LEGAL COMMITTEE TOLD OF INITIATIVES ON GLOBAL TRADE RULES

Fifty-eighth General Assembly

Sixth Committee

2^nd & 3^rd Meetings (AM & PM)

LEGAL COMMITTEE TOLD OF INITIATIVES ON GLOBAL TRADE RULES

UNCITRAL Chairman Reviews Work on Standards for Infrastructure

Projects, Sustainable Development, Insolvency Law and in Other Areas

The Sixth Committee (Legal), at two meetings today, concluded its consideration of the report of the United Nations Commission on International Trade Law (UNCITRAL) on the proceedings of its thirty-sixth session, held in Vienna from 30 June-11 July.

Also, the Committee today established a working group on terrorism and heard the introduction of drafts requesting consultative status in the General Assembly for four organizations.

Introducing the UNCITRAL report, the session Chairman, Tore Wiwen-Nilsson (Sweden), touched on the Commission’s work in the areas of arbitration, electronic commerce, transport and security, and the role of those issues in cross-border commercial transactions.

He then referred to the model legislative provisions on privately financed infrastructure projects which had been adopted at the session.  He said sustainable development would not be possible without private investment in public infrastructure.  It was vital in the areas of water, transport, energy and pollution management.  Investment would come only in an enabling environment.  A legislative framework promoting private participation was indispensable.

Further, he said the draft legislative guide on insolvency law that would be completed and adopted in 2004 would also encourage economic development and investment.  It would also preserve employment and foster entrepreneurship.  The Commission was working with the World Bank, the International Monetary Fund, the International Bar Association and many others on developing international standards in that field.

Later in his closing remarks, he noted that the new Commission membership of 60 instead of the previous 36 would take effect at the Commission’s next regular session in June.  He would make himself available on Tuesday and Wednesday to brief delegations on the issues before the Commission.

In his remarks on the Commission’s report, the United Nations Legal Counsel Hans Corell talked of the Secretary-General’s proposal to strengthen the Commission’s secretariat based on repeated requests of both the Commission and the Assembly.  He said failure to address pressing needs would be unfortunate and difficult to explain, in view of the modest sum of funds involved and the fact that resources for UNCITRAL could be covered by the existing level of resources in the Office of Legal Affairs.

In closing remarks, he called on delegations to lobby the Fifth Committee (Administrative and Budgetary) to get approval for restructuring the Commission’s secretariat.  He also encouraged delegates to contact their governments to gain support for the Commission’s work.

Speaking on the UNCITRAL report this morning were the representatives Sweden (on behalf of the Nordic countries), Belarus, Singapore, Uganda, Venezuela, India, Austria, Philippines, China, United States, Cyprus, Australia, Japan, Russian Federation and United Kingdom.  Speaking this afternoon were the representatives of Nigeria, Kenya, France, Mexico, Morocco, Algeria, Italy, Spain, Guatemala, Thailand, Republic of Korea and Democratic Republic of the Congo.

On the other matters, the working group established today was to continue the work of the Ad Hoc Committee set up by the General Assembly to elaborate a draft comprehensive convention on international terrorism and a draft international convention on the suppression of nuclear terrorism.  Rohan Perera (Sri Lanka), Chairman of the Ad Hoc Committee, was elected to head the working group.

Also, the four drafts requesting observer status in the General Assembly were introduced as follows:  Sweden’s representative, on behalf of the International Institute for Democracy and Electoral Assistance (IDEA); the representative of Kazakhstan on behalf of the Eurasian Economic Community; Georgia’s representative for the GUUAM group (Azerbaijan, Georgia, Moldova and Ukraine); and Uganda’s representative for the East African Community.

The Committee will meet again in plenary at 10:00 a.m. on Thursday, 9 October, when it will begin considering the report of the Special Committee on the Charter.  It is also expected to act on the resolutions containing requests for observer status in the General Assembly.

Background

The Sixth Committee (Legal) met today -- with morning and afternoon sessions -- to consider the work of the United Nations Commission on International Trade Law (UNCITRAL).  It was also expected to consider the establishment of a Working Group on terrorism and to hear the introduction of draft resolutions on requests for observer status in the General Assembly.

Commission Report

The report of the United Nations Commission on International Trade Law (UNCITRAL) (document A/58/17) was before the Committee for its consideration of the Commission.  It was established by the General Assembly in 1966 to unify international trade law and encourage the globalization of international trade and the free flow of goods.  The report covers proceedings of the Commission’s thirty-sixth session (Vienna, 30 June to 11 July), which was attended also by observer States and observers of the World Bank and International Monetary Fund, intergovernmental organizations such as the International Institute for the Unification of Private Law (UNIDROIT), and non-governmental organizations (NGOs) such as the International Bar Association.

During its session, the Commission considered the work of its six Working Groups: Group I on procurement; Group II on arbitration; Group III on transport law; Group IV on electronic commerce; Group V on insolvency law; and Group VI on security interests.

