London, UK – Partner Geoffrey Wynne at Sullivan & Worcester (Sullivan) has assisted the International Trade & Forfaiting Association (ITFA) in relation to an important update to its Digital Negotiable Instruments (DNI) Handbook.

The Addendum deals with some of the consequences arising from the coming into effect in September of the UK’s Electronic Trade Documents Act (ETDA) 2023. This law is a major step forward in enabling the creation of electronic trade documentation, including bills of lading, bills of exchange and promissory notes, governed by English law.

The update gives practical help on how to adapt traditional forms of bills of exchange and promissory notes to take into account the requirements of the Act. These include:

• Inserting an English governing law clause (and a jurisdiction clause, if required).
• A conversion from paper clause (where this is needed).
• An undertaking to make payment to the holder of the note.
• An agreement between the parties that the system used to create/register the digital asset is a ‘reliable system’ for the purposes of the ETDA.

ITFA states that the last provision is expected only to be needed for a short time, however it is intended to provide some certainty on what is currently an untested point.

Geoffrey Wynne, head of Sullivan's Trade & Export Finance Group and the firm's London office, advising ITFA, commented: “This Addendum is very timely for those looking to adapt traditional bills of exchange and promissory notes in light of the ETDA and to reflect the need for a ‘reliable system’ to ensure that digital trade assets in electronic form qualify under the Act. We are delighted to continue to assist ITFA on this important piece of the digitalisation puzzle.”

ITFA has also updated its dDOCS standards for systems/vendors’ digital negotiable instruments who will now be required to show, amongst other things, an ability to prove reliability of the relevant system in a legally satisfactory manner to present and transfer the instruments.