Building a digital economy

TDT Manama

Bahrain has become the first country in the Middle East and North Africa (MENA) region to ratify a key United Nations convention on electronic communications, helping to enable a new wave of digital business across the region and enhance investor protections.

The United Nations Convention on the Use of Electronic Communications in International Contracts (2005) aims to enhance commercial certainty by ensuring that contracts concluded and other communications exchanged electronically are as valid and enforceable as their traditional paper-based equivalents, and by introducing specific principles surrounding the use of technology during signing processes.

This will enter into force for Bahrain on January 1 next year. The principles of the treaty include defining terminology such as “writing” and “signature” so that all parties are protected legally when entering into a contract. The convention also aims to remove legal obstacles to the use of electronic communications in enacting previous treaties that were created before the widespread use of modern technology.

Bahrain became the 14th country globally to join the treaty, alongside major economies such as Singapore and Russia. Countries that have signed, but not yet ratified, the convention include China, South Korea and Saudi Arabia. It comes after Bahrain made history in November 2018 by becoming the first nation to enact legislation based on the UN Commission on International Trade Law (UNCITRAL) e-commerce model laws.

The move was part of a series of sweeping reforms aimed at bolstering the digital readiness of the GGC region’s $1.5trillion economy. “To build a truly digital economy in the Gulf Cooperation Council (GCC), it is essential that our regulation keeps pace with the latest developments—particularly at a time when more and more business is being conducted in the virtual realm,” said Bahrain Economic Development Board (EDB) chief executive Khalid Humaidan.

“Bahrain is leading the way on tech-driven reforms and is committed to supporting the needs of entrepreneurs and investors as they work to build long-term growth in our thriving e-commerce landscape. “We look forward to continuing to work closely with the UN as we stay on the cutting edge of legislative developments.” UNCITRAL Working Group IV (Electronic Commerce) secretary Luca Castellani hailed the development.

“The accession of Bahrain to this treaty completes the significant work that the Government of Bahrain and the UNCITRAL secretariat have carried out together to provide the Kingdom with a modern, efficient and effective enabling legal framework for the digital economy,” he said.

“I am confident that this will encourage more countries in the region and worldwide to adopt the latest UNCITRAL texts in the field.” UN Development Programme resident representative Stefano Pettinato said that “by ratifying the UN Convention on electronic communications, Bahrain sets an example on how digital technology, international law, and multilateralism are enabling factors for the promotion of international trade and the achievement of the Sustainable Development Goals through greener and more efficient protocols.”