According to the report, the Commission considered and adopted the 51 draft model legislative provisions on privately financed infrastructure projects completed by its Working Group I.  The provisions are contained in five chapters, the first of which cover the preamble, definitions, authority to enter into concession agreements, and eligible infrastructure sectors.  Chapter II concerns provisions on the selection of the concessionaire, including pre-selection of bidders, procedure for requesting proposals, negotiation of concession contracts without competitive procedures, unsolicited proposals and miscellaneous provisions on confidentiality and procedures on award and review.  Chapter II also contains provisions on the construction and operation of infrastructure related to the concession contract content, and Chapter III on construction and operation related to contract conduct. 

Further, Chapter IV provisions concern contract duration and extension, termination and post-expiry arrangements.  Finally, Chapter V contains provisions on the settlement of disputes.  The Commission recommended that States give due consideration to the UNCITRAL Model Legislative Provisions and the UNCITRAL legislative Guide when revising or adopting relevant legislation on public infrastructure.

The Commission also took up a draft legislative guide on insolvency law as prepared by its Working Group V.  The guide was given preliminary approval and Working Group V was asked to further develop and refine it for adoption at the Commission’s next session.  In its consideration, the Commission noted the collaboration between Working Groups V and VI on the question of Security Interests, stressing the need for their working together also on treatment of secured creditors and security interests in insolvency.

The guide consists of two parts.  The first concerns the structural design and key objectives of an insolvency regime.  Its chapters deal with the introduction of insolvency procedures and types of insolvency proceedings.  Part two concerns the core provisions of an insolvency regime.  Those chapters deal with the application and commencement of the regime, treatment of assets, participants and institutions, reorganization and management of proceedings.  On approving the guide in principle, the Commission requested the secretariat to make the guide available to all relevant parties for comment.  It also recommended cooperation with the World Bank to identify key principles in common between the guide and the Bank’s own guidelines on insolvency and creditor rights, and to align those texts. 

On the matter of arbitration, the Commission noted the progress made by its Working Group II on interim measures of protection.  The Commission was also informed that an expert meeting held with the Organization for Economic Cooperation and Development (OECD) had found arbitration to be an appropriate method for resolving intra-corporate disputes, in particular when parties from different States were involved.  Since “arbitrability” was central to that work, it was decided that the relatively low priority given to the matter could be revisited in the working group’s future work.

In considering transport law, the Commission noted that Working Group III had completed its first reading of the draft instrument on transport law and had reached a difficult phase of work with many controversial issues remaining to be discussed.  Since it was possible that a door-to-door instrument might be achieved by compromise based on uniform liability, choice of forum and negotiated contracts, the Working Group was invited to hold intersessional consultations as it continued to hold full-scale meetings.

On electronic commerce by Working Group IV, the Commission noted the secretariat’s survey of possible legal barriers to the development of electronic commerce in international trade-related instruments.  It called for an expansion of the survey to include instruments not yet being considered.  It also called on organizations to help develop modalities for carrying out the studies and on States to invite the participation of experts in the fields covered by the instruments.  The Commission also considered the Group’s work on a draft convention dealing with electronic contracting, and affirmed the instrument would facilitate cross-border commercial transactions.  The question of intellectual property rights in context of the convention was also considered and the secretariat was requested to hold consultations on the matter with organizations including the World Intellectual Property Organization (WIPO).

The Commission considered work done by Working Group VI, charged with developing a regime for security interests in commercially associated goods.  Cooperation between this Group and Group V on insolvency was noted.  Key points in the Group’s work concerned registration systems of security rights in movable property and insolvency as related to secured transactions.  On the continuing elaboration of a draft legislative guide on secured transactions, the Group was asked to consider whether the guide should cover certain intangibles, such as trade receivables and letters of credit, in addition to the goods now within the scope.

Further, the Commission heard a report on its joint project with the International Bar Association to monitor legislative implementation of the “New York Convention”, known formally as the Convention on the Recognition and Enforcement of Foreign Arbitral Awards.  As at 1 April, 133 States were parties to the convention and 66 replies to a questionnaire had been received.  Since the Convention impacted on international trade, the secretariat was asked to intensify efforts to make progress by re-circulating the questionnaire, requesting updates on new developments from States and obtaining information from other sources such as intergovernmental organizations or NGOs.

The Commission considered two areas for future work.  The first was in regard to public procurement, where the issues and practices that had arisen since adoption of the UNCITRAL Model Procurement Law were thought to have justified adjustment of the text.  The secretariat was asked to prepare detailed studies on the issues with an eye toward convening a working group in 2004.  The second was in regard to the commercial fraud enabled by Internet activity.  Since such commercial fraud was beyond the reach of national laws and was difficult to define because of its civil, regulatory and criminal law dimensions, the Commission decided to coordinate with other bodies to highlight awareness and to possibly organize a colloquium on the matter.   

