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					         Proposal to the 18th AFACT Meeting:

      AFACT Online Trust Mark Program

                        2000. 8. 23.

  Korea Institute for Electronic Commerce

1) Background of Proposal
    A. Before the Internet was developed, the international trade had been mostly made
       through L/C (Letter of Credit); and the trade through L/C had been made under
       secure guarantee of credit between the suppliers and buyers.

    B. However, as the participation of enterprises and individuals in the international
       trade increased, the matter of credit and trust emerged as an important concern.

    C. Online Trust Mark Programs were designed to facilitate transactions in online
       market by addressing the issues of credit and trust in electronic commerce and
       are currently run by several countries.
       Ex) BBB OnLine and Truste in the United States, Online Mark and Privacy
       Mark of Japan, TrustUK in England, and eTrust in Korea.

    D. Nonetheless, because these online marks are concerned with e-commerce in the
       domestic markets, they have the limit of not effectively dealing with
       e-commerce in the international arena.

    E. AFACT Online Mark (tentatively called AFACT eTrust) shall contribute to
       overcoming the limit of those online mark programs only dealing with domestic
       e-commerce and promoting secure e-commerce environment by improving
       credit and trust in the international e-commerce in the Asian Pacific Region.

2) Purpose of the Program

The purposes of the AFACT Online Mark Program are as follow:
   A. Guarantee of buyers’ trust on suppliers in the international e-commerce market
   B. Protection of enterprises’ and individuals’ information in the international
    C. Guarantee of security and convenience in the international e-commerce
    D. Improvement of AFACT organization image
3) Method of Program Operation

   A. Procedures for Driving the Program
    1. Designation of AFACT online mark endowment organ for each member
   2. Set-up of Steering Committee
   3. Establishment of certification criteria
   4. Build-up of Database system to manage certified enterprises
   5. Announcement of the program
   6. Reception of application for online mark and evaluation
   7. Registration of the certified enterprises on the database
   8. Endowment of AFACT online mark

   B. Details of the Program

   1. Designation of AFACT online mark endowment organ for each member
      a. Designation Criteria
          One organ per each member country shall be designated (to prevent the
           decrease of representativeness due to too many certification organs)
          The endowment organ shall be designated by the competent authority of
            the member country.
          The endowment organ should be trusted by consumers.
     b. Roles of Online Mark Endowment Organ
          Endowment of AFACT online mark in each country (reception of
         application, evaluation, mark endowment, post-management)
          Registration of certification related information about mark endowment
         organs on the database.
          Management of the certified enterprises

   2. Set-up of Steering Committee
     a. Composure of Committee members
    a program representative designated by each member country
      The members should be specialists who fully understand the purpose of
        the program.
b. Roles of the Steering Committee
       The committee is in charge of overall operation of the AFACT online
         mark program.
       The committee decides the certification field that the AFACT online
         mark program is applied (B2B, B2C etc.).
     The committee decides the design of AFACT online mark (example:
       AFACT eTrust)
     The committee decides the examination fee for certification
      and the annual fee for mark usage.
     The committee manages and operates certification guideline establishment
       team and mark endowment organ management team.
     The committee checks, coordinates, and audits program operation in each
       member country.
c. Certification Guideline Establishment Team
   Team members: designated by the Steering Committee
     Role: Preparation of certification guideline for the endowment of AFACT
      online mark
     Principles to abide by in preparing the certification guideline:
   - Overall certification evaluation framework compatible with the purpose of
      the program
   - Guarantee of flexibility in evaluation criteria so that the differences of
      situation in each country can be reflected
d. Mark Endowment Organs Management Team
  Team members: designated by the steering committee
  Roles:
   - Build-up of database system for the management of mark endowment
   - Management of data on the status of mark endowment organ in each
      member country
   - Check the mark endowment organs
    - Check the appropriateness of certification criteria set by each member
       country’s endowment organ
    3. Reception of Application for Online Mark and Evaluation
       a. Reception and evaluation organ: designated AFACT online mark endowment
       b. Method of reception and evaluation: decided by the designated endowment

4) Introduction of Korean eTrust Mark Program

 A. Overview

   1. Operation organ: Korea Institute for Electronic Commerce
   2. Purposes of the program
           a. Consumer protection
           b. Privacy
           c. Guarantee of e-commerce safety and convenience
           d. Improvement of consumers’ trust in businesses
   3. History of the Program
    - 1999. 3.     start of the program (in the area of B2C shopping mall and
                        shopping site)
    - 1999. 6.     1 endowment: 26 enterprises were certified
    - 1999. 12. 2nd endowment: 19 enterprises were certified
    - 2000. 3.     expanded certification areas (addition of trade, B2B, service,
                    banking, and auction)
    - 2000. 6.    3 endowment: 44 enterprises were certified
    - 2000. 8.    modified certification method
                       (once per six months  any time upon application)
   4. Target of Certification
    * all entities running any kind of electronic business through Web sites

    B. POS (Program Operating System)

     1. eTrust Certification Committee
          a. composed of committee for setting evaluation criteria and
         committee on certification evaluation
     b. committee for setting evaluation criteria
       composed of about 30 entrepreneurs, scholars, and relevant specialists
       performs such duties as setting, modifying, and improving evaluation
     c. committee on certification evaluation
        composed of about 30 scholars and relevant specialists working in the
          field of certification evaluation
        performs the duty of evaluating the entities applied for eTrust mark
        performs the duty of deciding certification for and cancellation of the use
          of eTrust mark

  2. Qualification for Applying for eTrust mark
     a. entities that completed business registration
     b. entities that operated electronic business longer than three months
     c. entities that are not opposed to the objectives of the program

  3. Evaluation Items for eTrust Mark Certification
     a. system capacity and stability
     b. appropriateness of the information on goods
     c. convenience in obtaining information on goods
     d. convenience in ordering goods
     e. convenience and safety of payment method
     f. display of statement on privacy policy
     g. consumer-oriented goods delivery and convenience of goods refund or
    h. quality of post-management service

  4. Criteria for Endowment of eTrust mark
      a. must meet the qualification criteria for application
       b. must satisfy the required conditions among the evaluation items
         display of statement on privacy policy
         provision of essential information about goods
         allowance of order modification

5. Procedure for Endowment of eTrust Mark
                          eTrust Self-evaluation program
                           Application for eTrust Mark
                            Review of Application
         Evaluation of Applied Entities on the Basis of Evaluation Criteria
                           Endowment of eTrust Mark

C. KIEC’s Proposal to AFACT
 1. In case it is not feasible or difficult to develop a pan-AFACT online mark
     program, KIEC can transfer all the know-how accumulated through the
     operation of the Korean eTrust mark program, including the free use of the
     registered eTrust logo itself, to whichever member country wants to create an
     online mark program.
   2. Reciprocal certification of eTrust mark among the member countries may be
        considered, if desirable and feasible.

5). Expected Benefits
   A. Benefit for the AFACT
     1. Promotion of E-commerce in the Asian Pacific region
     2. Improvement of AFACT Image
     3. Provision of exemplary business guideline

  B. Benefits for the Enterprises in the Asian Pacific Region
     1. Reduction of distrust in the international e-commerce
   2. Increase of enterprises’ possibility to export to foreign markets
   3. Improvement of enterprises’ e-business model

C. Benefits for Purchasers
     1. Decrease of uncertainty and distrust caused by purchasing in the
        international market
   2. Increase of safety in purchasing goods
   3. Opportunity to compare various goods and to select goods rationally