Decree on Development of Digital Economy
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| Decree on Development of Digital Economy | |
|---|---|
| Ratified | 21 December 2017 |
| Signatories | Alexander Lukashenko |
| Purpose | to liberalize the conditions for conducting business in the sphere of high technologies in the Republic of Belarus |
The Decree No. 8 'On the Development of Digital Economy' is a presidential decree in Belarus that created favourable legal conditions for the information technology (IT) sector, stimulating the inflow of international investments and local startups development. The idea of the document was proposed and formulated by the High-Tech Park, a core organization in Belarusian IT. The Decree was signed on 21 December 2017, and came in force on 28 March 2018. Decree No. 8 adopted the widespread institutions of UK law like convertible bonds and non-compete agreements, but also has preserved some features of continental law based on the principles of good faith and reasonableness, thus creating a favourable environment for starting and running a business.
As a result of the Decree introduction, Belarus became the first country in the world to legalize smart contracts and cryptocurrencies. As a result, the number of HTP resident companies increased by 600 by 2020, and Belarus' IT exports exceeded $3 bln as of the same year.
Proposal
By early 2017, the Belarusian IT Belarusian IT community and, first of all, the High-Tech Park resident companies were concerned that the existed model of work created the conditions for the growth of custom software development and IT outsourcing, but did not help companies that create their software products thus preventing Belarusian IT from rapid growth. The lack of a system and a legal framework for venture financing also obstructed the development of Belarusian startups.[1]
In January 2017, the President's assistant Vsevolod Yanchevsky, well-known for his liberal views, was appointed to lead the project of drafting a decree that would help create a more favourable environment for the development of the IT sector.[2] On 13 March 2017, Alexander Lukashenko visited HTP residents and held a meeting with the managers, who voiced to the President the reasons why a legislative framework was essential to stimulate the growth of IT businesses and outlined their main ideas in this regard.[3][4] A month later, on 21 April, in his annual address to the parliament and the Belarusian people, Lukashenko ordered to develop a new decree on the High-Tech Park, which would attract international companies engaged in the most promising areas—driverless transport, artificial intelligence, digital currencies.[5][6]
To develop a new decree, the Administration of the High-Tech Park engaged representatives of the IT industry and expert community, held dozens of meetings with technology companies, as well as Belarusian and international legal and consulting firms, including Aleinikov & Partners, Vlasova, Mikhel & Partners, Baker Tilly Bel, and others.[7] Denis Aleinikov, a Belarusian lawyer, is referred to as the main creator of the Decree, he and his company developed a legal framework for smart contracts and proposed to implement certain institutions of English law to boost venture capital financing in Belarus.[8][9][10][11][12][13]
The draft was first published in several sources in July 2017. It sparked widespread discussion among specialists and market participants.[14][15] Afer much debate, in September 2017, the draft was submitted to Alexander Lukashenko as a part of a package of liberal reforms of business legislation. The President suggested rethinking the title of the document, as its provisions affected not only the High-Tech Park, but also the Belarusian economy at large.[16]
Discussion
The draft and the key points of the Decree were published in June 2017, welcomed by the members of the IT industry and harshly criticized by some economists.[17] Critics opposed to the new decree argued that the draft's authors should have focused on the overall development of civil law reform so that the beneficial effect would influence all sectors of the economy; they criticized the orientation of Belarusian IT companies to foreign markets and argued that unmanned cars were irrelevant to Belarusian reality, that crypto-currencies could be risky economic bubbles, and that the technology of the blockchain is technically not legal, and is only applicable to the operation of cryptocurrencies. Meanwhile the supporters responded that the reform should start in a test box which would be used later for overall reform, so the authors of the Decree focused on the IT sphere they understood and the obstacles to its growth. They emphasized the significance of modern technologies for the country's future; they also noted that the expanded list of HTP work areas was drawn up taking into account the main contemporary trends, and the Decree creates the legal basis necessary for the development of breakthrough technologies.[18][19][20]
Signing
By the beginning of December, a document called the "Decree on the Development of Digital Economy" had been approved by all authorized official bodies and again submitted to the President.[21] The Decree was signed by the President on 21 December 2017,[22][23] and came in force on 28 March 2018.[24]