The Commission also heard reports on the status of its ongoing work.  In the case of the system for collecting and disseminating case law on UNCITRAL texts (CLOUT) through preparation of case abstracts, the compilation of decision texts and the preparation of tools such as thesauri and indices, it was reported that 41 issues had been prepared dealing with 476 cases.  An analytical digest of court and arbitral decisions identifying trends in interpretation of the United Nations Sales Convention had been finalized, as had initial drafts of the digest on Model Arbitration Law.  Training and technical assistance projects carried out with the assistance of UNCITRAL trust funds were reported, and the status of UNCITRAL legal texts considered.

Further, the Commission noted General Assembly resolutions on its Model Law on International Commercial Conciliation, on enlargement of its membership from 36 to 60 and on strengthening of its secretariat.  It considered ways to enhance coordination with the International Institute for the Unification of Private Law (UNIDROIT) and with regional economic commissions.  Finally, it considered other business, including activities related to its Web site.

The Commission decided to hold its thirty-seventh session in New York from 14 June to 2 July 2004.  Attached to the report, as annexes, are the UNCITRAL Model Legislative Provisions on Privately Financed Infrastructure Projects and a list of the documents before the Commission.

The 36 current members of the commission are:  Austria, Benin, Brazil, Burkina Faso, Cameroon, Canada, China, Colombia, Fiji, France, Germany, Honduras, Hungary, India, Iran, Italy, Japan, Kenya, Lithuania, Mexico, Morocco, Paraguay, Romania, Russian Federation, Rwanda, Sierra Leone, Singapore, Spain, Sudan, Sweden, Thailand, Macedonia, Uganda, United Kingdom, United States, and Uruguay alternating annually with Argentina.

Draft Resolutions on Requests for Observer Status

Before the Legal Committee were draft resolutions requesting the granting of observer status in the General Assembly.  Organizations requesting that standing were the International Institute for Democracy and Electoral Assistance (document A/C.6/58/L.6); the Eurasian Economic Community (document A/C.6/58/L.5); the GUUAM group comprising Azerbaijan, Georgia, Moldova and Ukraine (document A/C.6/58/L.4); and the East African Community (document A/C.6/58/L.3).

Introduction of United Nations Commission on International Trade Law (UNCITRAL) Report

Tore Wiwen-Nilsson (Sweden), Chairman of the Thirty-Sixth Session of the United Nations Commission on International Trade Law (UNCITRAL), introduced the report.  He said his experience in private practice and as an adviser to both private concessionaires and government agencies had lent weight to his view of the importance that the UNCITRAL Model Legislative Provisions on Privately Financed Infrastructure Projects carried in the field of contract negotiations related to implementing infrastructure projects.  The Assembly had acknowledged the combined responsibility of the public and private sectors in sustainable development.  It would not be possible without investment in public infrastructure in such areas as water, transport, energy and pollution management.  Investments from public or private sources would come only in an enabling environment at both the national and international levels.  A legislative framework promoting private participation in infrastructure was the indispensable component.  With the Model Provisions just adopted for use with the Guide adopted in 2000, States wishing to attract private investment in public infrastructure would make a firm commitment toward public-private partnerships.

He then turned to the draft legislative guide on insolvency law that would be completed and adopted in 2004.  He said the functioning insolvency regime would encourage economic development and investment, preserve employment and foster entrepreneurial activity.  The completion of work in that difficult area within two years was evidence of the cooperation characterizing the Commission’s work, not only in gaining acceptance of its texts internationally, but also in the development of international standards through cooperation with the World Bank, International Monetary Fund, the International Bar Association and many others.  

Touching on the Commission’s work in the areas of arbitration, electronic commerce, transport and security, as well as their contribution to cross-border commercial transactions, he said the Commission had agreed to undertake work in two new areas.  One of those was related to legal aspects of public procurement, since the 1994 UNCITRAL Model Law on Procurement of Goods, Construction and Services had proved to be a benchmark in procurement-law reform with its aim of achieving competition, transparency, fairness, and economy and efficiency in the procurement process.  The Commission would look at the new issues that had arisen in the practical application of the Model Law, including aspects related to the increased use of electronic commerce for public procurement.  In addition, the Commission would hold an international colloquium in 2004 on the issue of international commercial fraud.  The Internet had increased the incidence of such practices with a significant adverse economic impact on world trade and on its legitimate instruments.  The Commission had the unique ability to overcome a major obstacle in combating the problem, namely the difficulty of bringing together the public and private bodies needed to address the civil, regulatory and criminal law dimensions of the phenomenon.

Finally, he turned to the question of strengthening the Commission secretariat.  Reviewing the workload of the six Working Groups rather than the previous three, as necessitated by the modernization of commercial law in an increased number of areas, he said the Commission had amply justified the Assembly’s call for it to be the core legal body in the United Nations system on international trade law.  Member States had entrusted the Commission with increasingly difficult projects in areas necessary for promoting international trade.  Some areas, such as insolvency law, secured transactions and privately financed infrastructure projects had been considered too difficult to harmonize at the universal level in the past.  In addition, the needs for law-reform assistance were growing, particularly in developing countries.  Yet with all that, the Commission’s resources had been kept at the 1968 level, despite the Assembly calling for substantial strengthening of the Commission’s secretariat.  Parallel initiatives were being undertaken with organizations in areas such as electronic commerce and the settlement of disputes.  The revised and expanded structure for the Commission was overdue.

