The United Nations Commission on International Trade Law (UNCITRAL) is looking at the creation of a negotiable cargo document that could be used in air cargo to transfer ownership of goods while in transit.
Unlike ocean bills of lading, transport documents issued by rail, road and air carriers, which are often known as consignment notes or air waybills in the case of air cargo, are not used as documents of title and cannot be transferred to another party during transport.
The negotiable cargo document under development at UNCITRAL is intended to serve as a document of title to fill this gap in multimodal and unimodal transportation not involving a maritime leg.
The working group said that documents of title can provide flexibility in international trade and can also facilitate the use of trade finance.
“A document of title can be transferred to another person, making it easier to buy and sell goods while in transit,” the fact sheet explained.
“This is particularly valuable in international trade where shipments can take some time or have to be re-loaded during the voyage (e.g., multimodal transport) and the parties may wish to be able to sell or otherwise dispose of the goods for financial, operational, or strategic reasons.
“In addition, documents of title can provide better security for banks and financial institutions providing trade finance, such as the letter of credit.
“By becoming holders of documents of title, banks and financial institutions could exercise control over the goods.”
Four working group sessions have been held in Vienna and New York to consider a set of preliminary draft provisions for the new instrument on negotiable cargo documents.
However, it is understood the new document would require a new convention as an international legal basis, so its implementation could be years away.
Source: https://www.aircargonews.net/airlines/un-commission-examines-the-creation-of-negotiable-cargo-documents-for-air-cargo/
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