LEGAL COMMITTEE MEMBERS STRESS NEED TO UPGRADE COMMERCIAL LAWS FOR CROSS-BORDER TRANSACTIONS

Sixtieth General Assembly

Sixth Committee

2^nd Meeting (AM)

LEGAL COMMITTEE MEMBERS STRESS NEED TO UPGRADE

COMMERCIAL LAWS FOR CROSS-BORDER TRANSACTIONS

Review of Annual Report of UNCITRAL Is Concluded

Legislative and technical assistance to help developing countries upgrade and reform their trade laws figured prominently in many statements this morning, as the Sixth Committee (Legal) concluded its examination of the annual report of the United Nations Commission on International Trade Law (UNCITRAL).

The Commission recognized that despite liberalization of trade through agreements, many cross-border transactions did not take place, or did so under unfavourable circumstances because of failures to upgrade commercial laws, the representative of the United States said.  She commended the Commission for its technical and non-politicized approach to commercial and economic law reform, which focused on promotion of trade and commerce in all geographic regions and for States at all levels of development.

The representative of Kenya urged the Commission to also seek to bridge the digital divide in international electronic commerce, through its technical assistance programmes.  He was one of several speakers who called for contributions to be made to UNCITRAL’s trust funds for travel and technical assistance and training.

The major development of UNCITRAL’s thirty-eighth session was the completion of a new draft convention intended to remove obstacles to the use of electronic communications in international contracting, including those that might arise under existing international trade law regimes.

The Chairman of UNCITRAL, Jorge Pinzon Sanchez, Colombia, said the Commission as a whole deserved the commendation expressed by representatives about its achievements.  He also paid tribute to members of the Commission’s secretariat for their professionalism in making possible the various instruments produced by UNCITRAL.

Also speaking this morning were the representatives of Spain, Algeria, Nigeria, Canada, India, Japan, Morocco, Venezuela, the Russian Federation, China, Indonesia, Sierra Leone, Sweden (on behalf of the Nordic countries) and Mexico.

Two draft resolutions on granting observer status in the General Assembly were introduced this morning:   Tanzania introduced a draft concerning the Common Fund for Commodities; and Ecuador introduced the draft on the Latin American Integration Association. 

The Committee will meet again on Thursday, 6 October, at 10:00 a.m. to begin its consideration of measures to eliminate international terrorism.

Background

The Sixth Committee (Legal), today resumed its consideration of the report of the United Nations Commission on International Trade Law (UNCITRAL) on the work of its thirty-eighth session (document A/60/17), which took place from 4 to 15 July 2005, in Vienna.

The major development of UNCITRAL’s thirty-eighth session was the completion of a new draft convention on the use of electronic communications in international contracts.   The instrument is intended to remove obstacles to the use of electronic communication in international contracting, including those that might arise under existing international trade law regimes.  Most of those texts were negotiated long before the development of new technology, such as e-mail, electronic data interchange and the Internet, according to the Commission’s report.  (For further information, see Press Release GA/L/3273 of 3 October).

Statements

JULIO GONZALEZ CAMPOS ( Spain) said the entrance of 24 new members to the Commission had already begun to yield positive results.  He hoped there would also be a steady expansion of the human and financial resources available to the Commission, in particular the resources that would allow full and greater participation by developing countries.   

He welcomed the draft convention on e-commerce, describing it as a difficult topic, and said that UNCITRAL had elaborated norms and rules that would be very useful to all legal operators. With its elaboration, UNCITRAL was continuing to show global leadership in that area. 

He also commended the work of the other working groups.  In each case, the working methods were decisive in enabling the working group to succeed.  He cited, in particular, the contribution that informal working groups made in advancing work on the various projects.  UNCITRAL could be proud of its results, especially when its work was so clearly advancing the development of international law around the world.  He suggested that the Commission expand its mandate to include monitoring implementation of the standards and norms set by the Commission.

ALI HAFRAD ( Algeria) said the adoption of the draft convention on e-commerce would facilitate international economic and commercial trade by eliminating the legal obstacles to electronic commerce.  Despite the difficulties, the Working Group on Transport Law would probably have a text ready for adoption in 2007.  He welcomed the work on security interests as well as on arbitration.  The Working Group on Procurement had also made progress taking into account new practices and measures such as e-commerce.

