Regional Conference on TRADE FACILITATION, THE SINGLE WINDOW CONCEPT, AND HARMONIZATION OF TRADE DATA REQUIREMENTS IN THE SOUTH CACASUS Introduction to

Regional Conference onRegional Conference on

TRADE FACILITATION, THE SINGLE WINDOW TRADE FACILITATION, THE SINGLE WINDOW CONCEPT, AND HARMONIZATION OF TRADE CONCEPT, AND HARMONIZATION OF TRADE

DATA REQUIREMENTS IN THE SOUTH CACASUSDATA REQUIREMENTS IN THE SOUTH CACASUS

Introduction to Introduction to Draft Recommendation 35:Draft Recommendation 35:

Establishing a Legal Framework for anEstablishing a Legal Framework for anInternational Trade Single WindowInternational Trade Single Window

Professor William J. Luddy, Jr.Professor William J. Luddy, Jr.Special Legal Counsel - WCOSpecial Legal Counsel - WCO

June 2009June 2009

Presentation made by Mario Apostolov, Regional Adviser UNECE TradePresentation made by Mario Apostolov, Regional Adviser UNECE [email protected]@unece.trade

DISCLAIMERDISCLAIMER

Please note that the views and analysis that Please note that the views and analysis that are provided here or discussed during are provided here or discussed during our session are not necessarily those of our session are not necessarily those of any organization with which any organization with which Bill LuddyBill Luddy may be working. They represent his may be working. They represent his views on the legal topics in this views on the legal topics in this presentation.presentation.

IntroductionIntroduction• International recognition of the importance of International recognition of the importance of

the legal infrastructure of the Single Window the legal infrastructure of the Single Window for International Trade.for International Trade.

• Regional Developments: ASEAN, APEC, SEE, Regional Developments: ASEAN, APEC, SEE, The European Commission, and othersThe European Commission, and others

• Leading International OrganizationsLeading International Organizations– UN Centre for Trade Facilitation and Electronic UN Centre for Trade Facilitation and Electronic

Business (UN/CEFACT)Business (UN/CEFACT)– United Nations Commission on International Trade United Nations Commission on International Trade

Law (UNCITRAL)Law (UNCITRAL)– The World Customs OrganizationThe World Customs Organization

• Industry GroupsIndustry Groups

Introduction (2)Introduction (2)• Strategic Considerations:Strategic Considerations:– International Trade DevelopmentInternational Trade Development

– Enhancing Trade CompetitivenessEnhancing Trade Competitiveness• Connecting to Global Supply ChainsConnecting to Global Supply Chains

• UN/ECE/CEFACT UN/ECE/CEFACT Buy - Ship - Pay ModelBuy - Ship - Pay Model

– Importance of International Legal StandardsImportance of International Legal Standards

• Intersection of Electronic Commerce and SW Intersection of Electronic Commerce and SW Legal Frameworks at the National and Legal Frameworks at the National and International LevelsInternational Levels

Introduction (3)Introduction (3)

• The Complexities of the Legal Issues in The Complexities of the Legal Issues in Cross-Border Single Window OperationsCross-Border Single Window Operations

• Avoiding Dual ICT Legal RegimesAvoiding Dual ICT Legal Regimes

• Private Sector Legal ConcernsPrivate Sector Legal Concerns

UN/CEFACT RecommendationsUN/CEFACT Recommendations• Recommendation 33 - Recommendation 33 - Recommendation and Guidelines Recommendation and Guidelines

on Establishing a Single Window to Enhance the on Establishing a Single Window to Enhance the Efficient Exchange of Information between Trade and Efficient Exchange of Information between Trade and

GovernmentGovernment • Published by UN/ECE in 2005Published by UN/ECE in 2005

• UN/ECE/CEFACT Legal Group, began work, in UN/ECE/CEFACT Legal Group, began work, in cooperation with the International Trade and Business cooperation with the International Trade and Business Processes Group – International Trade (TBG15), on Processes Group – International Trade (TBG15), on Recommendation 35 in 2006Recommendation 35 in 2006

• Draft Recommendation 35 approved and has Draft Recommendation 35 approved and has completed the Public Review process and is awaiting completed the Public Review process and is awaiting final approval - expected in the next several monthsfinal approval - expected in the next several months

UN/CEFACT Recommendation 35UN/CEFACT Recommendation 351.1. Undertake a study (including e-Commerce legal benchmarking and Undertake a study (including e-Commerce legal benchmarking and

‘gap analysis’ studies) in order to determine an appropriate set of ‘gap analysis’ studies) in order to determine an appropriate set of measures that may need to be taken to address legal issues related to measures that may need to be taken to address legal issues related to national and cross-border exchange of trade data required for Single national and cross-border exchange of trade data required for Single Window operations (The International Trade Single Window Legal Window operations (The International Trade Single Window Legal Framework.)Framework.)

