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Inter-American Juridical Committee - October 2016

Inter-American Juridical Committee Approves Principles for Electronic Warehouse Receipts for Agricultural Products

During its most recent regular session (October 2016), the Inter-American Juridical Committee (CJI) recommended adoption of Principles for Electronic Warehouse Receipts for Agricultural Products, a topic that was included on its agenda in 2012 out of concern over the lack of access to credit in the agricultural sector. Warehouse receipt financing is a form of asset-based lending where the stored (“warehoused”) products are used as collateral, which increases lender confidence in loan recovery. Because producers receive needed cash against the warehouse receipt, which is issued as soon as the goods are delivered, they are no longer forced to sell their farm products immediately upon harvest and can delay sale until prices are more favorable. Improved performance of the agricultural sector has been shown to be essential in many countries as a way to stimulate economic growth and development.

Inter-American Juridical Committee Approves Principles for Electronic Warehouse Receipts for Agricultural Products

An effective warehouse receipt system requires both a reliable network of the physical infrastructure – (i.e., modern warehouses) - and a supportive legal framework. Accordingly, the CJI considered it important to develop principles that would: a) promote a reliable system of warehouse receipt financing; b) compliment and strengthen other reform initiatives in secured lending; c) apply equally to both paper-based and electronic receipts; d) straddle differences between common law and civil law systems of warehouse receipts; and d) contribute towards ongoing efforts in the development of related international norms. In this regard, the CJI acknowledged important work in the field by the United Nations Commission on International Trade Law (UNCITRAL), the Food and Agriculture Organization of the United Nations and European Bank for Reconstruction and Development (FAO/EBRD) and the World Bank Group.

» For the report and text of the principles, see “Electronic Warehouse Receipts for Agricultural Products”, CJI/doc. 505/16 rev. 2 of September 27, 2016.

For further information on this matter, please contact the Department of International Law of the OAS – Technical Secretariat of the Inter-American Juridical Committee +1 202 370 0743. 

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