Advancing Digital Trade 2025

Trade documentation1 Sandbox participants experimented with effective, regulation-compliant ways to use digital and electronic trade documents in place of paper. Global trade remains highly dependent on paper- based documentation, which undercuts efficiency, increases costs and limits access to capital, especially for SMEs. Documentation-related challenges include: –Processing inefficiency: According to the World Trade Organization, a cross-border transaction typically requires the exchange of 36 documents and 240 per single transaction.1 Processing paper documents alone can constitute up to one-fifth of overall shipping costs, and delays of five to 10 days per document occur regularly. The cross-border movement of documents is time-consuming and can delay transactions, especially when amendments are needed. –Societal costs: Delays in document processing can stall financing, which particularly disadvantages SMEs in developing economies. –Legal and operational barriers: Many jurisdictions lack clear legal frameworks recognizing electronic transferable records. Within the UAE, only the ADGM has adopted the UN framework on electronic documentation – the UNCITRAL MLETR. The unevenness of adoption creates legal fragmentation that requires many companies to maintain dual systems, both paper and digital, which further increases costs, rather than reducing them. While the potential benefits of digitalization are clear to many trade participants, challenges relating to coordination, interoperability and legal compliance have impeded the adoption of efficiency-enhancing technologies. In the field of documentation, for example, many digitalization solutions require parties to agree on a single platform or protocols, and this requirement creates coordination challenges that can impede technological adaptation. Credore participated in the sandbox initiative to demonstrate the feasibility, legal soundness and economic benefits of replacing paper- based trade documents with digital alternatives. Credore’s technology generated UN-compliant documentation, as stipulated by the UNCITRAL MLETR. Credore collaborated with the FSRA in the ADGM to explore regulatory partnerships in adopting UN-compliant documentation more widely throughout the UAE. The collaboration used the NayaOne digital sandbox platform to simulate cross-border trade transactions involving electronic bills of lading (eBL) and promissory notes. Credore created, issued and transferred these documents through a blockchain- based platform with full traceability and legal integrity. The testing used synthetic trade data that modelled UAE–India trade flows and tested how well the documents fare across diverse users – from banks to shipping lines – that relied on different technological infrastructures. As part of this programme, live transactions were executed, including export factoring backed by MLETR-compliant electronic bills of lading and pre-shipment financing using electronic promissory notes. Additionally, a proof of concept demonstrated multiple endorsements on instruments such as letters of credit and collections, important use cases relevant to the bank. The testing used real-time trade flows and incorporated inputs for a range of global partners (e.g. the Abu Dhabi Commercial Bank, TradeTrust and the XDC Trade Network). Its assessment evaluated how digital documentation systems fared in terms of security, cost savings and speed.1.1 Credore: United Nations-compliant trade documentation Advancing Digital Trade: Insights from the UAE TradeTech Regulatory Sandbox 9