1. UNCITRAL United Nations Commission on International Trade Law The work of UNCITRAL in electronic commerce Jae Sung LEE Legal Officer, UNCITRAL Office of Legal Affairs United Nations

2. UNCITRAL United Nations Commission on International Trade Law When and why was UNCITRAL established?

3. UNCITRAL United Nations Commission on International Trade Law United Nations Org Structure United Nations System

4. UNCITRAL United Nations Commission on International Trade Law

5. UNCITRAL United Nations Commission on International Trade Law 60 member States elected by the General Assembly considering geographical regions and levels of economic development Non-member States participate as observer States and no difference in deliberation Term of 6 years with half (30) of the members reelected or replaced every 3 years (next elections to be held in 2015) Current African Member States are: Algeria, Botswana, Cameroon, Cote d’Ivoire, Gabon, Kenya, Liberia, Mauritania, Mauritius, Namibia, Nigeria, Sierra Leone, Uganda & Zambia Composition of UNCITRAL

6. UNCITRAL United Nations Commission on International Trade Law Organization of work The Commission Working Groups The Secretariat

7. UNCITRAL United Nations Commission on International Trade Law Two sessions per year alternating between New York (spring) and Vienna (fall) Almost all topic involve some aspects of electronic commerce 6 Working Groups I. Micro, medium & small-sized enterprises II. Arbitration III. Online Dispute Resolution IV. Electronic Commerce V. Insolvency Law VI. Security Interests The Commission Working Groups The Secretariat

8. UNCITRAL United Nations Commission on International Trade Law UNCITRAL Texts Negotiated with universal participation and reflect balance of national, regional, economic, legal and other interest Drafted with a view to ensure compatibility with the various legal traditions including Islamic law Methods operate at different levels and involve different types of compromise or acceptance Move from a hard law to soft law ConventionModel Law Legislative Guide

9. UNCITRAL United Nations Commission on International Trade Law UNCITRAL Texts Conventions - Designed to unify law by establishing binding legal obligations Model Law - A legislative text recommended to States for enactment as part of their domestic law Legislative Guide - A set of principles and legislative recommendations for legislators to consider in their enactment of domestic law ConventionModel Law Legislative Guide

10. UNCITRAL United Nations Commission on International Trade Law Convention

11. UNCITRAL United Nations Commission on International Trade Law Model law

12. UNCITRAL United Nations Commission on International Trade Law Legislative Guide

13. UNCITRAL United Nations Commission on International Trade Law UNCITRAL texts: Electronic Commerce UNCITRAL

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15. UNCITRAL United Nations Commission on International Trade Law Why do we need laws on electronic commerce? Traditional transactions – can’t existing laws apply by analogy? Has always been a game of catch (law follows technology)  Should be simple  Legal recognition of the electronic means  Contain basic principles  Should be “enabling” rather than being regulatory

16. UNCITRAL United Nations Commission on International Trade Law UNCITRAL Texts on Electronic Commerce Provides comprehensive legal framework for electronic transactions Based on the following underlying principles: Non-discrimination Functional equivalence Technological neutrality Party autonomy

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21. UNCITRAL United Nations Commission on International Trade Law (1)Where the law requires information to be in writing, that requirement is met by a data message if the information contained there is accessible so as to be usable for subsequent reference. (2) Paragraph (1) applies whether the requirement therein is in the form of an obligation or whether the law simply provides consequences for the information not being in writing. Article 5. Legal Recognition of Data Messages Article 6. Writing

22. UNCITRAL United Nations Commission on International Trade Law (1)Where the law requires a signature of a person, that requirement is met in relation to a data message if: (a) a method is used to identify that person and to indicate that person’s approval of the information contained in the data message; and (b) that method is as reliable as was appropriate for the purpose for which the data message was generated or communicated, in the light of all the circumstances, including any relevant agreement. (2) Paragraph (1) applies whether the requirement therein is in the form of an obligation or whether the law simply provides consequences for the absence of a signature. Article 7. Signature

23. UNCITRAL United Nations Commission on International Trade Law Article 8. Original Article 9. Admissibility and evidential weight of data messages Article 10. Retention of data messages Chapter III. Communication of data messages (Articles 11 to 15)

24. UNCITRAL United Nations Commission on International Trade Law Legislation implementing the MLEC has been adopted by Cabo Verde (2003), Ghana (2008), Mauritius (2000), Rwanda (2010), Zambia (2009).

