Internet transactions are giving business evolution a radical twist, and their security merits close attention. Probably the best known organisation using digital security in the shipping industry is Bolero. Graham Harris, Partner at Richards Butler, the international law firm, here considers the Bolero system.
All users of the Bolero system join Bolero Association Limited (BAL), a non-profit making association owned by the users. Bolero International Ltd, which provides services to BAL, is a joint venture between the Through Transport Mutual club and S.W.I.F.T., the banking organisation which deals with money transfers.
Security by code
Bolero system security is achieved by digital cryptography, which encrypts messages, using private and public keys to create and verify a digital signature. Messages are passed on only to those entitled to receive them. It is estimated that the paperwork associated with international freight transport may absorb between 7 and 10 per cent of the cost of trade and is now too cumbersome for the rapid and efficient movement of goods. Paper documentation, too, often trails behind the arrival of the goods which it documents.
Richards Butler conducted a legal feasibility study to consider the law in a number of important jurisdictions and to suggest solutions to any problems, so as to give Bolero the greatest chance of achieving acceptability in key jurisdictions. They concentrated on 18 jurisdictions which were either main trading nations or representatives of a legal system. Included in the survey were detailed questions on the choice of law and jurisdiction, and other subjects included evidence in court and transfer of property in goods. A key question is whether local courts will accept evidence of electronic documentation. This proved much less of a problem than anticipated, and suitable legislation is being introduced or considered in many countries.
To the carrier, the main advantage of the Bolero system over paper documentation is that the carrier will know immediately to whom he should deliver the goods at the discharge port. This should remove the need for delays at the discharge port, and also the need for letters of indemnity from the person to whom the goods are delivered.
Despite the fact that the adoption of e-commerce is still in its relative infancy, Graham Harris believes the time is right for the application of e-commerce to the international movement of goods. People are used to the concept of working in a paperless environment in a way which was inconceivable even 10 years ago. Though some may for a while duplicate with paper some of the transactions, Bolero will still have an important role in speeding up documentary processes and providing a degree of certainty. Lawyers tend only to get involved in the disasters and forget that in the vast majority of cases goods are carried from A to B satisfactorily. Anything that reduces the paperwork and cost and speeds up the bureaucratic processes in such transport will be warmly welcomed.