On Monday, December 5th, 2016, the National Law Center for Inter-American Free Trade (NatLaw) was pleased to host a one-day event in which Mexico’s Ministry of Economy and the City of Tucson signed a Memorandum of Understanding promoting Natlaw’s work on the development and implementation of an electronic warehouse receipt system in Mexico. Present at the meeting were Mayor Jonathan Rothschild of Tucson, representatives of the Ministry of Economy, Elsa Ayala and Carla Vazquez, the Mexican Consul in Tucson, Ricardo Pineda, along with Mark Weber, Project Manager of the Digital Currency initiative at the Massachusetts Institute of Technology’s Media Lab. Also present at the meeting were representatives from the Mexican Warehouse Association, Governor Doug Ducey’s Southern Arizona Office, national and Arizona-based financial institutions such as JP Morgan Chase Bank and Alliance Bank of Arizona, representatives from U.S.-based warehouses licensed by the Chicago Mercantile Exchange (CME), as well as private investors and friends of NatLaw.
Elsa Ayala, General Deputy Director of Commercial Regulation for Mexico’s Ministry of Economy gave a presentation on Mexico’s legislative and regulatory objectives and needs. Next, Dr. Boris Kozolchyk, Founder and Executive Director at NatLaw, noted the importance of warehouse receipts, stating that in 2013 USD$3.9 billion worth of merchandise was subject to a receipt in Mexico. Dr. Kozolchyk also highlighted recent double-spending frauds in Mexico due in great measure to the paper-based warehouse receipt system currently in place and commented on the potential of electronic warehouse receipts to revolutionize access to credit for agro-based businesses. Adalberto Elias, NatLaw’s Research Attorney, provided an overview of NatLaw’s draft legislative proposal for enabling the issuance, transfer and collateralization of electronic warehouse receipts in Mexico and noted how such a system will completely eliminate the double-spending problems the country faces. Finally, Mr. Mark Weber discussed the possibility of using blockchain technology to implement the electronic warehouse receipt system in Mexico. Recognizing the pioneering work of NatLaw, Mr. Weber indicated that the media lab is interested in partnering with NatLaw to engage in knowledge sharing and pilot projects. Furthermore, he shared his belief that the attributes of blockchain technology match well with NatLaw and Mexico’s goal of creating a trusted system that allows parties to transact in a secure and authenticated manner, one which accommodates the interests of all participants.
Additionally, Elsa Ayala, General Deputy Director of Commercial Regulation for Mexico’s Ministry of Economy mentioned that Mexico is excited about the work of NatLaw on EWRs, and looks forward to implementing a modern and best practice EWR system in conjunction with NatLaw.
In concluding, Dr. Kozolchyk stated that NatLaw’s work on creating an EWR system for Mexico could serve as a model for other developing countries in Latin America and the rest of the world.
To view a video of the meeting and its highlights click here.