HANS CORELL, Under-Secretary-General for Legal Affairs, and United Nations Legal Counsel, pointed out the growing number of international organizations preparing rules governing international trade, and observed that those rules might be in conflict, leading to confusion and waste of resources.  The UNCITRAL’s mandate included coordinating the work of those different organizations.  The Commission and its secretariat were doing their best to encourage constructive cooperation and complementarity among those rules-formulating agencies, he said.

The Legal Counsel drew attention to a section of the Commission’s report in which it identified work of the Economic Commission for Europe as having the potential of overlap in the Commission’s work.  The Commission would like the matter to be discussed by the appropriate organs of the General Assembly, he said.

He therefore urged the Sixth Committee to consider the matter and to clarify the mandate and the respective roles of the Commission and the regional economic commissions in formulating and promoting the modernization of rules on international trade.  He said it was necessary that General Assembly organs charged with the coordination of programmes and budgetary issues should address the matter and take appropriate decisions.

Another issue the Legal Counsel addressed was the Secretary-General’s proposal to strengthen the Commission’s secretariat, based on repeated requests of the Commission and reaffirmed by several resolutions of the Sixth Committee.

He said that, ideally, at least two legal officers should be available to deal with each of the six projects entrusted to a working group of the Commission.  To reduce the amount of staff resources involved in that activity, however, clusters of three legal officers, including a senior legal officer, should be put in place to deal with two concurrent projects.  That pillar would comprise a total of 9 officers, which would include a principal legal officer as its head.  That officer would provide the necessary level of coordination among the various working groups.

The second pillar would deal with three types of activities: coordination of the work of international organizations active in the field of international trade law; technical legislative assistance, in particular to developing countries; and dissemination of information on modern legal developments, including case law in the field of international trade law.  The two pillars would cooperate and interact daily and share staff and other resources as required, he said.

He said the Commission had noted with concern in 2002 that if its secretariat was not significantly strengthened, it would have to reduce its work programme.  Unfortunately, according to the Legal Counsel, the Advisory Committee on Administrative and Budgetary Questions (ACABQ) had not been convinced that the proposal to create a Division headed by a D-2 met with the criterion set by the General Assembly, namely that it be within the bounds of the resources available.  The Legal Counsel said he disagreed with the ACABQ, whose statement, he said, seemed to be the result of an oversight, given the fact that the budget proposal was achieved by streamlining and increasing efficiencies within the Office of Legal Affairs.  That made it possible for those resources to be redeployed from other parts of the Office to the UNCITRAL secretariat.  The redeployment had made it possible for the Office of Legal Affairs to present a proposed programme budget that reflected an overall decrease in comparison with the budget for the 2002-2003 biennium, he said. 

He also said that failure to address pressing needs would be unfortunate and difficult to explain, in view of the modest sum of funds involved -- $719,400, -- and the fact the resources for UNCITRAL could be covered by the existing level of resources of the Office of Legal Affairs.

The Legal Counsel urged the Sixth and Fifth Committees to take account of the considerations underlying the Secretary-General’s proposal, and also that the recommendation of the General Assembly would be to adopt the proposed programme budget for the UNCITRAL secretariat in its entirety.  It was important that the focus should be on technical legislative assistance, particularly to developing countries.

JOSEFIN SIMONSSON (Sweden), speaking on behalf of the Nordic countries, said the reported achievements of the Commission showed that extended cooperation and awareness in the field of international trade law was widely accepted as a key to success in global trade and economic development.  The Model Legislative Provisions on Privately Financed Infrastructure Projects, to be consolidated with the text of the Legislative Guide on the same subject, would facilitate the establishment of a legislative framework favourable to projects of that kind.  The product must be seen as a considerable success for UNCITRAL.

She noted the important progress that was also made in other parts of the Commission’s work programme, and expressed the Nordic countries’ satisfaction with the preliminary approval of the draft UNCITRAL legislative guide on insolvency law.  The understanding on the need for cooperation, coordination and convergence around the instrument was important.  The Nordic countries hoped the distribution of seats for new members of the Commission would provide for a fair and realistic balance in the Commission’s future work.  They emphasized the importance of a continued discussion on how the participation of delegates from developing countries could be financed.

ANDREI POPKOV (Belarus) said e-trade was becoming increasingly important in international commercial activity.  The Commission was a very effective body with much potential for assisting developing countries since its work had a significant impact on the legislation of the countries just expanding into international trade.  Also, they preferred to deal with international norms rather than with variations in national practices.  The draft guide on insolvency and work on the electronic trade norms were particularly pertinent in today’s marketplace.  His country was a transit and continental country.  The Commission’s work on transport law was particularly significant to it.

