The Jogorku Kenesh Committee on Finance, Budget, Entrepreneurship, and Competition Development supported a new version of the law "On Commodity Warehouses and Warehouse Certificates" on November 10. According to Deputy Minister of Economy and Commerce Benazir Nurlanova, the document was revised by more than 50%, as the previous version, adopted in 2018 at the initiative of the Asian Development Bank, was effectively non-functional.
Digitalization and new opportunities for business
The main change will be the move away from paper media. Warehouse certificates will now be digital and recorded in a unified registry of the Central Depository. This will allow commodity owners to use certificates as collateral for obtaining loans from banks or to sell products on the exchange through brokers.
Myktybek Abirov, Vice President of the Kyrgyz Stock Exchange, noted that current paper documents cannot be traded on the exchange, whereas a digital format will solve this problem. Meanwhile, the stock exchange itself will maintain the registry of warehouses, and enterprises wishing to enter trading will have to undergo verification for compliance with established requirements.
Scope of application
The new law expands the scope: while it previously focused primarily on agriculture, it will now cover other categories, such as cement. The current situation regarding the use of this mechanism demonstrates its low efficiency.
System performance indicators
"Currently, warehouse certificates are maintained in paper form. In short, we are transitioning them to a digital format and providing farmers with the opportunity to use certificates as collateral."
Context
Jogorku Kenesh Deputy Ilimbek Kubanychbekov emphasized that only four warehouse certificates were issued during the entire period the old law was in effect.
