# Legal Asset Boundaries

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**Trade leads to transport**

Transport is almost always a consequence of trade. In the delivery conditions of a purchase agreement, the seller and buyer agree, among other things, who must take care of the transport of the shipment.

In international trade, seller and buyer can use the Incoterms 2020. These are standardized agreements about who arranges what (for example transport, but also insurance and/or customs formalities), payment and payment guarantees, and the moment at which responsibility is transferred (for example when a container is lifted over the rail of a ship). Incoterms 2020 are mainly focused on the agreements between buyer and seller.

**Transport agreement**

As a result of the agreements in the purchase agreement, one of the parties gives one or more orders to arrange transport. In a more complex chain, forwarders often arrange the details on behalf of the client, but in the case of a relatively simple order this is usually done directly.

**Digital transfer of accountability and liability**

Paper documents have been the standard in the professional transport of goods for centuries. They serve as a basis for business agreements ('contracts': agreements, insurance, credits), as a means to coordinate activities ('coordination': coordination in the transport chain), and as a basis for declarations to and inspections by governments ('compliance' : demonstrate that one complies with the applicable legislation). Many laws, work processes and customs are based on this paper backbone.

The new standard is digital. Mutual agreements, planning, transactions, transfers and notifications are handled as much as possible by the IT systems of the companies and governments involved. Automated, with less and less human intervention, to facilitate:

**Demonstrability**: being able to show the origin of goods and the environmental effects of a supply chain.

**Managing scarcity**: scarce infrastructure, labor shortages, limited environmental space and shortages of    raw materials, energy or products. The only way to make well-founded choices is to provide more information and insight.

&#x20;**Resilience:** absorbing the consequences of disruptions and shocks in the global economy.

&#x20;**Preventing undermining**: both cutting off opportunities for crime and fraud,  preventing and detecting tax evasion.

**Legal asset boundary management**

Just like a stamp or a 'wet' signature on paper, it's all about the details that determine how much legal strength a digitally recorded transaction has. And on the other hand, the desire or necessity of the parties involved (client, transporter and recipient) to set high, low or no requirements at all: even not to build in digital transaction recording at all.

There are many more digital variants than 'analogue'. And all of them have their specific properties, advantages and disadvantages. The legal status of variants (other than high quality "digital signatures" for valuable transactions) is diffuse.

As there is no global accepted standard or legal franework for "fit for use" recordings of digital transactions, the BDI supports commercial agreements between parties, called Edge Agreements.

Standardized protocols with corresponding liability definitions can be referenced in general conditions of agreements, creating the legal basis for "fit for use" Legal Asset Boundary Management.

