Regulatory Sandboxes (Experimental Legal Regimes) for Digital Innovations in BRICS

• Author: E. Gromova - T. Ivanc
• Position: South Ural State University (Chelyabinsk, Russia) - University of Maribor (Maribor, Slovenia)
• Pages: 10-36

BRICS LAW JOURNAL Volume VII (2020) Issue 2

ARTICLES

REGULATORY SANDBOXES EXPERIMENTAL LEGAL REGIMES

FOR DIGITAL INNOVATIONS IN BRICS

ELIZAVETA GROMOVA,

South Ural State University (Chelyabinsk, Russia)

TJAšA IVANC,

University of Maribor (Maribor, Slovenia)

https://doi.org/10.21684/2412-2343-2020-7-2-10-36

Step by step, new digital technologies are capturing dierent spheres of our life. The

opportunities of their application are almost innite, and potential is very promising. But

digital innovations as a trend represent a challenge for every modern state. Especially for

member-countries of the BRICS union who seek to become the world’s leading countries.

For this reason, the most important task for the members of BRICS is to create adequate

“smart” regulation, which oers alternative ways of regulatory impact on transforming

business relations. Using the regulatory sandbox as an experimental legal regime is

one of the ways to test the creation, production, and realization of digital innovation.

Having been first applied in 2016 in the United Kingdom, nowadays this model is

successfully implemented in such countries as Singapore, Australia, and the United

Arab Emirates. Member-countries of BRICS are only beginning to adopt this unorthodox

tool; in most of its countries the legal framework is ongoing now. The aim of this research

is to analyze current legislation and legal framework on the regulatory sandboxes in

BRICS countries, dene features of national models, diculties and further prospects

of its usage. This research is based on the comparative and formal juridical analysis of

legislation, draft laws, and research papers dedicated to regulatory sandboxes in BRICS.

The authors identify dierent barriers and risks of using regulatory sandboxes for the

digital innovations successfully and oer some ways to overcome these challenges,

including the formulation of guidelines for operating regulatory sandboxes based on

a balance of public and private interests. The authors conclude that it is necessary to

ELIZAVETA GROM OVA, TJAšA IVANC 11

update legislation on the regulatory sandboxes for reaching positive eect from the

digital transformation and make several suggestions for optimization its provisions. The

results achieved in research paper can be used both in the lawmaking process as well as

the foundation for further scientic researches.

Keywords: regulatory sandboxes; experimental legal regime; smart regulation; digital

economy; innovations.

Recommended citation: Elizaveta Gromova & Tjaša Ivanc, Regulatory Sandboxes

(Experimental Legal Regimes) for Digital Innovations in BRICS, 7(2) BRICS Law Journal

10–36 (2020).

Table of Contents

Introduction

1. Regulatory Sandboxes as a New Tool of Smart Regulation and

Innovations’ Facilitator: Denition, Genesis, and Related Constructions

2. Status of the Legislation on the Regulatory Sandboxes in Member-

Countries of BRICS

2.1. Regulatory Sandboxes in the Federative Republic of Brazil:

Readiness for Legal Framework Process

2.2. Experimental Legal Regimes (Regulatory Sandboxes) for the Digital

Innovations in the Russian Federation: Problems of the Draft Law

2.3. Regulatory Sandboxes in the Republic of India: The Beginning

of the Legal Framework’s Creation

2.4. Regulatory Sandboxes in the People’s Republic of China:

Aspiration to Get Ahead

2.5. The Republic of South Africa: Looking for Proof of Regulatory

Sandboxes’ Legitimacy and Eciency

3. Global World Trends in Regulatory Sandboxing: The Way to Global

Regulatory Sandbox or “Sandbox for Sandboxes”

4. Recommendations on Setting Up a Regulatory Sandbox for BRICS

Countries: Keeping a Balance Between Private and Public Interests

Conclusion

Introduction

The fourth industrial revolution and global digitization process have led to the

appearance of new, innovative, or “disruptive” technologies, which aect and transform

dierent spheres of modern social life. Such innovations as high-performance and cloud