The Asian Development Bank (ADB), through its Trade and Supply Chain Finance Program (TSCFP), has initiated a series of discussions with government agencies in several of its developing member countries to help them align their regulatory frameworks with international laws that enable paperless trade.
In close collaboration with the International Chamber of Commerce (ICC), the Digital Standard Initiative (DSI), and the United Nations Commission on International Trade Law (UNCITRAL), ADB is advocating for the adoption and alignment of national regulations with UNCITRAL’s Model Law on Electronic Transferable Records (MLETR).
MLETR creates a legal framework for national laws to enable the use and recognition of electronic transferable records, both domestically and across borders.
Suzanne Gaboury, ADB private sector operations department director general, said, “Laws recognising electronic trade documents are crucial to digitalise global trade and realise tremendous benefits for economies in terms of growth and jobs.
We are convinced that the widespread adoption of MLETR, or comparable legislation, holds the promise of increased efficiency, security, and transparency of global trade and supply chains. Digitalisation of trade is a key priority for ADB. We are working hard with our developing member countries to create more resilient, green, and inclusive trade and supply chains that are good for business, the environment, and economies.”
Replacing physical documents for trade, such as bills of lading, with electronic versions would allow more companies in developing Asia—especially small and medium-sized enterprises (SMEs)—to access global trade and supply chains. It will also make it easier to monitor activities in those networks to ensure adherence to environmental and social standards.
This year, as part of accelerating digital trade under the Central Asia Regional Economic Cooperation (CAREC) Integrated Trade Agenda 2030, ADB is providing technical assistance on MLETR to the People’s Republic of China (PRC) and Georgia.
Working closely with the PRC’s Ministry of Commerce and with the Georgia Revenue Service under the Ministry of Finance, the initiative will raise public and private stakeholder awareness of MLETR, and its benefits to trade, as well as facilitate national-level discussions on the potential adoption of MLETR and enabling reforms to digitalise trade.
Legal Reform Advisory Board (LRAB) and ICC DSI co-chair Chris Southworth said, “This initiative is extremely welcome and provides a model of best practice for other multilateral development banks. Time and again, I hear the same story from businesses. The number one obstacle to delivering a cheaper, faster, simpler trade system is legal barriers. It’s absolutely essential these barriers to digitalising trade documents are removed and legal systems are aligned to MLETR.
This will enable trade information to flow in digital form and all the unnecessary paper, bureaucracy, and inefficiency to be removed. Removing legal barriers will provide a trading environment fit for the 21st century, enabling technology solutions to scale, reduce barriers to finance, and crucially allow more small companies to participate at a lower cost.”
ADB, the ICC, and the Government of Singapore have formed LRAB as part of the DSI to help harmonise legislative frameworks.
ADB is joined in this global initiative by partner multilateral institutions, including the European Bank for Reconstruction and Development, the Bankers Association for Finance and Trade, the Commonwealth, Economic and Social Commission for Asia and the Pacific (ESCAP), the International Trade and Forfaiting Association, UNCITRAL, and the ASEAN Economy Community.
Backed by ADB’s AAA credit rating and working with more than 250 partner banks, TSCFP enables trade and supply chains with loans and guarantees that underpin economic growth and create jobs to improve people’s lives. TSCFP initiatives help to make global trade and supply chains green, resilient, inclusive, transparent, and socially responsible.