be tailored to the specific needs of the client. Clients are therefore invited to discuss their plans with us so that we can ensure their will covers the different classes of assets and beneficiaries in accordance with their wishes.

      We also regularly advise and assist clients with the setting up of trusts for various purposes, ranging from protection of assets from creditors to ring-fencing the assets from probate proceedings.