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Brief Overview of Selective Legal and Regulatory Issues in

Electronic Commerce

United Nations Conference on Trade and Development

Geneva, 14 June 2001Dr. Carlos Moreno

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Legal issues

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

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Legal uncertainties

I - Commercial law issues

writing

document

original

signature

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

Legal uncertainties

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Legal uncertainties

II - Intellectual property issuesWIPO Treaties and Domain Names

III - Consumer protection OECD Guidelines

IV - Authentication and securityElectronic signatures legislation

V - Jurisdiction and applicable lawADR/ODR Mechanisms

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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... .

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Main legal obstacle

Negotiability

Need for physical possession of original document.

Documents are negotiable:– common law (i) statute

(ii) custom

– civil law open system

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How to establish a functional equivalent replicating the “uniqueness”

of the document ?

Contractual solution

(Central Registry)

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Electronic SignaturesFunctions

Data origin authentication

Message integrity

Non-repudiation

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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.

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Online Dispute Resolution (ODR)

Online Settlement

Online Arbitration

Online Mediation

Online Resolution of Consumer Complaints

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Main ADR Forms and Processes

CorporateComplaint

Services

AssistedNegotiation Mediation Arbitration Litigation

FacilitationConciliation

On a Sliding Scale:

Automated, or not

More or less activeguidance by the neutral

Voluntary or mandatoryparticipation

No obligation on theparties to agree, beforeentering ADR, that theoutcome will be binding

Voluntary or mandatorysubmission

Automated or not

Final and binding

Informal to Formal ADR

Source: "Building Trust in the Online Environment: B2C Dispute Resolution". Joint Conferenceof the OECD, HCOPIL, and ICC. The Hague, 11-12 December 2000. OrientationDocument.

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Legal solutions

National legislation;

International legal instruments;

Contractual solutions;

Self-regulation.

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International solutions

I - Model laws/guidelines

UNCITRAL Model Law on Electronic Commerce

UNCITRAL Uniform Rules on Electronic Signatures

EU Directives on Electronic Commerce

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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).

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International solutions

II - Contractual approaches

European Model EDI Agreement

ECE Model Interchange Agreement

ECE Electronic Commerce Agreement

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Problems encountered by contractual solutions

(i) Obligations arising from mandatory

legislation.

(ii) Rights and obligations of third parties.

(iii) Communication in an open network.

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III - Code of Conduct - Self regulation

International solutions

OECD work

UN/CEFACT Model

IV - International Convention ?

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Policy Considerations

There is a need for a favourable legal environment to accommodate e-commerce;

Governments should not over-regulate; Legislation adopted should be technology-

neutral; Party autonomy should be preserved.