"I hope you enjoy this issue of the Law in Transition journal. It was written under the extraordinary circumstances of a global pandemic and contains many lessons learned by our programme."
- Milot Ahma
- Ammar Al-Saleh
- Catherine Bridge Zoller
- Veronica Bradautanu
- Enrico Canzio
- Gian Piero Cigna
- Bob Davies
- Gabriel De Lastours
- Pavle Djuric
- Jyldiz Galieva
- Kimberly Guo
- Vesselina Haralampieva
- Zsoka Koczan
- Arzu Kutadgu
- Paul Moffatt
- Svenja Petersen
- Markus Renfert
- Yulia Shapovalova
- Michael Strauss
- Sophie Vermorel
- Yuliya Zemlytska
- Alexei Zverev
ForewordLegal reform in the time of Covid-19
In 2020 Covid-19 revolutionised the way we live and work. And accordingly, the crisis changed the way international financial institutions provide their assistance. When the pandemic struck, the EBRD rapidly put in place a €4 billion Solidarity Package of crisis-response investments. But the response was not limited to financing; the EBRD also seized the opportunity to reimagine policy dialogue in a global pandemic. Helping governments improve their legal environments for business had to be adapted to the emergency we faced. This led to some new directions – and new opportunities – in our technical assistance activities.
First, the crisis has highlighted the need to accelerate the digital agenda for legal and judicial reforms. The initial few stories in this issue of the Law in Transition journal consequently focus on digitalisation: online courts, online mediation, blockchain at the Georgia Ministry of Justice, and e-learning for Armenian judges, to name a few. This reflects a new and exciting orientation in our programme.
In leading the charge for technical assistance for digitalisation, we are directly aligning with the digital transition theme of the EBRD’s newly approved Strategic and Capital Framework for 2021-2025. For the judicial sector in particular, online courts will be the next chapter in digitalisation. Online courts can help by improving access to justice during the pandemic, but also by reducing the chronic backlogs of cases that predate the crisis. The EBRD will take a leading role in the economies where it invests to formulate strategies for developing online courts. In the initial phase, the focus will be on small claims courts, which are seen as a good place to debut reforms.
Second, the EBRD’s Legal Transition Programme (LTP) has responded to the Covid-19 crisis with an enhanced focus on insolvency law. In the aftermath of the pandemic, many businesses will struggle economically and may become insolvent. In the medium term, countries must enact measures that support these businesses through the turbulent times ahead. The crisis calls for special rules to offer otherwise sound companies a second chance through financial restructurings. To help achieve this in the economies where we invest, the LTP has launched a new assessment of restructuring regimes, which should allow our specialists to define the most appropriate targets for this technical assistance.
As one additional technical assistance response to the Covid-19 crisis, the LTP has developed projects to advise small and medium-sized enterprises on survival techniques, focused on legal issues arising from the crisis. The team has turned to webinars to deploy this emergency legal advice throughout 2020, and continuing into 2021. It has reached hundreds of small businesses in the Kyrgyz Republic, Moldova, Mongolia and Uzbekistan.
Although the Covid-19 crisis is the main story, it is not the only story in legal reform. The LTP has continued to deliver assistance to governments on a series of commercial and financial law matters, as you will see in the following pieces. In spite of the pandemic – and in some ways because of it – building sound legal systems remains a priority for promoting investment and creating resilient markets.
Excitingly, our work in this year’s journal represents a true cross-cutting initiative, covering contributions from specialists across the EBRD. It is especially gratifying to welcome contributions co-authored by EBRD staff outside the Office of the General Counsel, including the Banking Department and the Vice-Presidency for Policy and Partnerships.
We hope this publication will generate debate and encourage policymakers to improve their legislative frameworks and institutions, create more investor-friendly legal regimes and expand their citizens’ access to justice. As the United Nations Secretary General, António Guterres, recently said in an address to the General Assembly: “In a global crisis, we must meet the expectations of those we serve with unity, solidarity and coordinated multilateral global action”.
"Our work in this year’s journal represents a true cross-cutting initiative, covering contributions from specialists across the EBRD."
