A Proposal for UNCITRAL to Develop a Model Law on Warehouse Receipts

Abstract

This article fleshes out a proposal made during the Fourth International Secured Transactions Colloquium, held in March 2017, for UNCITRAL to develop a model legal framework for warehouse receipts. It argues that most developing economies have sufficient warehousing infrastructure and secondary markets, but lack a modern warehouse receipts law. To support this argument, it includes a summary of the recent projects funded by various agencies to promote warehousing of goods, and agricultural commodities in particular. It describes the recent efforts to create a model framework for warehouse receipts and provide guidance on the establishment of a warehouse receipts system by entities such as the Organization of American States, the World Bank Group, and the Food and Agriculture Organization. Furthermore, the article analyzes the work of UNCITRAL in the field of negotiable documents and concludes that such work has not addressed many aspects typically regulated by warehouse receipts laws. The analysis also focuses on the emerging practice of issuing electronic warehouse receipts, their trading through commodity exchanges, and the utilization of emerging technologies, such as blockchain, to dematerialize warehouse receipts. Finally, the article explores the most common modalities of warehousing services, the parties involved in warehouse receipts transactions, the characteristics of warehouse receipts in different jurisdictions, and the benefits of electronic systems, identifying the areas that ought to be covered in a model warehouse receipts framework.

Keywords: warehouse receipt, security interest, blockchain, distibuted ledger technology, commodity exchange