– New wave of legislations includes Electronic Communications and Transactions Law –
– Ground-breaking reforms to bridge trade and finance seamlessly, strengthen Bahrain’s digital economy –
In a global first, Bahrain has enacted the Model Law on Electronic Transferable Records (MLETR), developed by the United Nations Commission on International Trade Law (UNCITRAL). The move is part of a series of sweeping reforms aimed at bolstering the digital readiness of the GGC region’s US$1.5 trillion economy.
In strategic cooperation with the UNCITRAL Secretariat, Bahrain also revised its existing Electronic Transactions Law with new provisions that align with the United Nations Convention on the Use of Electronic Communications in International Contracts and renamed it the Electronic Communications and Transactions Law.
A 2018 report by KPMG titled ‘The Cost of Doing Business in the GCC’ in the ICT sector recognised Bahrain as having the most liberalised and competitive IT sector in the region with the lowest costs for critical ICT metrics, such as cross-border internet connectivity. While building on this foundation, the new laws further enhance the country’s competitiveness on a global scale. The overall benefits of the legislations include:
- Electronic Transferable Records Law – introduces electronic transferable records that are functionally equivalent to commercial documents and instruments issued on paper, such as bills of lading, bills of exchange, cheques, promissory notes and warehouse receipts. These electronic documents allow the person who holds them to claim payment of a sum of money or delivery of certain goods, enabling the merger of the finance and logistics supply chains in a single data workflow.
- Electronic Communications and Transactions Law – updates the current electronic transactions law and promotes a wider use of electronic communications in business.
His Excellency Khalid Al Rumaihi, Chief Executive of the Bahrain Economic Development Board (EDB), said:
“Bahrain continues to lead the way in digital reforms. The latest achievement of being the first country in the world to adopt the UNCITRAL Model Law on Electronic Transferable Records gives us an unrivalled advantage in the GCC region. The new laws are a key step forward in achieving the Bahrain Vision 2030 and The Economic Vision 2030 for Bahrain.”
Electronic transferable records and transactions offer unprecedented flexibility, speed, security and scope, covering the entire gamut of electronic commerce, including distributed ledgers such as blockchain. These capabilities support the goals set by public-private partnership-led initiatives such as Team Bahrain, which has succeeded in attracting investments from leading multinationals into the country.
His Excellency Khalid Al Rumaihi continued:
“From a regional perspective, Bahrain has achieved many firsts in its 47-year history – from discovering oil to diversifying its economy, as well as driving innovation through the GCC region’s first FinTech sandbox. We are confident that the new legislations will revolutionise the way we do business, develop talent and create a sustainable trading environment.”
Luca Castellani, Secretary of Working Group IV (Electronic Commerce) of the United Nations Commission on International Trade Law (UNCITRAL), noted:
“Bahrain is the first country in the world enacting the Model Law on Electronic Transferable Records, which establishes a modern legislative framework for a digital-first economy by legally enabling, for example, the use of blockchain in fintech and logistics. The adoption of UNCITRAL texts, including the incorporation of additional provisions in the revised Electronic Transactions Law, helps creating confidence in overseas traders and investors that Bahrain is committed to upholding modern commercial law standards and places Bahrain at the forefront of innovation and business-friendliness.”
Bahrain is at the forefront of economic liberalisation in the GCC region, demonstrated by reforms such as allowing 100 per cent foreign ownership of businesses across various sectors, from arts and entertainment to telecoms, manufacturing and real estate. Notably, the influx of foreign direct investments into the country increased by over 138 per cent to US$810 million in the first nine months of 2018, making it one of the region’s fastest-growing economies.
– ENDS –
For more information, please contact:
Communications and Media Department
Economic Development Board
Phone: +973-17-589972
E-mail: internationalmedia@bahrainedb.com
About Bahrain Economic Development Board
The Bahrain Economic Development Board (EDB) is an investment promotion agency with overall responsibility for attracting investment into the Kingdom and supporting initiatives that enhance the investment climate.
The EDB works with the government and both current and prospective investors, in order to ensure that Bahrain’s investment climate is attractive, to communicate the key strengths, and to identify where opportunities exist for further economic growth through investment.
The EDB focuses on several economic sectors that capitalise on Bahrain’s competitive advantages and provide significant investment opportunities. These sectors include financial services, manufacturing, ICT, tourism, logistics and transport.
For more information on the Bahrain EDB visit www.bahrainedb.com; for information about Bahrain visit www.bahrain.com.
