UNCITRAL ADOPTS MODEL LAW ON ELECTRONIC COMMUNICATION IN TRADE

Press Release
L/TR/229

UNCITRAL ADOPTS MODEL LAW ON ELECTRONIC COMMUNICATION IN TRADE

VIENNA, 2 July (UN Information Service) -- The United Nations Commission on International Trade Law (UNCITRAL) has broken new ground in formulating model provisions to facilitate the use of non-paper-based communications for a wide range of international commercial transactions. The new Model Law on Electronic Data Interchange, adopted at its recently concluded session in New York, provides definitions, principles and proposed rules to help avoid discrimination against commercial messages that are communicated electronically.

The 36-member Commission devoted several years to drafting and revising a set of basic principles that would be acceptable to the world's major legal systems and which could guide States in enacting suitable laws in this new area. A key provision of the Model Law states that "information shall not be denied legal effect, validity or enforceability solely on the grounds that it is in the form of a data message". It also helps resolve the extent to which electronic messages can meet a legal requirement that information be provided in "writing".

The speed and low cost of such communication methods as facsimile, e-mail and Internet has led to a vast expansion in their use in international trade transactions. Contracts and correspondence that used to take weeks to reach their destinations by regular mail can now be exchanged within minutes, enabling parties in different countries to complete a trade deal without delay.

Where trouble arises, however, is that the laws of many countries governing the legality of various trade transactions are incompatible with electronic communications. For example, digitalized signatures might not be considered valid, or an electronically communicated document might not be considered legally effective, unless a paper original is kept on file.

Rather than attempt to address all thorny legal issues associated with electronic data interchange, the Model Law sets out basic provisions on electronic commerce in general and gives further guidance only with regard to the carriage of goods.

- 2 - Press Release L/TR/229 3 July 1996

While previous United Nations trade law work was aimed at removing or reducing legal obstacles to the flow of international trade, the action on electronic data interchange provided an opportunity to prevent disharmony in an area in which no legislation existed. The text just adopted is widely viewed as only an initial modest attempt by the world community to keep pace with the fast-changing world of modern communication technology.

Future discussions are expected to focus on areas such as the validity of digital signatures and on the role and liability of the various networks and operators that act as intermediaries. Underlying UNCITRAL's work in the field of electronic data interchange is the growing need to allow the replacement of traditional paper-based activities by countering the perception that electronic means of communication or storage are unsafe and thus cannot be accorded proper legal value.

The Commission was established by the General Assembly in 1966 to address a daunting array of legal obstacles to trade. Its members represent the various geographical regions and principal economic and legal systems of the world. Among its past accomplishments has been the preparation of uniform rules in such fields as the international sale of goods, international payments, international commercial arbitration, and international shipping law. The Commission's secretariat is based in Vienna.

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