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  • Peter Kam Fai Cheung SBS

The Digital Trade Era

A blockchain-like technology platform can function as a paperless system of error-free record keeping and transparent transaction processing. With less third-party intervention, stakeholders can track and deal with irreversible information through on-line secure networks. Such a modification-resistant digital platform provides all the needed information (egs production history, goods in transit, letters of credit, trader and transporter identities, passing of property titles etc) to facilitate traders, financiers, transporters and custom authorities to make timely informed decisions.

The main value proposition of blockchained-powered trade is tech-enabled trust in the digital trade chain. The huge, decentralized, cloud-based public ledger records every transaction and stores the information in a global network reduces, if not eliminates, the risk of fraud. Not only that the centralized or harmonized online documentation system facilitates the exercise of due diligence (ie every stakeholder is on the same page near real time) and simplifies trade finance processes (eg no need for exchange of documents), it lowers compliance costs and enhances efficiency.

As a legally trained personnel having some experience in settling international trade disputes, I take an active interest in designing common standards for inter-operable or uniform "industry-based smart contracts" and a uniform "dispute settlement policy" that should harmonize conflicts of laws and dispute settlement matters. If fault cannot be allocated to any disputants in the dynamic execution of such "smart contracts" (eg titles and payment automatically transferred when conditions are fulfilled), fundamental principles like "equity + special circumstances" and alternative dispute resolutions would have to be deployed. Meanwhile, project collaboration and technology adoption among stakeholders are keys to capitalize timely in the digital trade era!

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