He said he supported the inclusion of public procurement as an issue the Commission would take up.  The cooperation with the Vienna Crime office to work on the question of electronic fraud should continue.  Adequate resources should be given to the Commission in light of its importance to the growth of evolving trade for developing countries.

SHARON ONG (Singapore) said the Commission had always played a critical role in removing barriers to international commerce.  Her country had been elected a member of the Commission in 1966 and had been an active member in its commitment to harmonizing laws relating to international trade.  Commenting on the various areas of the Commission’s work, she said the proposed convention on electronic contracting would be invaluable.  The Model Law on International Conciliation that the Assembly had adopted this year was timely.  Also important was the Commission’s work on the areas of training and assistance, particularly in promoting legal texts to governments.

The case law on UNCITRAL texts was a comprehensive system for collecting and disseminating information on court decisions, she said.  It promoted international awareness of legal texts and was a valuable tool for use with cases and arbitral awards.  The Commission’s role in promoting transnational commercial transactions was critical since it served to increase stability and inter-dependency among countries through the development of world trade.  It should receive adequate resources for its work of developing a legal infrastructure for a global economy.  Its membership should be increased and its secretariat upgraded for an effective discharge of its responsibilities.  Member States should send their representatives to take part in the Commission’s working groups.   

JULIET SEMAMBO KALEMA (Uganda) noted areas of the Commission’s work and said cooperation between the Commission and the World Bank on insolvency law was particularly welcome.  The guide would be a useful tool for all States regardless of different legal traditions and economic background.  Also of great relevance was the dissemination of case law on UNCITRAL texts and other uniform texts.  The documents were useful both for the public and for researchers, professors and the judiciary.  The importance of training and technical assistance could not be overemphasized in unifying and harmonizing trade law.  It was particularly useful for developing countries and those with economies in transition, which lacked expertise.

       Therefore, she said, the Secretary-General should substantially increase the Commission secretariat’s human and financial resources.  Also, she said, some countries were having difficulty attending the Commission’s sessions.  Their contribution, however, was vital for reflecting concerns and for universal acceptance and application of instruments to be adopted.  More contributions should be given to the Trust Fund to enable all countries to participate.  

PULIDO SANTANA (Venezuela) said her delegation had participated as an observer in the Commission’s work.  It was aware of the Commission’s importance, as international trade had become an important part of international relations.  Venezuela favoured the elimination of barriers in international trade, taking account of the concerns of developing countries.  She commended the Commission for its work and urged it to continue in the same effective manner as it had done so far.  There should be coordination in its work with other bodies, also in elaborating rules of international trade law.  She said she believed coordination was important for duplication to be avoided.  She supported dialogue between the Commission and the Office of Legal Affairs.  She also supported the increase in the Commission’s membership, adding that her Government would like to participate fully in its work.

M. GANDHI (India) said he trusted that the draft legislative guide would be ready for finalization and adoption at the Commission’s 2004 session.  He welcomed the Commission’s work on electronic commerce which was attempting to streamline the legal framework to facilitate electronic commerce and electronic governance.  He announced that India had already enacted an Information Technology Act based on the Commission’s work.

He said new issues and practices that had arisen since the adoption of the Commission’s 1994 Model Law on Procurement of Goods, Construction and Services justified its review and possible adjustment of the text.  While overlapping might be inevitable and sometimes even desirable, he called for increased coordination between the different agencies engaged in formulation of international trade rules.

ALEXANDER MARSCHIK (Austria) noted the Model Legislative Provisions on Privately Financed Infrastructure Projects.  He said a legislative and regulatory framework for infrastructure projects was a reassuring signal for potential private investors in a global world.  The model provisions could have an important impact when States considered new legislation on the issue.  It would thus contribute to attracting private investment for infrastructure projects, especially in developing countries.

He said the Commission’s efforts to harmonize and develop international trade law went beyond discussion and adoption of legal texts.  He noted the work on case-law texts and training and technical assistance seminars.  He said the Commission’s workload was placing a severe strain on the secretariat’s resources, and he fully supported the well thought out proposal by the Legal Counsel to strengthen and restructure the secretariat within the resources of the Office of Legal Affairs.  It was unfortunate that the ACABQ had not endorsed the proposal to restructure the secretariat into a division.  It was in the best interests of member States to follow the Legal Counsel’s original proposal; he knew best how to structure his Office.

ANACLETO REI LACANILAO (Philippines) said cooperation between the Commission and other organizations was welcome for the development and harmonization of international trade law.  Requests for teaching and training assistance in the drafting and finalization of legislation had increased.  Those activities played an important role in the economic development of many countries.  Governments should make contributions to the various Funds within the Commission’s mandate.  The secretariat should increase its efforts to get adoption of its texts and the secretariat should be strengthened to enable it to do so.  The three bodies should coordinate formalization and harmonization of international law.

