Model law on warehouse receipt systems aims to facilitate international trade

To facilitate international trade in goods, producers and traders like to use warehouse receipts. This makes it possible to sell raw materials without having to transport them. However, not every country has laws that regulate the use of warehouse receipts. In order to provide these countries with guidance when developing and revising their own regulations, representatives from around 40 countries are working on a model law for electronic warehouse receipts in the United Nations Commission on International Trade Law (UNCITRAL), a sub-organisation of the United Nations (UN). Bremerhaven university professor Dr Tobias Eckardt is participating in the working group as Germany's representative. He is expected to fly to New York for the second working meeting at the beginning of February.

Experts from the participating countries worked intensively on a model law at a meeting in Vienna back in September. The resulting draft is currently being scrutinised by a commission. The fact that the Bremerhaven professor is part of the working group is thanks to his commitment to the utilisation of electronic traditional documents in German law. "I was involved in the development of a draft regulation for electronic warehouse receipts and other securities in Germany. I was then asked by the Ministry of Justice whether I could imagine working on an international model law," says Prof Eckardt, who teaches on the Transport/Logistics (TWL) and Logistics Engineering and Management (LEM) degree programmes at Bremerhaven University of Applied Sciences. A major challenge is to find common regulations that are compatible with the laws of other countries. As every legal system is different, the regulations for handling warehouse receipts also vary. "The working group wants to develop a model law that makes sense for all countries. This is merely a proposal of what a warehouse receipt law could look like. The states can adopt it in whole or in part, but are not obliged to do so," says Prof Eckardt.

Warehouse receipts are not a new invention. They have been facilitating trade in goods for more than 200 years and are codified in the German Commercial Code (HGB). The principle: instead of selling the raw materials directly, they are stored in warehouses. Producers receive a so-called warehouse receipt in return. Among other things, this documents the quantity and condition of the goods and embodies the claim of the owner of the goods against the warehouse keeper. If the raw materials are then sold, only the warehouse receipt is transferred. The buyers can then also resell the goods in this way. This makes it possible to trade across borders without having to move the raw materials themselves. Unnecessary transport costs and routes are eliminated. "This also makes it easier for small farmers and small companies in particular to find larger sales markets. Electronic warehouse receipts have additional advantages, including the fact that participants can access real-time inventory data, carry out immediate transactions and gain access to a larger market," says Prof Eckardt.

In addition to the different legislation, there is another difficulty: in some countries, trading in warehouse receipts is currently not regulated by law at all, while in others there is no provision for an electronic warehouse receipt system. "A number of countries have recently introduced legislative reforms to modernise their national legal frameworks and enable the use of new technologies. However, no intergovernmental organisation has yet adopted a model law for warehouse receipts that would support states in implementing reforms," explains Prof. Eckardt. Such an instrument should not only help to strengthen the national legal framework, but also promote international harmonisation and thus facilitate cross-border transactions.

Once the review of the draft law has been completed, the work of the expert group will continue. The model law will be further negotiated at the next meeting in New York at the beginning of February 2024. "The aim is to complete the work in the coming year and thus provide countries around the world with an instrument that can be used to supplement and update existing law," says Prof Eckardt. In addition to the legal text, detailed guidelines for implementation will also be drawn up. This is intended to point national legislators to important levers and fundamental principles.

Contact for queries

Prof. Dr Tobias Eckardt
Phone: +49 4714823212
Mail: teckardt@hs-bremerhaven.de