Brief Overview of Selective Legal and Regulatory Issues in Electronic

Brief Overview of Selective Legal and Regulatory Issues in Electronic Commerce Geneva, 14 June 2001 Dr. Carlos Moreno United Nations Conference on Trade and Development 1

Legal issues Legal uncertainties Main commercial legal obstacle Basic legal infrastructure for building trust International solutions Policy considerations 2

Legal uncertainties I - Commercial law issues writing document original signature 3

Legal uncertainties Commercial law: Evidentiary value of data messages,storage of data messages, validity and formation of contracts, incorporation of general terms and conditions. 4

Legal uncertainties II - Intellectual property issues WIPO Treaties and Domain Names III - Consumer protection OECD Guidelines IV - Authentication and security Electronic signatures legislation V - Jurisdiction and applicable law ADR/ODR Mechanisms 5

Legal uncertainties VI - Taxation WTO standstill on customs duties on e-transmissions. VII - Internet content regulation EU Commerce Directive (ISPs) VIII - Computer crime Criminal legislation. IX - Data privacy OECD Guidelines, Council of Europe Conv. EU Directive, US legislation. . 6

Main legal obstacle Negotiability Need for physical possession of original document. Documents are negotiable: – common law (ii) custom – civil law (i) statute open system 7

How to establish a functional equivalent replicating the “uniqueness” of the document ? Contractual solution (Central Registry) 8

Electronic Signatures Functions Data origin authentication Message integrity Non-repudiation 9

Legislative Approaches Minimalist: removes legal obstacles to recognition/enforceability of e-signatures. Digital signature: establish legal framework for PKIs. Two-tier: standards for the operation of PKIs and broad view of e-signature. 10

Online Dispute Resolution (ODR) Online Settlement Online Arbitration Online Mediation Online Resolution of Consumer Complaints 11

Main ADR Forms and Processes Corporate Complaint Services Assisted Negotiation Mediation Arbitration Litigation On a Sliding Scale: Facilitation Conciliation Automated, or not Voluntary or mandatory submission More or less active guidance by the neutral Automated or not Voluntary or mandatory participation Final and binding No obligation on the parties to agree, before entering ADR, that the outcome will be binding Informal to Formal ADR Source: "Building Trust in the Online Environment: B2C Dispute Resolution". Joint Conference of the OECD, HCOPIL, and ICC. The Hague, 11-12 December 2000. Orientation Document. 12

Legal solutions National legislation; International legal instruments; Contractual solutions; Self-regulation. 13

International solutions I - Model laws/guidelines UNCITRAL Model Law on Electronic Commerce UNCITRAL Uniform Rules on Electronic Signatures EU Directives on Electronic Commerce 14

But . UNCITRAL Model Law might not be sufficient to overcome legal obstacles arising from mandatory international conventions. (Vienna Convention on the Law of Treaties, 1969). 15

International solutions II - Contractual approaches European Model EDI Agreement ECE Model Interchange Agreement ECE Electronic Commerce Agreement 16

Problems encountered by contractual solutions (i) Obligations arising from mandatory legislation. (ii) Rights and obligations of third parties. (iii) Communication in an open network. 17

International solutions III - Code of Conduct - Self regulation OECD work UN/CEFACT Model IV - International Convention ? 18

Policy Considerations There is a need for a favourable legal environment to accommodate e-commerce; Governments should not over-regulate; Legislation adopted should be technologyneutral; Party autonomy should be preserved. 19