Since our last edition of In-Short, geopolitics have continued to generate uncertainty in the commodities markets: important differences between China and the USA in relation to trade remain unresolved, the BREXIT process is mired in parliamentary deadlock and uncertainty of outcome is now acute and, in the meantime, Norway has announced potentially far reaching changes to the investment strategy for its sovereign wealth fund in relation to oil & gas assets.

We are, once again sponsoring the FT Commodities Summit which takes place in Lausanne on 25 – 27 March, with our Corporate Partner, Simon Vere Nicoll, taking part in a panel discussion focusing on M&A activity in the commodities space. Others from Clyde & Co that will be attending the summit include our Trade Finance practice group leader, Robert Parson, regulatory expert, Clare Hatcher, commodity dispute specialists Michael Swangard and Grace Asemota as well as our Mexico office founding Partner, Enrique Garza. If you are attending the summit, you can contact each of them via the event app.

We are also sponsoring the ICCA General Counsel Conclave that takes place in Goa in April, where another Clyde & Co disputes specialist, Eurof Lloyd-Lewis, will be speaking on arbitration and litigation of commodities disputes.

In this issue we cover:

  • Block-buster: how TradeTech could change the world
  • How will the commodities industry react to geopolitical tensions and technological innovations?
  • How will the commodities industry react to geopolitical tensions and technological innovations?

Block-buster: How TradeTech could change the world

By Patrick Murphy (Partner, Dubai)

The possibilities opened up by technologies such as blockchain could revolutionise international trade; but there are legal challenges that remain to be confronted.

The promises of the so called "blockchain revolution" are almost boundless. Claims that it will change how economic rights are licensed, empower inanimate objects to communicate and interact with each, or even change the way government is carried out, could just be the tip of the iceberg. In the same way that in the early days of the internet no-one predicted the rise of the tech giants of today, it is quite possible that its second or third order effects cannot yet be comprehended. Conversely, it is just as possible that it will fall short of its more evangelical proponents' predictions.

But whatever your views on its likely consequences, what is interesting from an international trade practitioners' perspective is how many technical experts from outside the traditional trade community have concluded that, of all industries, the way in which goods are bought, sold and transported around the world is the area that is ripest for disruption.

Blockchain, or more accurately, "distributed ledger technology" (DLT) is famously the technology that underpins, and to many is synonymous with, Bitcoin. It is based on a relatively simple proposition: distributing amongst participants of a network the role traditionally played by a central administrative authority in recording transactions on a ledger. The cryptographic technology underpinning the technology means that the record of the distributed ledger is secure, immutable and – to the extent necessary – public.

But it has applications well beyond just cryptocurrencies. The ledger in question could be – as in the Bitcoin blockchain – a record of the ownership of a digital asset. But in principle a record of the economic rights relating to any asset or even just information, can be stored on a distributed ledger in a secure and immutable manner and made available to appropriate persons as required.

Which is why it could change the international sale of goods.

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