UNCITRAL should play a more active role in coordinating the activities of the various international groups working in the field of international trade law.  He welcomed the Secretariat’s legislative assistance and technical training being offered to developing countries. 

NDEKHEDEHE E.NDEKHEDEHE ( Nigeria) said his delegation aligned itself with the statement made by Namibia yesterday on behalf of the African Group; it welcomed UNCITRAL’s report which underscored the Commission’s invaluable role in the regulation, development and promotion of international trade.  The Commission’s relentless efforts and achievements were demonstrated by its universally embraced enactments on commercial arbitration, electronic commerce, international contract practices and transportation, banking and insolvency regimes.  He also noted the remarkable investments the Commission had made in the training of experts from developing countries in those fields.  His delegation welcomed the adoption of the new convention on the use of electronic communications in international contracts.  That would enhance the volume of business transactions among nations.  It was apparent that the new instrument, coupled with the UNCITRAL Model Laws on Electronic Commerce and Electronic Signatures, provided a good basis to facilitate electronic commerce.  Nigeria joined in urging that the General Assembly to adopt the new instrument during its current session.

He said it was important that the Commission continue its cooperation with such bodies as the European Commission, the Institute of International Commercial Law at Pace University School of Law in New York, the World Bank and the International Monetary Fund.  Furthermore, taking cognizance of growing and alarming global incidence of commercial fraud, Nigeria fully embraced UNCITRAL’s willingness to work with, and assist, the United Nations Office on Drugs and Crimes to bring together relevant intergovernmental experts to prepare a study on fraud and criminal misuse and falsification of identity, and also to develop useful practices, guidelines or other materials for effective and coordinated tackling of the menace.  In Nigeria’s view, those joint efforts would help reduce commercial fraud.

HUGH ADSETT ( Canada) said UNCITRAL’s new instrument on the use of electronic communications in international contracts was one example of how the climate for businesses was improved.  The Convention ensured that international contracts, regardless of the support they used –- paper or electronic -– would not be denied validity.  That was a step in the right direction that fostered international trade, he said.  It also recognized that it was unrealistic in today’s world to require that a contract be put down in writing on paper in all cases.  Canada supported the convention as an achievement in international collaboration for the improvement of commercial law.  Canada had already demonstrated its interest in UNCITRAL’s work on electronic commerce, he said, and added that almost all Canadian jurisdictions, including the provinces and the federal government, had adopted legislation based to a large extent on UNCITRAL’s work.

He said Canada continued to have concerns with United Nations directives limiting secretariat reports, including those of UNCITRAL, to 16 or 20 pages.  Full reporting of UNCITRAL’s deliberations, including the reasoning behind the choices made in drafting its texts, helped States to fully understand the policy considerations behind the provisions of a given instrument.  The detailed reports from working groups were important documents for the later interpretation and application of UNCITRAL instruments.  Detailed reports provided key information about UNCITRAL’s work on complex commercial law issues.  It was that information that needed to be made widely accessible, he said.    

WANJUKI MUCHEMI ( Kenya) said UNCITRAL’s work at its thirty-eighth session reflected its long-standing record of expertise in the development, unification and harmonization of international trade law.  Kenya welcomed the Commission’s finalization and adoption of the draft convention on the use of electronic communications in international contracts.  It endorsed the Commission’s recommendation that the draft instrument should be adopted during the current General Assembly session.  He said his country was wary of the prevailing technological challenges to many developing countries that might delay the full acceptance and application of the draft convention in those countries.  He therefore urged that the Commission in its technical assistance programmes should also seek to address the digital divide in international electronic commerce.  Only then could the convention be successfully and smoothly implemented, he added.

Noting that no contribution had been received to the trust fund on travel assistance since its last session, he said UNCITRAL should consider exploring other methods of raising funds to supplement the voluntary contributions.  Efforts should be made to facilitate an all-inclusive participation in the Commission’s work, for its texts to gain universal acceptance.  He echoed concerns expressed by some delegations at the Commission’s last session concerning the lack of transparency in the working methods of some of its working groups.  While recognizing that informal working groups of the Commission were an important element in UNCITRAL’s work, the Kenyan representative said the Commission’s credibility was at stake if such meetings were convened without adequate notice to all Commission members.  On another issue, he said that some of the Commission’s texts had been incorporated into local laws.   