2.2. Use the UN/CEFACT checklist and its guidelines (Annexes A and B) to Use the UN/CEFACT checklist and its guidelines (Annexes A and B) to ensure that the most frequent legal issues related to national and ensure that the most frequent legal issues related to national and cross-border exchange of trade data are included in the framework.cross-border exchange of trade data are included in the framework.

3.3. Amend existing legislation, regulations, decrees, etc., if necessary, to Amend existing legislation, regulations, decrees, etc., if necessary, to address the identified legal issues and gaps.address the identified legal issues and gaps.

4.4. Utilize international standards, international legal instruments, and Utilize international standards, international legal instruments, and soft law instruments, where available, throughout the entire process soft law instruments, where available, throughout the entire process of creating a legally enabling environment for an International Trade of creating a legally enabling environment for an International Trade Single Window.Single Window.

UN/CEFACT Recommendation 35 (2)UN/CEFACT Recommendation 35 (2)

• Guidelines to the Recommendation Guidelines to the Recommendation on Establishing a Legal on Establishing a Legal Framework for the International Framework for the International Trade Single Window:Trade Single Window:– Annex A: Checklist of Legal Issues Annex A: Checklist of Legal Issues

for Single Window Operationsfor Single Window Operations– Annex B: Checklist GuidelinesAnnex B: Checklist Guidelines– Annex C: ToolkitAnnex C: Toolkit

Annex B: Checklist GuidelinesAnnex B: Checklist Guidelines

• A legal basis for implementing a Single A legal basis for implementing a Single Window facilityWindow facility– National Law and Regulations enabling the operation National Law and Regulations enabling the operation

of the Single Windowof the Single Window

– Utilize International Legal StandardsUtilize International Legal Standards

– Legal authorization for Cross-Border transactionsLegal authorization for Cross-Border transactions

– Functional EquivalenceFunctional Equivalence of paper and electronic of paper and electronic documentsdocuments

– Electronic Evidence used in enforcement and civil Electronic Evidence used in enforcement and civil actionsactions

– Cross-Border Jurisdiction in International Cross-Border Jurisdiction in International TransactionsTransactions

Annex B: Checklist Guidelines (2)Annex B: Checklist Guidelines (2)

• SW facility structure and organizationSW facility structure and organization– Possible SW StructuresPossible SW Structures• Government operated SW facilityGovernment operated SW facility• Joint Public-Private Partnerships (PPP)Joint Public-Private Partnerships (PPP)• Private Sector EntityPrivate Sector Entity

– Formal Legal AgreementsFormal Legal Agreements• Operating AgreementsOperating Agreements• Memoranda of UnderstandingMemoranda of Understanding• End User AgreementsEnd User Agreements• Service Level AgreementsService Level Agreements


• Data ProtectionData Protection– Information SecurityInformation Security

• Access to and sharing of DataAccess to and sharing of Data• Information Security Agreements (ISAs)Information Security Agreements (ISAs)• Risk Analysis and avoiding Data BreachesRisk Analysis and avoiding Data Breaches

– Privacy IssuesPrivacy Issues• Personally Identifiable Information (PII)Personally Identifiable Information (PII)• Privacy Impact Assessments (PIA)Privacy Impact Assessments (PIA)

– Confidential Trade Data ProtectionConfidential Trade Data Protection– Considerations for creating National Legislation Considerations for creating National Legislation

and/or Regulation for Data Protectionand/or Regulation for Data Protection


• Authority to access and share data between Authority to access and share data between government agenciesgovernment agencies– Which government agencies are permitted to Which government agencies are permitted to

access the SW and what information may be access the SW and what information may be shared by the SW with each governmental shared by the SW with each governmental agency?agency?

– Memoranda of Understanding between the SW Memoranda of Understanding between the SW operator (e.g., Customs) and those governmental operator (e.g., Customs) and those governmental agencies authorized by law to access SW data.agencies authorized by law to access SW data.

– Data Retention requirements.Data Retention requirements.


