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					                     Regional Conference on

                     Introduction to
               Draft Recommendation 35:
         Establishing a Legal Framework for an
          International Trade Single Window
                 Professor William J. Luddy, Jr.
                   Special Legal Counsel - WCO
                             June 2009

Presentation made by Mario Apostolov, Regional Adviser UNECE Trade

Please note that the views and analysis that
  are provided here or discussed during
  our session are not necessarily those of
  any organization with which Bill Luddy
  may be working. They represent his
  views on the legal topics in this
• International recognition of the importance of
  the legal infrastructure of the Single Window
  for International Trade.
• Regional Developments: ASEAN, APEC, SEE,
  The European Commission, and others
• Leading International Organizations
  – UN Centre for Trade Facilitation and Electronic
    Business (UN/CEFACT)
  – United Nations Commission on International Trade
    Law (UNCITRAL)
  – The World Customs Organization
• Industry Groups
               Introduction (2)
• Strategic Considerations:
  – International Trade Development
  – Enhancing Trade Competitiveness
     • Connecting to Global Supply Chains
     • UN/ECE/CEFACT Buy - Ship - Pay Model
  – Importance of International Legal Standards
• Intersection of Electronic Commerce and SW
  Legal Frameworks at the National and
  International Levels
           Introduction (3)
• The Complexities of the Legal Issues in
  Cross-Border Single Window Operations
• Avoiding Dual ICT Legal Regimes
• Private Sector Legal Concerns
  UN/CEFACT Recommendations
• Recommendation 33 - Recommendation and Guidelines
  on Establishing a Single Window to Enhance the
  Efficient Exchange of Information between Trade and
      • Published by UN/ECE in 2005

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

• Draft Recommendation 35 approved and has
  completed the Public Review process and is awaiting
  final approval - expected in the next several months
     UN/CEFACT Recommendation 35
1.    Undertake a study (including e-Commerce legal benchmarking and
      ‘gap analysis’ studies) in order to determine an appropriate set of
      measures that may need to be taken to address legal issues related to
      national and cross-border exchange of trade data required for Single
      Window operations (The International Trade Single Window Legal
2.    Use the UN/CEFACT checklist and its guidelines (Annexes A and B) to
      ensure that the most frequent legal issues related to national and
      cross-border exchange of trade data are included in the framework.
3.    Amend existing legislation, regulations, decrees, etc., if necessary, to
      address the identified legal issues and gaps.
4.    Utilize international standards, international legal instruments, and
      soft law instruments, where available, throughout the entire process
      of creating a legally enabling environment for an International Trade
      Single Window.
UN/CEFACT Recommendation 35 (2)