INDER JIT ( India) said the draft convention on e-commerce dealt with determining a party’s location in an electronic environment; the time and place of dispatch and receipt of electronic communications, and the use of automated message systems for contract formation.  It also set out provisions covering equivalency with paper documents and hand written signatures.  Some principles had been significantly modified to meet the need for greater certainty.  Earlier UNCITRAL initiatives in e-commerce had taken the form of “model” laws which signatories could choose to follow in domestic legislation.  However with this convention, signatories would be agreeing directly to recognize common terms in contract law.

As for the work on arbitration, India believed that incorporation of an “opt-in” option was more appropriate than a proposed “opt-out” option.  He welcomed the new provisions in the field of international transportation on “right to control” and transfer of rights.

HIROSHI TAJIMA ( Japan) said the Model Law on Procurement of Goods had contributed significantly to the unification and coordination of domestic legislation on the issue, but it was essential to adjust the Model Law to respond to such changed circumstances as the recent expansion of the use of electronic communications in the area of procurement.  Japan was also looking forward to progress on the amendment of the Model Law on International Arbitration, with the possible requirement to have the arbitration agreement in written form and interim protection measures.

Once work with respect to international carriage of goods by seas was completed, it would improve the current situation, under which multiple international legal frameworks must co-exist, and establish clear rules that would facilitate the resolution of problems that existing legal frameworks did not address.  However, difficult issues, such as the scope of application, required careful consideration.  On a legislative guide for security interests, it was important to consider coordination of the existing national legislation of each country, with the goal of constructing a harmonized international legal regime.  The work of formulating such a regime entailed addressing the difficult question of how to treat the rules of private international law.

KARIM MEDREK ( Morocco) said the last session of UNCITRAL had been very productive, with notable progress made on the issues of e-commerce, procurement, arbitration and security interests.  The draft convention on e-commerce would eliminate legal obstacles to the increasing use of such commerce.  The draft offered an effective legal regime that would facilitate economic development in all regions and in countries in differing stages of development by contributing to a limitation of the risks of abuse and commercial fraud.

Morocco welcomed the progress made by the Working Group on Transport Law.  The related model law would benefit by an updating to take into account new practices.  Two additional sessions should be enough for the Working Group on Arbitration to submit its proposals on interim measures on an ex parte basis.  In addition to the progressive development of international trade law, UNCITRAL also had a responsibility to promote awareness and dissemination of its case laws.  In that regard, technical assistance in terms of law reform was very important.  He thanked those who had contributed to the trust fund for assistance and called other countries and international organizations to also help meet the needs of developing countries and countries in transition, particularly countries in Africa.

LAILA TAJ EL DINE ( Venezuela) said that sometimes UNCITRAL should refrain from expressing opinions or regulating in areas that had implications that could affect matters that were within the exclusive purview of national legislations of States.  It was important to take into account the interests of developing countries in UNCITRAL’s work.  She detailed her country’s position on the developments in the various working groups, such as the ones on transport law, e-commerce, arbitration and insolvency law, vis-à-vis Venezuela’s national Constitution and related national legislation.

She called for a strengthening of the programmes to provide technical and legislative assistance to developing countries and for contributions to the travel fund to allow their greater participation in UNCITRAL’s work. 

ANNA LYUBALINA ( Russian Federation) observed that UNCITRAL had done very fruitful work in the past years.  She expressed concern about the ongoing problem of non-use of all official languages in the Commission’s work.  She welcomed the adoption of the new instrument in the use of electronic communications in international contracts adopted by the Commission at its last session.  The instrument was valuable because of the developments in modern technology.  It was potentially useful and would evoke confidence in the use of electronic communications in international commerce.

She said the Commission could also further develop related norms in international trade and commerce.  She stressed the need for proper coordination between the Commission’s work and similar bodies involved in development of norms related to international trade.  She also welcomed the progress that the Commission’s working groups, particularly the one dealing with procurement, were making.  She wished the Commission further success in its work.

