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Interactive guide on cross border paperless trade

Cross-border paperless trade has great potential to not only grow trade competitiveness, but also to address new challenges associated with e-commerce and the digital economy. The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), in collaboration with the United Nations Commission on International Trade Law (UNCITRAL) and the Enhanced Integrated Framework (EIF) have launched an interactive guide to support readiness assessments on cross-border paperless trade.

The Online Readiness Assessment Guide for Cross-border Paperless Trade is designed to support countries in the region to conduct self-assessments of legal and technical readiness on cross-border paperless trade. With the new guide, countries have at their disposal, comprehensive guides on how to conduct readiness assessments, without the need for intensive physical travelling of experts. They will also be able to interact virtually with experts for further guidance on conducting readiness assessment on a request basis.

The guide is expected to support member States in conducting self-assessments of their legal and technical readiness for cross-border paperless trade, as a first step towards developing a concrete action plan for implementation. The Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific, that the guide is supporting the implementation of, is designed so that countries at all levels of development and digitalization can participate, leaving no one behind. I urge all member States to complete ratification as soon as possible,” said United Nations Under Secretary General and Executive Secretary of ESCAP, Ms. Armida Salsiah Alisjahbana at the launching.

The Online Readiness Assessment Guide for Cross-border Paperless Trade is an important diagnostic tool to identify opportunities for adopting laws and regulations that enable paperless trade. UNCITRAL texts are a core component of that legal environment. The importance of taking prompt action in this area has recently been highlighted by the discussions on how to mitigate the economic effects of the COVID-19 pandemic. “We are pleased to have cooperated with ESCAP and EIF in preparing this Online Guide and look forward to work with all concerned partners to support States in this critical endeavor,” shared Ms. Anna Joubin-Bret, Secretary, UNCITRAL.

“The potential benefits from digitalization of trade processes are substantial. The online interactive guide on cross-border paperless trade will be instrumental in supporting countries to assess their technical and legal gaps in electronic exchange of trade data and documents with other trading partners. We look forward to working with our partners, including ESCAP, to support least developed countries in the region to strengthen their institutional capacity and harmonize data standards towards the vision of an Asia-Pacific paperless trading environment,” said the Executive Director of the Executive Secretariat for the EIF, Dr. Ratnakar Adhikari.

Readiness assessments on cross-border paperless trade support implementation of the Framework Agreement on Facilitation of Cross-Border Paperless Trade in Asia and the Pacific, which will become effective on 20th February 2021. Five countries – Azerbaijan, Philippines, Islamic Republic of Iran, Bangladesh and China – have thus far ratified or acceded to this UN treaty. In addition, Armenia and Cambodia have signed in 2017, with several more in the process of completing their domestic processes for accession.

The treaty, with its common set of general principles and a dedicated intergovernmental platform, will support countries in building on the bilateral and sub-regional digital trade solutions they have already developed to achieve greater, region-wide paperless trade. By enabling exchange and legal recognition of trade data and documents, it could reduce trade costs by 25 per cent across the Asia-Pacific region and support more seamless and resilient trade.

Moreover, the policy responses to the COVID-19 pandemic are having a significant impact on the cost of trading goods across borders. Despite measures taken by many countries to keep goods moving across borders, ESCAP research reveals that international trade costs faced by importers and exporters in the region are expected to rise by 7 per cent on average this year, with some facing increases in costs exceeding 20 per cent.

The new guide is relevant to all countries globally, as it can support the implementation of not only the treaty but also the full digital implementation of the World Trade Organization (WTO) Trade Facilitation Agreement (TFA).

The Online Readiness Assessment Guide resulted from strong partnerships and continuous efforts in the Asia-Pacific region and beyond. It is based on legal and technical readiness assessment checklists developed by the Interim Intergovernmental Steering Group on Cross-border Paperless Trade Facilitation at ESCAP and its Legal and Technical Working Groups, with contributions from the United Nations Network of Experts for Paperless Trade and Transport in Asia and the Pacific. It benefited from the legal expertise on e-commerce of the UNCITRAL, as well as support from the EIF under a joint project on facilitating cross-border trade in LDCs for sustainable development. It also incorporates lessons learned from other ESCAP trade facilitation projects funded by China, the Russian Federation as well as the Republic of Korea.

Pakistan perspective

State Bank of Pakistan (SBP) has issued regulatory framework to facilitate Business-to-Consumer (B2C) e-commerce exports from Pakistan. Under the new regulatory framework, the mandatory requirement of ‘Export’ (E) form has been done away with and now an exporter can export goods up to USD 5,000/- per consignment without the requirement of ‘E’ Form. This step will facilitate exports in small quantities directly to the consumers. This will also help small entrepreneurs and exporters who typically export varied goods in small quantities and find it cumbersome to fulfill the detailed requirements of E Form that is mainly designed for bulk exports.