• Guidelines to the Recommendation
  on Establishing a Legal
  Framework for the International
  Trade Single Window:
  – Annex A: Checklist of Legal Issues
    for Single Window Operations
  – Annex B: Checklist Guidelines
  – Annex C: Toolkit
         Annex B: Checklist Guidelines
•       A legal basis for implementing a Single
        Window facility
    –     National Law and Regulations enabling the operation
          of the Single Window
    –     Utilize International Legal Standards
    –     Legal authorization for Cross-Border transactions
    –     Functional Equivalence of paper and electronic
    –     Electronic Evidence used in enforcement and civil
    –     Cross-Border Jurisdiction in International
    Annex B: Checklist Guidelines (2)
•   SW facility structure and organization
    –   Possible SW Structures
        •   Government operated SW facility
        •   Joint Public-Private Partnerships (PPP)
        •   Private Sector Entity
    –   Formal Legal Agreements
        •   Operating Agreements
        •   Memoranda of Understanding
        •   End User Agreements
        •   Service Level Agreements
    Annex B: Checklist Guidelines (3)
•   Data Protection
    –   Information Security
        •   Access to and sharing of Data
        •   Information Security Agreements (ISAs)
        •   Risk Analysis and avoiding Data Breaches
    –   Privacy Issues
        •   Personally Identifiable Information (PII)
        •   Privacy Impact Assessments (PIA)
    –   Confidential Trade Data Protection
    –   Considerations for creating National Legislation
        and/or Regulation for Data Protection
    Annex B: Checklist Guidelines (4)
•   Authority to access and share data between
    government agencies
    –   Which government agencies are permitted to
        access the SW and what information may be
        shared by the SW with each governmental
    –   Memoranda of Understanding between the SW
        operator (e.g., Customs) and those governmental
        agencies authorized by law to access SW data.
    –   Data Retention requirements.
    Annex B: Checklist Guidelines (5)
•   Identification, Authentication and
    –   Access Security Measures for
        •   Government Agency Employees
        •   End Users
    –   Emerging Identity Management Legal Trends
    –   Electronic & Digital Signature Legal Issues
        (Technology Neutrality)
        •   Potential Barriers to Trade
•   Data Quality Issues
    –   Accuracy and Integrity of Data processed in the
    –   Audit trails, logging and recording mechanisms
    Annex B: Checklist Guidelines (6)
•   Liability issues (obligations and
    –   Inaccurate or incomplete data
        •   Processing Errors
        •   Submission Errors
    –   Enforcement and Sanctions
    –   Data Breaches
    –   Monetary and other Damages
        •   Within the national legal framework
        •   Cross-border damages and enforcement
    Annex B: Checklist Guidelines (7)
•   Arbitration and dispute resolution
    –   Advantages of alternative dispute
        resolution (ADR) mechanisms
    –   Incorporating ADR provisions in bi-lateral
        and multi-lateral agreements
•   Electronic documents
    –   Overcoming the barriers of “paper”
    –   The principle of Functional Equivalence
    Annex B: Checklist Guidelines (8)
•       Electronic archiving
    •     Data Retention Programs
         •   Technology considerations
         •   Legal considerations
    •     Use of archived Electronic Documents and
          Messages in Administrative and Judicial
    •     Cross-Border Legal Considerations
    Annex B: Checklist Guidelines (9)
•   Intellectual property rights (IPR) and
    database ownership
    –   Ownership and/or control of data
        submitted to the SW?
        •   Government agencies? Commercial parties
            submitting data to the SW?
    –   IPR Related to the SW “system”
        •   Establishing ownership/licence rights in
            computer hardware, firmware and software
        •   Rights to upgrades and software integration
        •   Warranties of non-infringement, defense costs
            and indemnification clauses
    Annex B: Checklist Guidelines (10)
•    Competition
    –   Antitrust and Protectionist Concerns
    –   Consideration of GATT Obligations
        •   Articles V, VIII, and X
                   Annex C: Toolkit
•   Importance of International Legal Standards - Redux
•   For example, International Legal Guidance Texts:
    –   UN/ECE/CEFACT: Recommendation 35 (2009)
    –   UNCITRAL:
        •   UN Electronic Communications Convention (2005)
        •   UNCITRAL Model Law on Electronic Commerce (1996)
        •   Promoting confidence in electronic commerce: legal issues on
            international use of electronic authentication and signature
            methods (2009)
    –   Others….
Checklist of basic legal issues
1) Law on electronic signatures
 Is the system working on a PKI basis?
 Is there a root CA + a network of CAs?
2) Law on electronic commerce
3) Law on e-government
4) Law on data protection
5) Do sectoral laws (e.g. sanitary laws)
    envisage the use of sector and/or
    country specific codes
6) Are there requirements of paper originals
    in law?
How to tackle requirements
 of paper originals in law?
• National legal system determines the
  procedure of elimination of form
• The complex method is to identify all
  relevant provisions containing form
  requirements and amend them
• E-commerce laws are based on a general
  clause making electronic records
  functionally equivalent to paper
Single Window Legalities:
   The Adventure Continues!

Thank you
       Professor William J. Luddy, Jr.

    Mario Apostolov, Regional Adviser,
              UNECE Trade Division

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