The expanded Commission would be more effective but, to reap the benefits of the increased membership, countries must take a vital and active role.  Assistance should be given to countries that did not have the resources to participate fully.

GUAN JIAN (China) said the items the Commission had studied at its annual session were the most current issues in the field of international trade.  They called for urgent efforts to unify and coordinate positions among nations and regions.  The Commission was one of the most important organs within the United Nations system for the discussion and preparation of provisions in international trade law.  It worked to harmonize and unify the laws of different jurisdictions and studied the latest developments.  Many countries had adopted conventions and model laws the Commission had prepared.  It was greatly enhancing the development of international trade.

ERIC ROSAND (United States) said the key to the success of the Commission’s work was that it produced effective international private law texts in a technically focused and non-politicized manner.  The Model Law on international commercial conciliation had been incorporated into his country’s legislation.  Other countries should follow suit in taking that important step toward the resolution of international disputes.  The work on privately financed infrastructure projects was of particular importance for States seeking to develop their infrastructure.  Drafting legislation presented a challenge and the work done by the Commission reflected recent developments in the field.  Modern project finance could significantly reduce pressure on developing country budgets and avoid undue assumption of sovereign debt.  Public/private partnerships had led to many advancements in the past 10 years.  The Assembly should encourage member States to implement the proposals and attract private capital to support crucial infrastructure development.

He reviewed other areas of the Commission’s work and highlighted that done in relation to procurement law, electronic transactions and risk analysis.  He said the draft legislative guide for secured finance could soon call for the making of certain policy decisions on the economic impact of alternative systems of secured finance.  Given that the Commission’s mandate was to enhance commerce and trade for States at all levels of development, it was important for such economic assessments to be made.  The Commission should go beyond just cataloguing options, which was a more limited task that could be done by other bodies.  Finally, the examination of civil means of combating the growth of international commercial fraud was a good area for the Commission’s future work, since that could undermine critical commercial activities and threaten economic stability and the markets of developing States.  He supported the strengthening of the Commission’s staff.

A.J. JACOVIDES (Cyprus) said his country had been a beneficiary of the training and technical assistance provided by UNCITRAL.  It had made a modest contribution to the Trust Fund for Travel Assistance in recognition of the worth of UNCITRAL’s technical assistance activities.  He commended UNCITRAL for the progress achieved on its work on arbitration and conciliation.  Cyprus, he said, aspired to become a regional centre for arbitration, and the Government had recently taken the necessary steps to do so.

He said Cyprus, which was in the vanguard of the initiatives to create UNCITRAL in the mid-sixties and had served on it for a number of years, was fully cognizant of the important role of commercial law for the proper functioning of a healthy economic system.  It supported an increase in resources for UNCITRAL’s secretariat.

MICHAEL BLISS (Australia) said the finalization of the Model Law on Privately Financed Infrastructure Projects was a significant achievement.  He said the model provisions would provide sound guidance to domestic legislators seeking to introduce or reform laws regarding partnerships between government and the private sector for the provision of public infrastructure.  Australia welcomed the progress of the Commission’s working group on transport law on the draft instrument on the Carriage of Goods by Sea and the completion, at the eleventh negotiating session in New York, of a first reading of the text.  Australia strongly supported the move to create a modern international instrument on the carriage of goods by sea that could gain widespread international acceptance.

Australia also welcomed the sectoral analysis by the Office of Internal Oversight of the way in which the various organs of the United Nations dealt with trade law.

KENICHI KOBAYASHI (Japan) said careful consideration was required on the proposal for a two-week session for a Commission’s working group.  That would be burdensome for member States and the secretariat.  He said the Japanese Government was strongly interested in the work on arbitration.  Its new domestic legislation on arbitration, based on UNCITRAL’s, was adopted in July and would enter into force next year.  Japan had already enacted a special law on consumer contracts concluded through electronic means, and was availing itself of the Commission’s work on electronic commerce.

He said Japan considered the formulation of a legislative guide on security interests as essential.  Account should be taken of national legislation in that area to ensure harmonization at the international level.  It was necessary to avoid a hasty adoption of the proposed regime in view of the difficulties in the treatment of rules of international private law.

DMITRY LOBACH (Russian Federation) said the privately financed infrastructure projects guidelines would help regulate private sector involvement in infrastructure development.  Its legislative direction would relieve current restrictions on private involvement in it.  Similarly, the Commission’s work on insolvency would be useful for all countries, regardless of differences in traditions and economies.  Reviewing the Commission’s work further, he pledged his country’s support, as a Commission member, to support the work of developing uniform standards in trade law as an important element for globalization.

GAVIN WATSON (United Kingdom), referring to the instrument on Privately Financed Infrastructure Projects, said he hoped it would be possible for funds to be found at an early opportunity to reprint the Legislative Guide, to include the Legislative Recommendations and the Model Legislative Provisions.  On insolvency law, the United Kingdom’s representative said his country looked forward to the opportunity to comment on the draft guide and to the working group’s next meeting in 2004.  It was pleased to note the secretariat’s comment that the work on security interests should reflect corresponding or related provisions in the insolvency project.  It would be desirable for the two working groups which were carrying out their tasks in related areas to conclude together.