• Identification, Authentication and Identification, Authentication and AuthorizationAuthorization– Access Security Measures forAccess Security Measures for

• Government Agency EmployeesGovernment Agency Employees• End UsersEnd Users

– Emerging Identity Management Legal TrendsEmerging Identity Management Legal Trends– Electronic & Digital Signature Legal Issues Electronic & Digital Signature Legal Issues

((Technology NeutralityTechnology Neutrality))• Potential Barriers to TradePotential Barriers to Trade

• Data Quality IssuesData Quality Issues– Accuracy and Integrity of Data processed in the Accuracy and Integrity of Data processed in the

SWSW– Audit trails, logging and recording mechanismsAudit trails, logging and recording mechanisms


• Liability issues (obligations and Liability issues (obligations and responsibilities)responsibilities)– Inaccurate or incomplete dataInaccurate or incomplete data• Processing ErrorsProcessing Errors

• Submission ErrorsSubmission Errors

– Enforcement and SanctionsEnforcement and Sanctions– Data BreachesData Breaches– Monetary and other DamagesMonetary and other Damages• Within the national legal frameworkWithin the national legal framework

• Cross-border damages and enforcementCross-border damages and enforcement


• Arbitration and dispute resolutionArbitration and dispute resolution– Advantages of alternative dispute Advantages of alternative dispute

resolution (ADR) mechanismsresolution (ADR) mechanisms– Incorporating ADR provisions in bi-lateral Incorporating ADR provisions in bi-lateral

and multi-lateral agreementsand multi-lateral agreements

• Electronic documentsElectronic documents– Overcoming the barriers of “paper”Overcoming the barriers of “paper”– The principle of The principle of Functional EquivalenceFunctional Equivalence


• Electronic archivingElectronic archiving• Data Retention ProgramsData Retention Programs• Technology considerationsTechnology considerations

• Legal considerationsLegal considerations

• Use of archived Electronic Documents and Use of archived Electronic Documents and Messages in Administrative and Judicial Messages in Administrative and Judicial ProceedingsProceedings

• Cross-Border Legal ConsiderationsCross-Border Legal Considerations


• Intellectual property rights (IPR) and Intellectual property rights (IPR) and database ownershipdatabase ownership– Ownership and/or control of data Ownership and/or control of data

submitted to the SW?submitted to the SW?• Government agencies? Commercial parties Government agencies? Commercial parties

submitting data to the SW?submitting data to the SW?

– IPR Related to the SW “system”IPR Related to the SW “system”• Establishing ownership/licence rights in Establishing ownership/licence rights in

computer hardware, firmware and softwarecomputer hardware, firmware and software• Rights to upgrades and software integrationRights to upgrades and software integration• Warranties of non-infringement, defense costs Warranties of non-infringement, defense costs

and indemnification clausesand indemnification clauses


• CompetitionCompetition– Antitrust and Protectionist ConcernsAntitrust and Protectionist Concerns– Consideration of GATT ObligationsConsideration of GATT Obligations• Articles V, VIII, and XArticles V, VIII, and X

Annex C: ToolkitAnnex C: Toolkit

• Importance of International Legal Standards - ReduxImportance of International Legal Standards - Redux

• For example, International Legal Guidance Texts:For example, International Legal Guidance Texts:

– UN/ECE/CEFACT: Recommendation 35 (2009)UN/ECE/CEFACT: Recommendation 35 (2009)

– UNCITRAL:UNCITRAL:

• UN Electronic Communications Convention (2005)UN Electronic Communications Convention (2005)

• UNCITRAL Model Law on Electronic Commerce (1996)UNCITRAL Model Law on Electronic Commerce (1996)

• Promoting confidence in electronic commerce: legal issues on Promoting confidence in electronic commerce: legal issues on

international use of electronic authentication and signature international use of electronic authentication and signature

methods methods (2009)(2009)

– Others….Others….

Checklist of basic legal issues Checklist of basic legal issues 1)1) Law on electronic signaturesLaw on electronic signatures Is the system working on a PKI basis?Is the system working on a PKI basis? Is there a root CA + a network of CAs?Is there a root CA + a network of CAs?

2) Law on electronic commerce2) Law on electronic commerce

3) Law on e-government3) Law on e-government

4) Law on data protection4) Law on data protection

5) Do sectoral laws (e.g. sanitary laws) 5) Do sectoral laws (e.g. sanitary laws) envisage the use of sector and/or envisage the use of sector and/or country specific codescountry specific codes

6) Are there requirements of paper originals 6) Are there requirements of paper originals in law? in law?

How to tackle requirements How to tackle requirements of paper originals in law?of paper originals in law?

• National legal system determines the National legal system determines the procedure of elimination of form procedure of elimination of form requirementsrequirements

• The complex method is to identify all The complex method is to identify all relevant provisions containing form relevant provisions containing form requirements and amend themrequirements and amend them

• E-commerce laws are based on a E-commerce laws are based on a general general clauseclause making electronic records making electronic records functionally equivalent to paper functionally equivalent to paper documents documents

Single Window Legalities:Single Window Legalities:

The Adventure Continues!The Adventure Continues!

Questions?Questions?

Thank youThank you

Professor William J. Luddy, Jr.Professor William J. Luddy, [email protected]@mac.com

[email protected]@wcoomd.org

Mario Apostolov, Regional Adviser, Mario Apostolov, Regional Adviser, UNECE Trade DivisionUNECE Trade Division

[email protected]@unece.org