The COVID-19 pandemic emphasized that dependency on physical documents for trade transactions is not only obsolete but a source of significant risk to supply chains. Whilst great progress is being made to digitalise trade, the lack of facilitating legislation and regulations continues to be a deterrent to a large-scale shift toward digitalization. Most jurisdictions around the world still require key trade documents, such as bills of exchange, bills of lading, and warehouse receipts (all known as transferable records), to be presented in paper form.
The Model Law on Electronic Transferable Records (MLETR), developed by United Nations Commission on International Trade Law (UNCITRAL), aims to address a key roadblock in the transition to paperless trade: the lack of recognition of electronic transferable records (ETRs) in domestic legal systems. MLETR enables the use of ETRs, both domestically and across borders, by recognizing the legal validity of ETRs and giving them functional equivalence to their paper-based counterparts.
The adoption of the MLETR would improve domestic legal frameworks, create favorable conditions for the development of domestic and cross border e-commerce, enable optimization of business processes, reduce processing times, costs and human error, and drive interoperability, among other benefits.
The Asian Development Bank (ADB) is engaged in a series of efforts to advocate for the domestic adoption of, or alignment to, MLETR across multiple jurisdictions. This includes Technical Assistance support to facilitate this goal. ADB, along with the International Chamber of Commerce’s (ICC’s) Digital Standard Initiative, UNCITRAL, the Central Asia Regional Economic Cooperation (CAREC) Program, and the Georgia Ministry of Finance’s Revenue Service have joined efforts in this space. The adoption of the MLETR is part of the CAREC Integrated Trade Agenda (CITA) 2030 initiative to accelerate digital trade.
As part of this collaboration, and under ADB’s MLETR advocacy, this session provided an appropriately targeted overview of MLETR benefits, features, and technicalities as well as its critical importance in the context of advancing the digitization of trade. This session also drew the experience from jurisdictions which have adopted, or are in the process of adopting or aligning, their domestic legislation to MLETR to provide an international perspective of the process as well as the impact of MLETR adoption.
The session was designed for policy makers, including from (i) the National Bank of Georgia; (ii) the Sector Economy and Economic Policy Committee of the Parliament of Georgia; (iii) Transport Department, Communications, Information and Modern Technologies Department and other relevant units of the Ministry of Economy and Sustainable Development; (iv) the Georgia Revenue Service and the financial regulation unit of the Ministry of Finance; (v) the Ministry of Justice; (vi) the Digital Governance Agency; (viii) and Trust Services.
The private sector members of the National Committee on Trade Facilitation (NCTF), including (i) the Business Association of Georgia; (ii) the EU-Georgia Business Association; (iii) the Georgian Employers’ Association; (iv) the Association of Small and Medium Enterprises of Georgia; (v) the International Chamber of Commerce; (vi) the Banking Association of Georgia; (vii) the Association of Freight Forwarders of Georgia; (viii) the Chamber of Commerce of Georgia; (ix) the Georgian International Road Carriers Association (GIRCA); (x) the Farmers’ Association; (xi) the Business Ombudsman of Georgia; and (xii) the European Business Association, also benefited from the session.
The event was co-hosted by the Georgia Revenue Service, Ministry of Finance, in Tblisi on April 20 and more than 40 participants participated in the event.
Kamel Bouhmad, Deputy Country Director for Georgia and GRS Deputy Head Vladimer Khundadze provided opening remarks. This session was followed by a consultation meeting with key government stakeholders to discuss the next steps for ADB to support Georgia to enhance its legislative framework for digital trade.
C. Key Documents
The activity was supported by KSTA 6855-REG: Law and Policy Development for Private Sector and Public–Private Partnership Projects and TA9712: Implementing the Integrated Trade Agenda in the Central Asia Regional Economic Cooperation Program.