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

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

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

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

5
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

6
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... .

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

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

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

10
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.

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

12
Main ADR Forms and Processes
Corporate
Complaint
Services
Assisted
Negotiation Mediation Arbitration Litigation
Facilitation
Conciliation
On a Sliding Scale:
Automated, or not
More or less active
guidance by the neutral
Voluntary or mandatory
participation
No obligation on the
parties to agree, before
entering ADR, that the
outcome will be binding
Voluntary or mandatory
submission
Automated or not
Final and 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.

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

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

15
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).

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

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

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

19
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.