He said the United Kingdom was pleased and impressed to learn that the Office of Legal Affairs had identified significant savings over the past year.  It was supportive of those savings being made available for the work of UNCITRAL, in view of the Commission’s central role in the development of international commerce.

Requests for Observer Status

The representative of Sweden introduced the draft on the request of the International Institute for Democracy and Electoral Assistance (IDEA) to be granted the status of observer in the General Assembly.

The representative of Kazakhstan introduced the draft on the request of the Eurasian Economic Community to be granted observer status in the General Assembly.

The draft on the request of the GUUAM group (Azerbaijan, Georgia, Republic of Moldova and Uzbekistan) to be granted observer status in the General Assembly was introduced by the representative of Georgia.

The East African Community’s request to be granted observer status in the General Assembly was contained in a draft introduced by the representative of Uganda.

Speaking on that draft, the representative of the United Republic of Tanzania said his country was a founder member of the East African Community and host to its headquarters.  He said the Community, launched in 1999, was built on a strong foundation of a shared history of cooperation and cultural affinities among the three East-African countries forming the community -– Kenya, Uganda and the United Republic of Tanzania.  He said the integration process was proceeding apace.  The establishment and modalities of a single internal market had been agreed upon and were already operating with a fixed timetable for a complete free trade area.  A Customs Union Protocol was to be signed before the end of the year. 

When the Committee met again this afternoon, OLUSEGUN AKINSANYA (Nigeria), said his government had put in place an investment regime that recognized the crucial role of foreign direct investment in the development of its economy.  An appropriate enabling environment had been established to protect foreign investors while ensuring delivery of quality services to the country.  His delegation supported the call for more resources to meet UNCITRAL’s increasing responsibilities, particularly for the strengthening of its secretariat’s technical assistance programmes.

Nigeria shared the Commission’s concern over the growing number of cases of commercial fraud at the international level and their negative impact on world trade as well as their adverse effect on legitimate instruments.  It supported the proposal for an international colloquium on commercial fraud to be held in 2004.  Nigeria urged the continued collaboration of UNCITRAL with bodies with similar interests.  He said he wished to stress, however, the maintenance of strict vigilance to ensure that the Commission’s independence was not compromised.  

AMINA MOHAMED (Kenya) said UNCITRAL offered the most appropriate forum for future work in the important field of commercial law.  For a truly globalized world to be achieved, member States should strive for uniformly applicable laws and standards for which UNCITRAL had made significant contributions.  Priority should be given to helping developing countries, especially in Africa, to bridge the technological divide in the area of electronic commerce.  The challenge before the Commission was to achieve an efficient and effective international insolvency regime which acknowledged the various approaches from different traditions, while at the same time providing useful guidance.  That objective was well covered by the draft legislative guide on insolvency law, she said, and added that her delegation hoped the Commission would refine it without derogating from its key objectives.

The new Kenyan Government was implementing reformed procurement regulations, first introduced in 2001, and was insisting on their strict application.  She urged support for the proposal that procurement law should be included in the Commission’s future programme.  She welcomed the progress achieved by the secretariat in developing the digest on Model Arbitration Law and hoped that similar efforts would be extended to other areas of Model Law. 

JEAN LUC FLORENT (France) said the Commission had done absolutely remarkable work during its past session.  Its work on the private financing of infrastructure projects was an important addition to the evolution of international law that brought together common law and civil law in a framework useful to all countries.  The work on electronic commerce was equally important.  The expansion of the Commission’s membership was a sign of the growing interest the world took in the Commission’s work, which was impacting international law and creating the framework for the global economy.  The Commission had doubled in size as had the number of its working groups, whose activities fell into the two distinct categories.  They rationalized international trade law and also prepared model laws that States could use in developing legislature on trade law.

The Commission must remain objective and nonpolitical, he continued.  He said the provision of documents in all official languages was critical for dealing with such complex issues.  The Commission must be given the resources to take its pivotal place in the development of international law and trade.

ALFONSO ASCENCIO (Mexico) highlighted areas of particular interest to his country, among the issues the Commission had considered during its latest meeting.  He said insolvency law was a most important emerging area for international law.  The provisions contained in the Commission’s instrument were equitable to both creditors and debtors.  It would provide for an orderly process that ensured fairness towards the rights of all and would facilitate the flow and recovery of assets.

The UNCITRAL Model Law on Commercial Arbitration was also an important development, he said.  Continuing efforts should be made to ensure the arbitrated award was made collectable.  Also, the work on international electronic contracting would facilitate cross-border trade transactions.  Both were increasing their presence in international trade as a result of the rapidly expanding Internet web.  Studies on the issue of commercial fraud should be conducted so as to close up the loopholes in that emerging area of international law.  The resources of the Commission should be strengthened and member States should contribute to the Commission’s Fund.    

