SUCCESSFUL digital transformation is the outcome of three elements: sound policy objectives, robust technical infrastructure, and an enabling legal environment.

The United Nations Commission on International Trade Law (UNCITRAL) is the core body in the UN system for the harmonisation and modernisation of international commercial law. As part of its mandate, UNCITRAL plays a central and coordinating role within the UN system in addressing legal issues related to the digital economy and has conducted pioneer work in the field of electronic transactions since the 1980s.

This work has led to the adoption of legislative texts that are widely considered as global benchmarks such as the UNCITRAL Model Law on Electronic Commerce, enacted in about 100 states. The desire to counter the economic effects of the Covid-19 pandemic through digital trade has recently further broadened the support of states and business for these UNCITRAL texts.

The passage of the Electronic Transactions (Amendment) Bill in the Parliament of Singapore to enact the UNCITRAL Model Law on Electronic Transferable Records marks a milestone in the development of the law of digital economy. Singapore has been playing for decades an active role in the preparation, adoption and implementation of UNCITRAL texts. In the digital field, Singapore was one of the first countries in adopting the Model Law on Electronic Commerce and the United Nations Convention on the Use of Electronic Communications in International Contracts, and is an early enactor of the Model Law on Electronic Transferable Records.

From a legal perspective, the Model Law on Electronic Transferable Records gives legal recognition to the use in electronic form of documents that underpin trade logistics and financing such as bills of lading, bills of exchange and promissory notes, but that hitherto could not be used in that form because they incorporate the right to claim money or goods in a piece of paper, which is a tangible document. The Model Law aims precisely at overcoming that obstacle by establishing the requirements for functional equivalence between paper-based transferable documents and electronic transferable records.

From a business perspective, the Model Law is an enabler of modern business practices based on technologies that seamlessly exchange, analyse and reuse data. For instance, it gives legal recognition to the inclusion of dynamic information originating from oracles and other connected devices in centuries-old commercial documents, and may be implemented through blockchain-based platforms.

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For Singapore, that Model Law is a core component of the TradeTrust environment that aims to establish a digital space for all trade-related data and documents. This allows migrating the myriad of discrete paper-based documents used according to the traditional approach to trade documentation into a single electronic record that contains all information related to a particular commercial transaction. The goal of this novel approach is to share more accurate information at a faster pace and less cost so as to reduce transaction costs, increase compliance and prevent abuses.

Singapore's move is in line with most recent global and regional trends that recognise the interaction between UNCITRAL texts and trade agreements. Thus, UNCITRAL texts are referenced both in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and in the Regional Comprehensive Economic Partnership, which directly concern Singapore, and underpin the Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific, the first regional treaty dedicated to paperless trade facilitation.

Singapore and other selected countries have also negotiated Digital Economy Agreements that provide a blueprint for implementing regional trade agreements and that explicitly refer to the desirability of considering the adoption of the Model Law on Electronic Transferable Records as part of the domestic framework for electronic transactions.

It is anticipated that the benefits of the adoption of the Model Law on Electronic Transferable Records by Singapore should provide valuable evidence of the desirability of adopting that Model Law in other jurisdictions. The desire to overcome the challenges arising from the Covid-19 pandemic and accelerate economic recovery, for instance by easing access to credit of small and medium-size enterprises, should prioritise the adoption of the Model Law on the agenda of policymakers and legislators worldwide.

• The writer, a legal officer in the UNCITRAL Secretariat, is secretary of Working Group IV (Electronic Commerce) of UNCITRAL. The views expressed here are the writer's and do not necessarily reflect the views of the United Nations.