The Astana International Financial Centre (AIFC) recently established the AIFC LawTech Advisory Council. In cooperation with the World Economic Forum, the AIFC has a plan to develop the first Fourth Industrial Revolution Centre in Central Asia. As a part of this effort, the Leadership of the AIFC commissioned the establishment of the multi-disciplinary, multi-stakeholder AIFC LawTech Advisory Council to provide strategic guidance to the AIFC regarding Legal Technology, and how the AIFC might become a recognised leader in LegalTech, including through the creation of a vibrant and well-funded legal technology ecosystem in the AIFC.
In this interview with Asia Law Portal, senior leaders of the AIFC detail the role the organization is playing in the economic development of Central Asia – and how it plans to become one of the world’s hubs of legal technology innovation.
Can you tell us more about the AIFC?
Dr. Kairat Kelimbetov, Governor of the AIFC: The Astana International Financial Centre (AIFC) is a brainchild of the First President of the Republic of Kazakhstan Nursultan Nazarbayev. It was first announced in 2015 as a part of the 100 Concrete Steps, nation-wide plan to establish strong state institutions and improve social and economic environment in Kazakhstan.
After three years of preparation and building the right infrastructure, AIFC was officially launched in July 2018. Today, it features legal and market ecosystem, which is unique to the vast region, which spans over Eurasian Economic Union, Eastern Europe, Central Asia, Caucasus, Mongolia, and China.
As the regional financial hub, it offers a broad range of financial and professional services improving not only financial intermediation, but also facilitating investment into the region. The AIFC’s mission is to contribute to the sustainable economic development of the region by fostering innovative financial products and services. AIFC’s strategic directions for sustainable development include advancing the circular economy, attracting investing in both physical and digital enabling infrastructure, and leveraging the 4IR to enable digital trade.
AIFC offers modern legal regime based on principles of English common law; independent court with leading British judges and International Arbitration Centre; financial regulator; and a brand-new stock exchange, which was established in partnership with Goldman Sachs, Shanghai Stock Exchange, Silk Road Fund, and Nasdaq. It has already become the go-to place for large debt and equity offering for regional companies. KazAtomProm, world’s largest uranium producer, Polymetal, leading Russian mining company, Halyk Bank, largest commercial bank in Kazakhstan, and other companies choose Astana International Exchange as a platform for public offerings.
I believe that one of the key reasons why local and international businesses choose AIFC is its trusted legal system supported by world-class institutions. International Court, separate and independent from Kazakhstan’s judiciary system, provides additional guarantees and support for businesses and their operations.
Another reason is the right business environment a number of tax expemtpions and opportunities to structure deals through special purpose companies and other entities. In addition to that, we’ve recently formed a dedicated Business Connect company, which matches investable projects and investors and helps with deal structuring. We put continuous efforts to improve our ecosystem, by introducing new features, such as digital on-boarding or investment residency program.
Can you tell us more about the Acting Law of the AIFC?
Mr. Marat Aitenov, First Deputy CEO at the AIFC Authority: The AIFC has a bespoke legal regime based on the principles, legislation and precedents of the law of England and Wales and the standards of leading global financial centres. To ensure that the AIFC’s legal and regulatory framework is compliant with the best international practices and standards, we established the AIFC Legal Advisory Council (‘LAC’). As of today, representatives of global leading law firms and barristers’ chambers such as Baker McKenzie, Herbert Smith Freehills, Hogan Lovells, Michelmores, Norton Rose Fulbright, White & Case, and 3 Verulam Buildings Barristers are members of the LAC.
The special legal regime of the AIFC is a free-standing commercial law system, designed to enable an independent international financial centre to operate. AIFC Acts are tailored in English specifically for doing business in the AIFC and, which are familiar to the global market players. As of today, we have adopted over 70 acts, which cover the majority of relationships between registered or recognised companies in the AIFC and other relevant persons: on corporate, contract, employment and other matters. The coverage of activities is being constantly extended. Another important advantage of the AIFC over the other similar centres is the English language which is the official language in the Centre. This allows foreign companies do not spend much time and money on the translation of documents as well as attract global talents from all over the world.
How does the AIFC respond to the fourth industrial revolution?
Dr. Kairat Kelimbetov, Governor of the AIFC: We genuinely believe in advancing our ecosystem and introducing new technologies to facilitate our business or widen our instruments set. We leverage the latest technologies provided by 4IR to advance our development. Needless to say, fintech has always been a pillar of our development; we have a dedicated fintech hub and regulatory fintech lab.
Moreover, AIFC is working with the World Economic Forum on establishing the first Fourth Industrial Revolution affiliate centre in Central Asia with an idea to bring the latest flavour of technologies and to transfer best practices to Kazakhstan and other Central Asian countries.
This goes in line with a wider state program on introducing new business opportunities, cutting edge technologies and science development in Kazakhstan. I believe that the disruptive technologies will bring us only benefits and opportunities to leapfrog. There is a game-changer process going on!
