UNITED NATIONS COMMISION ON INTERNATIONAL TRADE LAW (UNCITRAL) Raising confidence in E-commerce: the legal framework UNCITRAL Secretariat Vienna, Austria E-Commerce and Private Law • E-Commerce creates new issues: – Classification difficulties: the virtual goods – New contract types: web hosting, web server etc. • … but the essence of business transactions remains the same. • Conventional law has not become obsolete... – “On line” contracts are not different from “off line” – Medium of a transaction is generally irrelevant for the law. • …and nevertheless, it requires some adaptation. Sources of Legal Obstacles to e-Commerce • Legal concepts based on the existence of a tangible medium: “instrument”, “document”, “original”, “signature”, • Legal concepts based on geographic location: “delivery”, “receipt”, “dispatch”, “surrender” International Harmonization Efforts: the UNCITRAL Model Laws • Importance of international harmonization and reasons for model laws • UNCITRAL Model Law on Electronic Commerce (1996) • UNCITRAL Model Law on Electronic Signatures (2001) (available in all UN official languages at http://www.uncitral.org/english/texts/electcom/ecommercei ndex.htm. List of enacting States: http://www.uncitral.org/english/status/status-e.htm) Influence of the UNCITRAL Model Law on Electronic Commerce – Adopted by UNCITRAL in 1996 and already transformed into law in several countries: Australia (1999), Colombia * (1999), Bahrain (2002), Dominican Republic * (2002), Ecuador * (2002), France (2000), India* (2000), Ireland (2000), Jordan (2000), Mauritius (2000), Mexico (2000), New Zealand (2000), Pakistan (2000), Panama * (2001), Philippines (2000), Republic of Korea (1999), Singapore (1998), Slovenia (2000), South Africa* (2002), Thailand (2003), and Venezuela (2001). * Except for provisions on electronic signatures Influence of the UNCITRAL Model Law on Electronic Commerce • Uniform legislation influenced by the Model Law and the principles on which it is based has been prepared in the United States (Uniform Electronic Transactions Act 1999) and enacted by the States of Alabama (2001), Arizona (2000), Arkansas (2001), California (1999), Colorado (2002), Connecticut (2002), Delaware (2000), Florida (2000), Hawaii (2000), Idaho (2000), Indiana (2000), Iowa (2000), Kansas (2000), Kentucky (2000), Louisiana (2001), Maine (2000), Maryland (2000), Michigan (2000), Minnesota (2000), Mississippi (2001), Missouri (2003), Montana (2001), Nebraska (2000), Nevada (2001), New Hampshire (2001), New Jersey (2000), New Mexico (2001), North Carolina (2000), North Dakota (2001), Ohio (2000), Oklahoma (2000), Oregon (2001), Pennsylvania (2000), Rhode Island (2000), South Dakota (2000), Tennessee (2001), Texas (2001), Utah (2000), Vermont (2003), Virginia (2000), West Virginia (2001), Wisconsin (2004), Wyoming (2001) and the District of Columbia (2001). The State of Illinois had already enacted the Model Law in 1998. Influence of the UNCITRAL Model Law on Electronic Commerce • Uniform legislation influenced by the Model Law and the principles on which it is based has also been prepared in Canada (Uniform Electronic Commerce Act 1999) and enacted in nearly all Provinces and Territories, including British Columbia (2001), Manitoba (2000), New Brunswick (2001), Newfoundland and Labrador (2001), Nova Scotia (2000), Ontario (2001), Prince Edward Island (2001), Saskatchewan (2000), and Yukon (2000). Legislation influenced by the Model Law and the principles on which it is based has also been adopted in the Province of Quebec (2001). Influence of the UNCITRAL Model Law on Electronic Commerce • Also enacted in various non-sovereign jurisdictions: – Bailiwicks of Guernsey (2000), and Jersey (2000), and the Isle of Man (2000) (UK Crown Dependencies) – Bermuda (1999), Cayman Islands (2000), and the Turks and Caicos Islands (2000) (UK overseas territories) – Hong Kong Special Administrative Region of China (2000) State of Legislation in Other Countries • European Union: a special case – Directive on Electronic Signatures • Implemented in Austria, Denmark, Germany, Ireland, Italy, Spain, United Kingdom – Directive on Electronic Commerce • Implemented in Austria, Denmark, Germany, Ireland, Italy, Portugal, Spain, United Kingdom State