Lately, the global emerging trends especially in the consumer market place have seen a major shift from traditional market place to e-commerce due to the advent of new technologies. A surge in this trend was particularly witnessed during the global lockdown owing to COVID-19 pandemic. In line with these trends, SBP focused on facilitating cross border trade for B2C (Business to Consumer) exports from Pakistan, including by small entrepreneurs and exporters. This was aimed at improving competitiveness and digital connectivity of Pakistani businesses with the global market during the development phase of e-Commerce Policy.

It merits mentioning here that up till now, goods from Pakistan could only be exported after certification of Electronic/Manual Export (‘E’) Form-E by the Authorized Dealers (ADs) and subsequent filing of Goods Declaration by the customers with Pakistan Customs. The ‘E’ Form was required for each shipment with complete description of the goods being exported and had been designed keeping in view the export of large quantities of homogenous goods. However, for exports of small value different items to individuals destined for different jurisdiction, (as is the case in B2C e-commerce exports) the existing process was not conducive.

Earlier, in 2000, SBP had issued regulatory instructions to promote B2C e-Commerce, in Foreign Exchange Manual, with primary focus on opening of Internet Merchant Account to facilitate e-commerce. However, with advancement in technology, these instructions needed to cater to the current business dynamics of e-commerce and therefore required to be replaced. Accordingly, SBP collaborated with the relevant stakeholders including business community, Pakistan Customs, Ministry of Commerce, courier companies and banking industry in a bid to develop a regulatory framework, which not only addresses the market needs but also takes into account regulatory objectives.

The new regulatory framework would address the pressing demand of e-commerce exporters, including the small entrepreneurs, besides providing the much needed impetus for the recognition and growth of e-commerce exports from Pakistan. It would also pave the way for the big corporate brands, SMEs, and startups, to enter the global consumer markets and contribute to the exports earning of the country. The new regulatory framework is expected to be beneficial in improving country’s rating in the Ease of Doing Business index. Moreover, this framework would also help in documenting the exports of small shipments, which earlier could not be included in the formal exports of the country due to absence of any such framework.

Performance during q1fy21

During Q1FY21, the number of registered mobile phone banking users reached 8.9 million, showing an increase of 41% over Q1FY20. The number of internet users of bank websites reached 4.3 million with a growth of 26% over the same period

Mobile banking transactions increased to 36.4 million amounting to Rs908.7 billion, marking an increase of 139% by volume and 211% by value when compared with the same period last year

Internet banking transactions increased to 18.9 million, valuing Rs1.1 trillion during Q1FY21, registering a growth of 55% in volume and 89% in value, as compared to the same period last year.

The State Bank of Pakistan released its Quarterly Payment System Review (QPSR) for the first quarter, July-September 2020, of the fiscal year 2020-21 today, which shows strong growth in the pace of digital financial transactions in the country.

Promoting digital financial services is a key goal of the SBP. According to the data reported in the review, digital payment transactions in Pakistan have increased significantly during Q1FY21, largely due to the impact of measures taken by SBP creating incentives for customers. Growth in digital payment infrastructure as well as emergence of new payment aggregators have also been a contributing factor in this growth. Moreover, it also reflects the changes in consumer’s preference for digital transactions amid Covid19 situation.

During the quarter, 253.7 million e-banking transactions were conducted by customers valuing Rs19 trillion. E-banking transactions comprised of Real-Time Online Branches (RTOBs) Transactions, ATM Transactions, Internet Banking Transactions, Mobile Phone Banking Transactions, e-commerce, POS, and Call Center/ IVR Banking.

Although, RTOB transactions have a major share of e-banking transactions in terms of value, about 80%, other types of transactions are more than 83% of the e-banking transactions in terms of volume. During Q1FY21, the most promising uptake was seen in internet banking and mobile banking transactions as the number of registered mobile phone banking users reached 8.9 million showing an increase of 41% over Q1-FY20 and the number of internet users touched 4.3 million with a growth of 26% over the same period.

Accordingly, the mobile banking transactions increased to 36.4 million amounting to Rs908.7 billion, marking an increase of 139% by volume and 211% by value when compared with the same period last year. Similarly, internet banking transactions increased to 18.9 million, valuing Rs1.1 trillion during Q-FY21, registering a growth of 55% in volume and 89% in value, in comparison to the same period last year.

Another major avenue of e-banking transactions is through Point of Sale (POS), whereby people make transactions using credit or debit cards typically for shopping at markets. The number of transactions through POS machines that declined sharply during Q3 and Q4 of FY20, owing to the closure of markets amid Covid19, recovered significantly in Q1FY21.

The number of transactions through POS was recorded at 16.8 million amounting to Rs. 92.3 billion, showing an increase of 47% in terms of volume and 49% in value during Q1FY21 over Q4FY20. In addition to POS based transactions, card based transactions on e-commerce portals also followed a similar trend – a fall during Q3 and Q4 of FY20 due to COVID-19 related decline in economic activity, and a recovery in Q1FY21.

Such transactions were recorded at 3.9 million, amounting to Rs.11.9 billion in Q1FY21, exhibiting strong growth of 70% by volume and 27% by value, when compared with the Q4FY20. Nevertheless, a strong growth in e-commerce transactions can also be witnessed as the number of transactions and their value grew by 77% and 47% when compared with Q1FY20.

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