Electronic commercial documents: More security through LEI and vLEI

25 септември 2024

Electronic trade documents are becoming more critical in the increasingly digitalised world of global trade. Platforms such as WaveBL are driving this development by using innovative technologies to increase the security and transparency of transactions. The Legal Entity Identifier (LEI) and the verifiable LEI (vLEI) play a central role. These identification standards help to reliably identify the companies involved and thus make trading more secure and efficient.

Digitalisation of trade through electronic documents

The global introduction of electronic bills of lading (eBLs) is progressing rapidly. These digital alternatives to paper documents offer numerous benefits, from greater efficiency to lower costs. Global initiatives such as the Model Law on Electronically Transferable Records (MLETR) are creating the legal framework to promote the use of eBLs in international trade.

WaveBL, a leading platform for digitising trade documents, relies on blockchain technology to process electronic documents securely. As part of this effort, the LEI, a globally standardised identification system for businesses, plays a key role in authenticating the parties involved in transactions.

The LEI as a standard for digital identification

The Legal Entity Identifier (LEI) is a global standard that enables the unique identification of companies. This is crucial in digital commerce, as electronic transactions often involve large sums of money and complex business relationships. Using the LEI ensures that all companies involved are uniquely identified, minimising the risk of error, fraud, and litigation.

WaveBL has integrated the LEI into its platform to increase the security and reliability of commercial documents such as eBLs and electronic bills of exchange (eBoEs). This enables transparent and traceable documentation, strengthening the parties’ trust.

The advantages of combining PDIs and LEIs

In addition to the LEI, WaveBL offers its users so-called Platform Digital Identifiers (PDIs), which act as digital mailboxes and represent companies on the platform. However, these PDIs are only as secure as the data on which they are based. By combining PDIs with the LEI, WaveBL can ensure reliable and standardised digital identification. This integration increases the accuracy and security of digital transactions while enabling better cross-platform collaboration.

The challenges of identification in e-commerce

One of the biggest challenges in global e-commerce is consistently and reliably identifying businesses across different platforms. Currently, different systems use different approaches to identify companies, which can lead to inconsistencies and potential legal issues. The LEI provides a globally accepted standard that simplifies and standardises the identification of companies.

This process can be further improved through the use of verifiable LEIs (vLEIs). The vLEI enables automated verification of companies’ identities, which reduces manual effort and increases efficiency in e-commerce.

Interoperability in global trade through LEIs

Smooth cooperation between different platforms is crucial in international trade. The LEI contributes significantly to cross-platform interoperability by providing a common and standardised identity that other systems can use. This facilitates the secure and efficient exchange of trade documents across borders and jurisdictions.

WaveBL uses the LEI to ensure that all parties to a transaction are uniquely identified. This increases confidence in the integrity of the documents, regardless of the platform on which the transaction is conducted.

Protection against fraud and compliance with regulations

In e-commerce, all companies involved must be legitimate and authorised to participate in a transaction. The LEI offers a solution by providing each company with a verifiable and standardised identifier. This significantly reduces the risks of fraud and unauthorised actions.

In addition, the LEI helps with regulatory compliance by providing a reliable method of tracking the parties involved. The introduction of the vLEI will further automate this process and facilitate compliance requirements.

The future impact of the LEI on global trade

As trade becomes increasingly digitalised, the need for standardised identification methods such as the LEI will continue to grow. The LEI, particularly the vLEI, will play a central role in making trade more secure, efficient and transparent.

Integrating the LEI and vLEI into digital trading platforms such as WaveBL will pave the way for a fully digitalised trading environment. Implementing these identification standards will help make global trade utterly paperless by 2030 and increase trust in electronic transactions.