of Legislation in Other Countries • EU member States with their own laws on electronic commerce – France and Ireland (both UNCITRAL), Italy (in some respects) • Eastern Europe – Laws on electronic commerce • Romania, Slovenia (both UNCITRAL) – Laws on electronic signatures • Estonia, Lithuania, Poland, Russian Federation E-Commerce in the UNCITRAL Model Law • Objectives of the Model Law: – To facilitate rather than regulate electronic commerce – To adapt existing legal requirements – To provide basic legal validity and raise legal certainty Basic Principles of the Model Law • Functional equivalence – Analyze purposes and functions of paperbased requirements (“writing”, “record”, “signature”, “original”) – Consider criteria necessary to replicate those functions and give electronic data the same level of recognition as information on paper Basic Principles of the Model Law • Media and technology neutrality – Equal treatment of paper-based and electronic transactions – Equal treatment of different techniques (EDI, email, Internet, telegram, telex, fax) Basic Principles of the Model Law • Party autonomy – Primacy of party agreement on whether and how to use e-commerce techniques – Parties free to choose security level appropriate for their transactions Core Provisions of the UNCITRAL Model Law Article 5 (Legal Recognition) Article 6 (Writing) Article 7 (Signature) Article 8 (Original) Article 9 (Evidence) Core Provisions of the UNCITRAL Model Law: Article 5 and 5 bis Information shall not be denied legal effect, validity or enforceability solely because: – it is in the form of a data message or – It is incorporated by reference Core Provisions of the UNCITRAL Model Law: Article 6 (Writing) Where the law requires information to be in writing, that requirement is met by a data message if the information contained therein is accessible so as to be usable for subsequent reference. Core Provisions of the UNCITRAL Model Law: Article 7 (Signature) Legal requirement is met in relation to a data message if: • a method is used to identify the signatory and to indicate his approval of the information contained in the data message; and • that method is as reliable as was appropriate for the purpose for which the data message was generated or communicated. Core Provisions of the UNCITRAL Model Law: Article 8 (Original) Legal requirement is met by a data message if: • there exists a reliable assurance as to the integrity of the information from the time when it was first generated in its final form, as a data message or otherwise; and • information is capable of being displayed to the person to whom it is to be presented. Core Provisions of the UNCITRAL Model Law: Article 9 (Evidence) In any legal proceedings, nothing in the rules of evidence shall apply so as to deny the admissibility of a data message in evidence solely because it is a data message. Other Provisions of the Model Law Article 11 (Use of data messages in contract formation) Article 12 (Non-repudiation) Article 13 (Attribution of data messages) Article 14 (Acknowledgement of receipt) Article 15 (Time and place of dispatch and receipt) Articles 16 and 17 (Electronic commerce and carriage of goods) Article 15 (Time and place of dispatch and receipt) A data message is deemed to be sent when it enters an information system outside the control of the originator. A data message is deemed to be received: a) If the addressee has designated an information system to receive the message, when the message enters the designated system; or b) If the message is sent to an information system other than the designated system, when the addressee retrieves the message. Default Rules in the UNCITRAL Model Law: Article 15 If the addressee has not designated an information system, the message is deemed to be received when it enters an information system of the addressee. Data messages are deemed to be sent at the place where the originator has its place of business and received at the place where the addressee has its place of business. UNITED NATIONS COMMISION ON INTERNATIONAL TRADE LAW (UNCITRAL) For more information on the work of UNCITRAL in the are of electronic commerce, or on other topics, please visit our web site http://www.uncitral.org/ Thank you for your attention!