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26. UNCITRAL United Nations Commission on International Trade Law (a) “Electronic signature” means data in electronic form in, affixed to or logically associated with, a data message, which may be used to identify the signatory in relation to the data message and to indicate the signatory’s approval of the information contained in the data message; Article 2. Definitions Nothing in this Law, except article 5, shall be applied so as to exclude, restrict or deprive of legal effect any method of creating an electronic signature that satisfies the requirements referred to in article 6, paragraph 1, or otherwise meets the requirements of applicable law. Article 3. Equal treatment of signature technologies

27. UNCITRAL United Nations Commission on International Trade Law 1. Where the law requires a signature of a person, that requirement is met in relation to a data message if an electronic signature is used that is as reliable as was appropriate for the purpose for which the data message was generated or communicated, …. 3. An electronic signature is considered to be reliable … if: (a) The signature creation data are, within the context in which they are used, linked to the signatory and to no other person; (b) The signature creation data were, at the time of signing, under the control of the signatory and of no other person; (c) Any alteration to the electronic signature, made after the time of signing, is detectable; and (d) Where a purpose of the legal requirement for a signature is to provide assurance as to the integrity of the information to which it relates, any alteration made to that information after the time of signing is detectable. Article 6. Compliance with a requirement for signature

28. UNCITRAL United Nations Commission on International Trade Law Legislation implementing the MLES has been adopted in: Barbados (2001), Cape Verde (2003), China (2004), Costa Rica (2005), Ghana (2008), Guatemala (2008), India (2009), Jamaica (2006), Mexico (2003), Nicaragua (2010), Paraguay (2010), Qatar (2010), Rwanda (2010), Saint Lucia (2011), St. Vincent and the Grenadines (2007), Saudi Arabia (2007), Thailand (2002), Trinidad and Tobago (2011), UAE (2006), Viet nam (2005) and Zambia (2009).

29. UNCITRAL United Nations Commission on International Trade Law Electronic Communications Convention

30. UNCITRAL United Nations Commission on International Trade Law 3. Where the law requires that a communication or a contract should be signed by a party, or provides consequences for the absence of a signature, that requirement is met in relation to an electronic communication if: (a) A method is used to identify the party and to indicate that party’s intention in respect of the information contained in the electronic communication; and (b) The method used is either: (i) As reliable as appropriate for the purpose for which the electronic communication was generated or communicated, in the light of all the circumstances, including any relevant agreement; or (ii) Proven in fact to have fulfilled the functions described in subparagraph (a) above, by itself or together with further evidence. Article 9. Form requirements

31. UNCITRAL United Nations Commission on International Trade Law Entry into force of the ECC Entry into force on 1 March 2013 States parties: Dominican Republic, Honduras, Singapore, Russia, Congo 15 other signatories (Central African Republic, China, Colombia, Iran, Lebanon, Madagascar, Montenegro, Panama, Paraguay, Philippines, Republic of Korea, Saudi Arabia, Senegal, Sierra Leone, Sri Lanka) Australia, Thailand, Sri Lanka have declared intention to adopt Other States have adopted substantive provisions of the ECC domestically (Ghana, as an example)

32. UNCITRAL United Nations Commission on International Trade Law Promoting confidence in electronic commerce (2007) Analyzes main legal issues regarding Signatures and authentication methods Cross-border use of electronic signatures and authentication methods

33. UNCITRAL United Nations Commission on International Trade Law Current agenda of Working Group IV Draft provisions on electronic transferable records (electronic cheques, promissory notes, bills of lading, warehouse receipts …)  notions of “possession”, “uniqueness”, “entitlement of rights” are being debated. Identity management, single windows, cross- border recognition considered as future topics More information available at http://www.uncitral.org/uncitral/en/commission/wo rking_groups/4Electronic_Commerce.html http://www.uncitral.org/uncitral/en/commission/wo rking_groups/4Electronic_Commerce.html

34. UNCITRAL United Nations Commission on International Trade Law Works of other organizations UN ESCAP’s works on paperless trade UN/CEFACT (ECE) work on Authentication of Trade Documents (rec 14) and SW interoperability UNODC work on Identity Theft (Identity management) EU – proposed Regulation on electronic identification and trust services (list of certified authorities, trusted lists) Euro-med workshop

35. UNCITRAL United Nations Commission on International Trade Law UN CEFACT Recommendation 14 UN Centre for Trade Facilitation and Electronic Business – under the auspices UN Economic Commission for Europe Revision of the outdated recommendation 14 on authentication of trade documents Revised draft finalized and under public review Recommends (i) removal of signature requirement (ii) electronic authentication methods of equal status and (iii) regular review.

36. UNCITRAL United Nations Commission on International Trade Law PKI and legal issues “Electronic signature or authentication” includes: Digital signature relying on a PKI Biometrics Passwords Scanned signatures No direct reference to digital signatures in the UNCITRAL texts or UNCEFACT Recommendation

37. UNCITRAL United Nations Commission on International Trade Law PKI and legal issues Technology-specific approach: “for higher level of security, recognizes only digital signatures within a PKI as a valid means of authentication”/ Possible exclusion of emerging technologies and limited cross-border use Minimalist approach: “recognizes all technologies for electronic signature” and maintains technology neutrality/ Security issues Two-tier approach: a low threshold for legal status and greater legal effect to certain authentication methods

38. UNCITRAL United Nations Commission on International Trade Law PKI and legal issues Balancing between “security in electronic transactions” and “technological neutrality and mutual recognition” Legal and technological incompatibilities hinder cross-border use but technology-specific legislations more because: (i) legal and technological requirements also for e- signatures and certification service providers (ii) technology standards and licensing requirements