Part of this process is life-long professional education. Labour market responds to the quickly changing landscape on global markets, which forces us to cope with the changes and adapt to new environment. The current global crisis only accelerates these changes and escalates the demand for new skills and qualities.
Distance learning and use of online platforms have proven to be resilient to shocks such as pandemic. Online education is now changing the market and affects how school and universities provide their services. I believe that in the constantly changing world all businesses and platforms must be as much flexible and resilient as possible, therefore we strive to combine both offline and online modes of education through AIFC Bureau for Continuous Professional Development, our in-house “university of the future”.
At the BCPD, young professionals have an opportunity to obtain globally-recognised professional certifications. We also look beyond just financial education and aim at preparing professionals for the new 4IR and new digital era. Just recently we’ve launched industry-leading software engineering school in partnership with Silicon Valley edutech.
Who is involved in the leadership of the new AIFC LawTech Advisory Council?
Mr. Mark Beer, OBE, Chairman of the AIFC LawTech Advisory Council: The AIFC LawTech Advisory Council comprises a group of internationally recognised experts in the field of law and LegalTech as academics, inventors, entrepreneurs, policy makers, lawyers and regulators. They come from such jurisdictions as Kazakhstan, Netherlands, Singapore, Switzerland, the UK and the USA. AIFC LawTech Advisory Council Members’ talents are as diverse as they are inspirational:
Most recently, at the Law Society, Ms. Sophia Adams Bhatti led the legal and regulatory policy team with oversight for policy development across the full breadth of law reform, engaging with policy makers in government, and partner agencies, both domestically and internationally.
Under the coordination of Mr. Marat Aitenov, the General Legal Framework of the AIFC that is based on the principles, norms, and precedents of English law was developed.
Dr. Joseph Lee is known as one of the leading researchers on Artificial Intelligence and distributed ledger technology. He advised a central bank and government agencies and provides training to the judiciary.
Dr. Sam Muller has previously worked for the UN where he engaged in the promotion of Sustainable Development Goals such as the rule of law at national and international levels and ensuring equal access to justice for all.
Dr. Alessandro Palombo co-founded Jur, a blockchain-based ecosystem for creating smart legal contracts. Besides, he is an Advisor of the European Observatory on Legal Technologies and a Member of the Scientific Committee of San Marino Innovation.
Mr. Colin Rule has extensive experience in the dispute resolution field. From 2003 to 2011 Colin was Director of Online Dispute Resolution for eBay and PayPal. In addition, he is currently Co-Chair of the Advisory Board of the National Center for Technology and Dispute Resolution at UMass-Amherst and a Non-Resident Fellow at the Gould Center for Conflict Resolution at Stanford Law School.
Apart from 12 years spent on the management of a large international law firm helping drive establishment and significant build-out of the business and networks across the Middle East, North Africa, and Asia Pacific regions, Mr. Clinton Swan has been helping out building out several start-up and legaltech projects.
Dr. Mimi Zou is the co-founder the Deep Tech Dispute Resolution Lab at Oxford Law Faculty and a distinguished international expert of the Asia Society Policy Institute Belt and Road Initiative Task Force. In 2016, the Asia Society named Dr Zou an ‘Asia 21 Young Leader’.
What will be the focus of the AIFC LawTech Advisory Council?
Mr. Marat Aitenov, First Deputy CEO at the AIFC Authority: As many financial centres currently focus their resources on the development of FinTech, such area as LegalTech was overlooked. To fill this gap, the Leadership of the AIFC has commissioned the establishment of a multi-disciplinary, multi-stakeholder AIFC LawTech Advisory Council to provide strategic guidance to the AIFC regarding Legal Technology, and how the AIFC might become a recognised leader in LegalTech, including through the creation of a vibrant and funded legal technology ecosystem in the AIFC.
The AIFC LawTech Advisory Council was formed with the aim of developing the LegalTech ecosystem in the AIFC, which can improve the efficiency and quality of legal services and make them more accessible.
To achieve these goals, the AIFC LawTech Advisory Council will promote cooperation between the AIFC and international stakeholders in the field of LegalTech, provide strategic guidance and recommendations for the development of a world-class regulatory framework on LegalTech.
What future role does the AIFC want to play in the regional LegalTech community?
Mr. Mark Beer, OBE, Chairman of the AIFC LawTech Advisory Council: It is vital to mention that the AIFC is the first financial centre in the world to develop LawTech ecosystem that supports transformation in the way that the people can get access to legal advice. The legal technology industry is a very promising area and the AIFC focuses on it as one of the core directions. Legal services are currently unaffordable to many people across the world, courts are overwhelmed with the number of cases, and most of the lawyers look for ways to become more productive and innovative.
Therefore, I believe that this is the perfect time to embrace technology and create a favourable environment for the growth of regional and global start-ups, innovators, and disruptors.
It should be noted that the AIFC is open to new ideas and disruptive technologies. We very much welcome innovators, start-ups, and tech companies in our state-of-the-art financial centre and are ready to support them in many ways.