GUAN JIAN ( China) said the membership of UNCITRAL, with its varying diversity of economic development and legal regimes, had benefited the Commission’s work, in making it more forward-looking, authoritative and representative.  The current topics were a reflection of the problems that had sprung up in large numbers in the areas of international trade, and which called for an integrated and coordinated response at the national and regional levels.  For wider acknowledgement and acceptance of its conventions, UNCITRAL, in its drafting work, should better heed the views of all parties and take into consideration the different situations of various countries.  It should also do a better job of raising public awareness about the legal instruments it has formulated.  He suggested that UNCITRAL, in particular, strengthen its promoting and technical training in developing countries so that they could better benefit from the Commission’s work.

ADAM M. TUGIO ( Indonesia) commended UNCITRAL on its adoption of a new draft convention on the use of electronic communications in international contracts.  He said its provisions could serve a dual purpose –- promoting international trade and helping to curb possible abuses in such commerce.  He stressed the need for standard regulations.  He also urged technical assistance to help developing countries to appreciate the texts developed by UNCITRAL.  He noted the significant progress made by the Commission under the able leadership of the Chairman of its thirty-eighth session, Jorge Pinzon Sanchez of Colombia.

ALLIEU IBRSAHIM KANU ( Sierra Leone) associated his delegation with the earlier statements of Namibia, on behalf of the African group, and by Nigeria, Kenya and Venezuela on the issue of technical assistance by the Commission.  He noted the significant contribution the Commission had made to the development of international trade rules with its adoption of the new draft convention on the use of electronic communications in international contracts.  He said the instrument would contribute to economic development.  He said Sierra Leone, a member of the Commission, had been involved closely with its work.  He commended the Commission’s working groups on their achievements so far.

He also commended the Commission on its invaluable assistance to developing countries to participate fully in international trade and commerce, and stressed the need for help to those countries in participating fully in seminars and conferences organized by the Commission.

JERZY MAKAROWSKI ( Sweden), speaking also for the other Nordic countries -- Denmark, Finland, Iceland and Norway -- said those countries recognized UNCITRAL’s work as productive and highly successful in developing international trade law.  International cooperation was central to the achievement of effective trade, which was essential for economic development.  UNCITRAL’s new draft convention provided a common solution to the removal of obstacles to the use of electronic communications in a manner acceptable to States with different legal, social and economic systems.

He said the Nordic countries noted the progress UNCITRAL’s working groups were making, and were confident that the Commission would be able to carry out its ambitious plans of further developing international legal instruments in the field of trade.  They also noted the tremendous work that the Commission’s Working Group on Transport Law had done in the past year.  In their view, the Working Group was approaching the right balance in designing a new instrument on issues relating to the international carriage of goods by sea.  The Nordic countries attached great importance to the Commission’s work and looked forward to its further development of international trade law to ensure economic development.

ALFONSO ASCENCIO ( Mexico) said the draft convention on e-commerce, through providing an international legal regime of a binding nature, would make it possible to make safe use of electronic measures in commercial transactions.  The text provided transparency and legal certainty.  At the same time, it respected the importance of ruling out measures of protection or sanction.  He welcomed the progress by the Working Group on Arbitration in adapting the model law to existing legal regimes.  He expected that substantive aspects, such as discussions on article 7 of the model law on arbitration, would be resolved during the next session.  He also emphasized the importance and relevancy of revising the model law on public contracts to adapt it to current practices.  Such a revision would promote modernization and competitiveness in the procurement of goods by governments.

ELIZABETH WILCOX (United States) said the Commission had continued its technical and non-politicized approach to commercial and economic law reform, and had focused on promotion of trade and commerce in all geographic regions and for States at all levels of development.  The Commission recognized that despite liberalization of trade through agreements, many cross-border transactions did not take place, or did so under unfavourable circumstances because of failures to upgrade commercial laws.  The new text on electronic communications would expand the footprint of modern e-commerce law, especially in developing countries so that they could reduce existing gaps in their access to new e-commerce and Internet markets.  She welcomed the efforts of the various working groups as well.

The United States also commended the Commission for accommodating a doubling of its workload within existing resources.  She supported the plan to explore ways to combat commercial fraud, saying the topic had fallen outside the normal work of existing United Nations bodies.

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