This has been a peculiar year for the EBRD’s Legal Transition Programme. Normally our lawyers would have been travelling extensively to meet country officials, discussing their needs in terms of legal technical cooperation and providing advice to them. But the last 12 months have instead been spent working from home without any country visits. The Covid-19 pandemic has radically changed the way we deliver our assistance.
Perhaps the biggest surprise has been to see how it is possible to provide advice remotely via email and video conferences. The response has varied depending on the country but overall we can say that most counterparts have been extremely receptive and ready to adapt to the “new normal”. In this way, the EBRD has been able, through its Legal Transition Programme, to continue playing an active role in helping the economies where we invest to upgrade their legal environment for business. We are happy to share some stories with our readership, showing what we have accomplished in the last year.
As the General Counsel noted in the Foreword, the pandemic has accelerated the digital agenda of the economies in the EBRD regions. Creating online tools for state institutions had been on their to-do lists for a while, but with the pandemic it suddenly became a priority. The first few stories in this journal reflect the new prominence of this digital transformation.
In the first article, Michael Strauss and Veronica Bradautanu reflect on the introduction of online courts. They show how the Covid-19 crisis has emphasised the structural and economic inefficiencies of judiciaries, which will, in turn, create a greater impetus for change.
Milot Ahma and Ammar Al-Saleh then present the potential of blockchain to support the digital transformation of public services in Georgia. Going beyond the use of this technology in the financial sector, they make the case for its extended use in public administration.
In the next article, Yulia Shapovalova and Jyldyz Galieva advocate the use of online mediation as an effective way for small and medium-sized enterprises (SMEs) to resolve disputes during the Covid-19 pandemic. Online tools are a great way to circumvent the inability of traditional mediation techniques to operate during and after the crisis.
Catherine Bridge Zoller and Bob Davies look at insolvency law reform in Armenia. This has included online training for insolvency judges and insolvency practitioners, thus creating a stronger environment for addressing the needs of insolvent businesses.
The next piece is by Paul Moffatt and presents the findings of a survey on investor perception in the broadband connectivity sector. The survey records directly the views of a wide range of existing and potential stakeholders, including finance providers, telecommunications network and service operators, broadband and internet service providers, analysts and other market stakeholders.
In the following article, Gian Piero Cigna, Pavle Djuric, Zsoka Koczan and Yuliya Zemlytska discuss the role of state-owned enterprises (SOEs) in the EBRD regions, with a focus on the governance of SOEs and how they differ from private sector entities.
The next piece looks at how international financial institutions (IFIs) have responded to Covid-19 and the role of their legal experts. Enrico Canzio and Kimberly Guo interviewed lawyers from the International Fund for Agricultural Development, Asian Development Bank, the EBRD and International Finance Corporation. Their testimonials show how IFI lawyers are playing a vital role in setting up new facilities targeted to help countries respond to the crisis.
In the following story, Alexei Zverev looks into the legal regime for public-private partnerships in the three Caucasus states (Armenia, Azerbaijan and Georgia) and considers the potential for boosting this efficient tool to develop much-needed infrastructure projects in the region.
Vesselina Haralampieva, Gabriel de Lastours and Sophie Vermorel report on an EBRD investment in Tunisia, where the Bank has advised a big utility company on developing a corporate climate governance action plan.
Markus Renfert and Arzu Kutadgu then consider the development of the Turkish debt capital market in light of a new legal regime for bondholders’ meetings and bondholders’ representatives.
Lastly, Ammar Al-Saleh and Svenja Petersen look at the prospects for SME development in Uzbekistan, based on the findings of a technical assistance project focusing on SME-sector policies and on removing obstacles faced by these businesses.
I hope you enjoy this issue of the Law in Transition journal. It was written under the extraordinary circumstances of a global pandemic and contains many lessons learned by our programme. We are happy to share these experiences with you and we look forward to your feedback.
"The EBRD has been able, through its Legal Transition Programme, to continue playing an active role in helping the economies where we invest to upgrade their legal environment for business. We are happy to share some stories with our readership, showing what we have accomplished in the last year."