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In the past few decades, rapid advancements in information and communication technologies (ICT) have radically transformed the world. It is difficult to find an area of the society and economy, whether commercial or non-commercial, that has not been touched upon by the ICT revolution. An important development of the ICT revolution has been in the area of digitalization. Going digital has become the most important priority today given the various advantages of digitalization such as reduction in cost and time, accessibility of people to services that were earlier out of reach due to geographical or other constraints, transparency, and good governance, and so on. Digitalization in the area of trade facilitation is also being promoted by various multilateral and regional organizations such as the World Trade Organization (WTO) and the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP). Several countries, mainly the advanced ones, have made most trade facilitation processes paperless as far as practicable.

The WTO Trade Facilitation Agreement (TFA) is the only multilateral agreement on trade facilitation. It entered into force on 22 February 2017. The TFA covers all the important aspects of trade facilitation and cooperation among WTO members. Among other things, it emphasizes electronic means of communications and transactions for trade facilitation, such as advance lodging of documents in electronic format for pre- arrival processing; electronic payment of duties, taxes, fees, and charges at customs; and establishment of single window and use of ICT to operate the single window as far as practicable. Nepal accepted the WTO TFA on 24 January 2017.

Similarly, several organizations such as the World Bank, Asian Development Bank (ADB), United Nations Conference on Trade and Development (UNCTAD) and UNESCAP, among others, have been promoting paperless trade and providing technical and other required support to many countries for its adoption. UNESCAP has also been requesting its member countries to sign/accede to/ratify the ‘Framework Agreement on Facilitation of Cross-Border Paperless Trade in Asia and the Pacific,’ which entered into force on 20 February 2021. According to UNESCAP’s estimates, full implementation of cross-border paperless trade could reduce trade costs by 10-30 percent of existing transaction costs in the Asia-Pacific region. Nepal is yet to sign the agreement.

Nepal has been making efforts, mostly unilaterally, to digitalize trade processes and create a paperless trade regime. It introduced the Electronic Transactions Act (ETA) in 2006 and its supporting ETA Rules in 2007 that paved the way for many transactions to be performed through electronic means in place of the traditional, paper-based transactions. Similarly, it provisioned for and implemented several reforms in relation to customs, including making many customs processes paperless, during the course of implementing several iterations of the Customs Reform and Modernization Plan. It has also identified actions in the ‘Digital Nepal Framework’ that would help make trade processes paperless. Despite these efforts, challenges remain in the full implementation of paperless trade in Nepal, more so for cross-border paperless trade, which have been aptly covered in the ‘Readiness Assessment for Cross-Border Paperless Trade: Nepal’ conducted by UNESCAP in 2019.

There have been some developments in Nepal in relation to advancing towards a paperless trade regime during/after the Readiness Assessment for Cross-Border Trade was undertaken in 2019. The most important of these has been the progress made in the operationalization of the Nepal National Single Window (NNSW). Hence, while this study discusses Nepal’s efforts overall in moving towards a paperless (including cross-border) trade regime, it mainly focuses on the NNSW. As we will see later, advancements made within NNSW are still related to domestic aspects of paperless trade, and very little has been achieved in terms of cross-border paperless trade. We discuss the challenges and offer some way forward.