KARIM MEDREK (Morocco) reiterated his country’s ongoing interest in its work.  He said that UNCITRAL was one of the major success stories of the United Nations system.  Morocco supported the decision to increase the Commission’s membership.  The substantive expansion of the membership would strengthen its activities and make it efficient in its contribution to the elaboration of international trade law.  He urged coordination between the Commission and other agencies in the field of international trade law.  Morocco was pleased to see a productive outcome of the Commission’s last session.  He noted the various instruments adopted by the Commission at the session and those for which work had begun, including model laws and legislative guides.  Those instruments would help States adapt their national legislation and apply them.

He also said the working group on insolvency laws and model guides would provide useful guidance to States, whatever their legal traditions.  With respect to the working group on arbitration and conciliation, he said progress made should be recognized.  Priority should be given to work being done on electronic commerce, security interests, arbitration laws, public procurement and commercial fraud.  He said additional efforts should be made to help African States through the provision of technical assistance.  He commended the UNCITRAL secretariat for continuously updating its Web site.

ALI HAFRAD (Algeria) welcomed the Commission’s achievements during its last session, including the adoption of the model provisions on privately financed infrastructure projects, and the work on arbitration and conciliation, insolvency law, electronic commerce, transport law, and security interests.  He also welcomed the consensus achieved in the working group on insolvency law.  There was no doubt that the case law digest was an important part of training and technical assistance provided by the Commission’s secretariat.  There was no doubt about its usefulness.  He commended the training and technical assistance programmes given to developing countries, particularly in Africa and those countries with economies in transition.  He urged the strengthening of those programmes.

GIUSEPPE NESI (Italy) said he would limit his observations to the growing demands being put on the Commission to take on new areas of work and the limitations on the resources being made available for its work.  He commended the Legal Counsel’s plan to restructure the secretariat within the Office of the Legal Counsel.  He said it was disappointing that the ACABQ had disagreed with that important need.  He would support gaining acceptance for the plan.  

JORGE ROMEU (Spain) said the model provisions on privately financed infrastructure projects were an important achievement, as were those on electronic commerce, insolvency and arbitration.  Those were all areas of international trade law that had lacked transparency and had hampered economic development.  The cooperation between the Commission and other bodies was welcome, as, for example, the Commission’s joint work with the World Bank on the question of insolvency.  Developing trade law was a demanding task.  The Commission was indispensable to the effort.  Yet, an increase in the Commission’s workload had not been accompanied by a corresponding increase in resources.  The secretariat should be restructured as the Legal Counsel had recommended.

ROBERTO LAVALLE-VALDES (Guatemala) noted the Commission’s work on infrastructure and arbitration as particularly useful.  He said the draft legislation on insolvency law was an important development on which work should continue.  Electronic commerce and transport law were areas becoming ever more important.  With the Commission’s increased membership and greater workload, its secretariat needed to be strengthened.  It was hoped that the ACABQ would approve the restructuring recommended by the Legal Counsel.

ITTIPORN BOONPRACONG (Thailand) said his country welcomed the Commission’s expansion and had already submitted its candidature for re-election as a member, starting next year.  He shared the views expressed in the discussions on how participation of developing countries in the work of the Commission could be financed.  Thailand valued the Commission’s work and had implemented the Commission’s legislative guides and recommendations in its domestic laws.  He mentioned an act on electronic commerce of 1998 and, recently, an arbitration act of 2002.  He said Thailand supported the initiative on a comprehensive collection of case law relating to UNCITRAL texts.  He said it would provide an easy access to information pertaining to activities of UNCITRAL.  It would also help in information sharing and dissemination among States.

MYUNG-JAE HAHN (Republic of Korea) said his country was in the process of acceding to the United Nations Convention on Contracts for the International Sale of Goods of 1980.  That convention was one example of how UNCITRAL could successfully contribute to the harmonization and unification of international trade law.  He expressed support for the savings identified by the Office of Legal Affairs to be made available for UNCITRAL’s work.  His Government would continue to contribute to the discussions at UNCITRAL and had applied for membership in the Commission.  As a Commission member in the future, it hoped to participate more actively in efforts to remove legal obstacles in international trade.

MUKONGO NGAY (Democratic Republic of the Congo), recalling a statement made by the country’s president in the General Assembly, said a new dawn of progress and national reconciliation had arrived in the country.  He welcomed the adoption of the model legislative provisions on privately financed infrastructure projects.  He said the instrument would help States to adapt their laws.  He noted the progress achieved on insolvency law and said it was a worthy achievement.  Its eventual adoption would help States, he said.  He encouraged the Commission to pursue its work on electronic commerce.  He said a disturbing aspect of the topic was the growing technological gap between the developed and the industrialized countries and urged efforts to close it.  Developing States should be provided with training and technical assistance towards that end.

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