Draft UN treaty to ease global electronic commerce moves forward

The chief United Nations body overseeing international trade law policies has taken a step closer to a treaty that would create a unified legal regime for worldwide electronic commerce, removing barriers and lowering costs for companies using the Internet to conduct business.

The recommendation on a draft text adopted Friday at the conclusion of a week-long meeting by the UN Commission on International Trade Law's (UNCITRAL) Working Group on Electronic Commerce will be submitted to the Commission's next full session in June. The text focuses on areas such as legal electronic transactions, data exchanges and e-mail messages.

"This work will benefit world trade as it will enable and encourage the greater use of e-commerce," said the group's chairman, Jeffrey Chan of Singapore. He noted that more trade transactions are being conducted through electronic means, and the Internet in particular has grown to be a powerful tool for business.

"The problem is that, in international business, different countries have different legal rules for contracts," creating uncertainty when the same transaction is conducted across international borders, Mr. Chan added. Companies often must hire lawyers in different countries to advise them, adding to the cost of doing business.

The chairman said that with a treaty to create a uniform legal regime for such transactions, confidence in e-commerce would get a boost and costs could be cut. "With this, there can be an expansion of international trading transactions," he said.

Jonas Astrup, who attended the meeting for the International Chamber of Commerce, said his organization favoured the alternative of self-regulation by industry. The ICC is addressing the contractual questions of e-commerce by developing "e-Terms 2004," voluntary rules to help companies negotiate contracts electronically, Mr. Astrup added.

On the other hand, "the draft convention has very useful aspects, such as recognition of data messages, and is in synergy with our tools," such as contract guidance and model clauses, Mr. Astrup said. The International Chamber of Commerce set up its own task force which last year submitted comments on the scope and purposes of the draft convention.

UNCITRAL works to modernize and harmonize the rules of international business. As trade means faster growth, higher living standards, and new opportunities through commerce, the Commission also seeks to increase these opportunities worldwide by formulating modern, fair, and harmonized rules on commercial transactions.