SINGAPORE - Measures to reduce paperwork involved in cross-border trade by allowing digital documentation were approved on Monday (Feb 1), under changes to the law involving electronic transactions.
These changes will also pave the way for important documents like a Lasting Power of Attorney (LPA) to be digitalised, as part of Singapore's wider push to become a Smart Nation, said Minister for Communications and Information S. Iswaran.
Parliament passed the Electronic Transactions (Amendment) Bill on Monday, following an hour-long debate that saw eight MPs taking part.
Under the changes, Singapore will allow cross-border trade documents with international ports to be digitalised, thereby reducing the time and money required to process a huge amount of paperwork.
Currently, most maritime trade involves the use of physical bills of lading, which are legal and commercial documents providing evidence for the contract of carriage, receipt and ownership of goods for a cargo shipment.
Given the intricacies of maritime trade law, the paper trail typically runs up to hundreds of pages for a single transaction. These take a large amount of time and money to process.
Research by container shipping giant Maersk and tech firm IBM in 2014 showed the cost of processing trade documents made up as much as 20 per cent of the cost of moving goods.
Digitalising trade documents would significantly enhance efficiency and productivity, said Mr Iswaran, who is also Minister-in-charge of Trade Relations.
He pointed out in his speech on Monday that US$4 billion (S$5.3 billion) would be saved annually if just half of today's container shipping lines adopted electronic bills of lading, citing the Digital Container Shipping Association.
"Ultimately, end consumers stand to benefit from the lower costs of legal documentation, transportation and trade financing," he said.
The Bill will also align Singapore with standards from the United Nations Commission on International Trade Law, which spells out an internationally harmonised legal framework for electronic records.
The changes to the law mean that Singapore is one of the first countries in the world to adopt universally recognised electronic transferable records, said Mr Iswaran.
Mr Louis Ng (Nee Soon GRC) had asked about how Singapore will continue to be interoperable with other countries, especially given how many have yet to adopt electronic records. Mr Iswaran said in response that the new law has provisions to allow electronic records to be changed to physical ones, and vice versa.
The minister also stressed that the changes to the law do not mandate the use of electronic records, addressing the concerns of Nominated MP Janet Ang and other parliamentarians. He added that the use of such records has long-term benefits and competitive advantages for businesses.
The changes to the law will also provide more legal certainty for digital transactions and put in place a framework for better securing electronic signatures, as part of the Government's wider digitalisation efforts.
This includes digitalising the LPA, which allows an appointed person to make medical and financial decisions on behalf of someone should he lose his mental capacity.
Currently, only hard copies of LPAs are accepted. Mr Iswaran said on Monday that the changes to the electronic transactions law will allow the Government to introduce ways to digitalise this document.
The Ministry of Social and Family Development (MSF) conducted a public consultation late last year.
It said last October that digitalising this document could cut the time needed to register an LPA from an average of three weeks to eight working days. This excludes a three-week mandatory waiting period during which a person can withdraw his application and the person appointed to act on his behalf can also raise objections.
MPs like Mr Don Wee (Chua Chu Kang GRC) and Mr Yip Hon Weng (Yio Chu Kang) had asked for more information about the Government's upcoming plans to digitalise the LPAs, and Mr Iswaran gave his assurance that MSF will partner other government agencies and community partners to make sure those who are not digitally savvy will not be left behind.
"MSF will also engage the relevant professional groups to ensure effective implementation of the electronic LPA," said Mr Iswaran.
He added that the ministries involved will consult stakeholders and ensure that "even as we seek to realise the benefits of digitalisation, appropriate safeguards are put in place to foster the trust that is pivotal to the success of these moves".