The importance of digital trade transactions is increasing day by day, in particular during the covid-19 pandemic and such transactions are becoming gradually widespread in today’s world. After realization the deficiency of rules and uncertainties concerning digital transactions, The International Chamber of Commerce, which has created the most widely used rules concerning banking and finance since the 1930s, initiated work on the Uniform Rules for Digital Trade Transactions (“URDTT”).After preparing six draft texts, the 1.0 version of URDTT has been published in the previous days by the International Chamber of Commerce (“MTO”).In this letter, we will share some basic information regarding the content and areas of usage of such rules.
WHAT IS THE DIGITAL TRADE TRANSACTION?
According to the definition in the URDTT text, a digital trade transaction is a process, as agreed between the buyer and the seller, whereby electronic records are used to evidence the underlying sale and purchase of goods or services, and the incurring of a payment obligation.
WHAT IS THE PURPOSE OF UNIFORM RULES FOR DIGITAL TRADE TRANSACTIONS?
The URDTT is designed to be compatible with United Nations Commission on International Trade Law’s Model Laws concerning international arbitration.
URDTT, which is intended to be used in digital environments, was prepared to provide a framework that applies to parties that participate in a digital trade transaction. The URDTT shall be binding if the terms and conditions of a digital trade transaction specify that it is subject to these rules.
URDTT rules are briefly intended at the following circumstances;
- For a fully digital environment,
- To be neutral with regard to technology and messaging standards,
- To extend into the corporate space, including trade transactions and the
growing community of non-bank providers of financial services.
According to these rules, electronic records will be the basis of trade transactions instead of any habitual printed and signed document or contract.
WHAT ARE THE REGULATIONS IN THE UNIFORM RULES FOR DIGITAL TRADE TRANSACTIONS?
First of all, URDTT determines the roles of a buyer and a seller. In pursuant to these rules, the role of a seller includes the delivery of goods or the supply of services and providing any information required for that purpose. The role of a buyer includes taking delivery of goods or receiving services and effecting payment in accordance with the payment obligation.
Besides, URDTT set out regulations regarding electronic records too. The followings are some of these regulations;
- A digital trade transaction must specify the terms and conditions by which compliance
of an electronic record will be determined,
- All data relating to a digital trade transaction must be submitted in form of an electronic record.
- Unless applicable law requires otherwise, a requirement that information should be in
writing is satisfied when an electronic record is accessible to an addressee and is not affected by any data corruption.
Lastly, URDTT includes detailed regulations regarding the following;
- The procedure to be followed if an electronic record does not comply with the terms and conditions of a digital trade transaction or the requirement of submitting all data relating to a digital trade transaction in form of an electronic record and if an electronic record is affected by data corruption,
- Payment obligation in digital trade transactions,
- Payment undertaking of a financial service provider,
- Force Majeure,
- Applicable Law.
Most trade transaction can be made in a digital environment by technological progress.As a result of the increase in the number of digital trade transactions, there is a rising need regarding particular rules that may be applied to such transactions. It is aimed to satisfy this need by the ICC Uniform Rules For Digital Trade Transactions, which is the first regulation concerning fully digitalized transactions. We hope that the application will be concluded in a positive outcome concerning all transaction parties.