39. UNCITRAL United Nations Commission on International Trade Law PKI and legal issues Recognizing PKI prevalence, the following issues need to be considered: Interoperability (cross-recognition, cross certification between PKIs) Recognition of foreign authentication services Non-discrimination for “foreign” signatures and services Technology neutrality and development Conduct and liability regimes

40. UNCITRAL United Nations Commission on International Trade Law Trade facilitation and paperless trade Trade facilitation aims at simplifying procedures and controls relating to movement of goods. The goal of trade facilitation is to reduce direct and indirect trade costs – benefits for end users and consumers More cross-border trade = economic development No prejudice to regulatory objectives, but mutual reinforcement ICT may provide great opportunities for trade facilitation through concepts such as paperless trade and electronic single window facilities

41. UNCITRAL United Nations Commission on International Trade Law The intersection of law and technology Paperless trade often understood as a technological process Legal aspects are equally relevant to ensure enforceability of laws, regulations and contractual agreements Need to adopt an adequate “enabling” legal framework Contractual provisions do not suffice: statutory rules and implementing regulations are necessary Voluntary standards (co-regulation) may also be useful

42. UNCITRAL United Nations Commission on International Trade Law Elements of paperless trade Notion built around trade facilitation in customs operations through electronic single windows – a B2G transaction Goal to set up cross-border single windows – a G2G international transaction But international trade is a B2B transaction Key legislative challenge: legally enable G2B exchanges, including cross-border Need to take into account the broader e- government context

43. UNCITRAL United Nations Commission on International Trade Law Implementation of enabling legal environment Enabled means no barrier to electronic exchanges – B2B, B2G and G2G Adoption of modern legislation, preferably based on uniform texts (such as those of UNCITRAL) Application of that legislation to the public sector to the maximum extent possible Avoid over-regulation; consider co-regulation Transition to paperless environment is an occasion to review and reengineer processes and streamline existing laws

44. UNCITRAL United Nations Commission on International Trade Law Factors relevant for paperless trade Technological: model chosen for paperless trade – E.g., single window architecture Cultural: prevailing economic model and legal tradition – Legal: regulatory elements vs. enabling elements

45. UNCITRAL United Nations Commission on International Trade Law Legal topics relevant for paperless trade E-transactions and e-contracting Authentication / security (e-signatures, IdM) Data protection and retention Liability of SW facility operator Cybercrime, electronic evidence … UN/CEFACT Rec. 35 Single Windows & Interoperability

46. UNCITRAL United Nations Commission on International Trade Law E-transactions law Establishes general principles applicable to all electronic transactions – Ideally, regardless of the nature of the subject involved (public or private) Often based on the UNCITRAL model laws – High degree of harmonisation across the world Limited number of provisions needed to address technology requirements

47. UNCITRAL United Nations Commission on International Trade Law E-contracting law In general, contract and liability law are not affected Certain areas (letters of credit, bills of lading) are still not electrified – Lack of industry trust or of adequate legislation When dealing with public offices, special rules may be needed (e-procurement) The cross-border dimension needs further work Consumer protection outside scope of paperless trade

48. UNCITRAL United Nations Commission on International Trade Law Cyber security: seeking a balance Cyber security is a leading concern for both private and public sector Should not hinder the use of electronic communications – Differentiate among users, operations PKI can provide several services: origin, integrity, time- stamping – However, has not delivered as expected Some loopholes lie outside the IT system – E.g., identification

49. UNCITRAL United Nations Commission on International Trade Law Authentication: the challenges Driven by security concerns, not trade facilitation Regulation should help, not hinder trade facilitation Excessive costs and redundancy of systems led to IdM Cross-border recognition of electronic signatures is rare – Only article 9(3) ECC for B2B exchanges Number of different approaches for electronic signatures – In various jurisdictions – In the same jurisdiction, private vs. public sector Authentication of objects or authentication in a mobile environment not fully taken into account

50. UNCITRAL United Nations Commission on International Trade Law Data retention and protection Increasing attention for protection of databases, emerging technical standards Additional concerns about taking of evidence in investigations and admissibility in criminal and other proceedings – especially in cross-border context Commercially-sensitive data is exchanged – duty to keep confidentiality remains unchanged Electronic systems can be more or less secure than paper-based ones, depending on architecture and operating standards

51. UNCITRAL United Nations Commission on International Trade Law Concrete steps for priority action E-transactions / e-contracting is the area where the law is most settled Consolidate B2B legal environment by adopting the United Nations Convention on the Use of Electronic Communications on International Contracts Overcome the B2G divide by favouring convergence while respecting fundamental principles of electronic transactions ESCAP Resolution 68/3 on paperless trade and its implementing measures may provide guidance in this process

52. UNCITRAL United Nations Commission on International Trade Law For more information, please visit the UNCITRAL web site @ http://www.uncitral.org/ or e-mail me at jaesung.lee@uncitral.orgjaesung.lee@uncitral.org