Introduction to Draft Recommendation 35: Establishing a Legal Framework for an

1. Regional Conference onTRADE FACILITATION, THE SINGLE WINDOW CONCEPT, AND HARMONIZATION OF TRADE DATA REQUIREMENTS IN THE SOUTH CACASUS Introduction to Draft Recommendation 35: Establishing a Legal Framework for an International Trade Single Window Professor William J. Luddy, Jr. Special Legal Counsel - WCO June 2009 Presentation made by Mario Apostolov, Regional Adviser UNECE Trade mario.apostolov@unece.trade

2. DISCLAIMER Please note that the views and analysis that are provided here or discussed during our session are not necessarily those of any organization with which Bill Luddy may be working. They represent his views on the legal topics in this presentation.

3. Introduction • International recognition of the importance of the legal infrastructure of the Single Window for International Trade. • Regional Developments: ASEAN, APEC, SEE, The European Commission, and others • Leading International Organizations • UN Centre for Trade Facilitation and Electronic Business (UN/CEFACT) • United Nations Commission on International Trade Law (UNCITRAL) • The World Customs Organization • Industry Groups

4. Introduction (2) • Strategic Considerations: • International Trade Development • Enhancing Trade Competitiveness • Connecting to Global Supply Chains • UN/ECE/CEFACT Buy - Ship - Pay Model • Importance of International Legal Standards • Intersection of Electronic Commerce and SW Legal Frameworks at the National and International Levels

5. Introduction (3) • The Complexities of the Legal Issues in Cross-Border Single Window Operations • Avoiding Dual ICT Legal Regimes • Private Sector Legal Concerns

6. UN/CEFACT Recommendations • Recommendation 33 - Recommendation and Guidelines on Establishing a Single Window to Enhance the Efficient Exchange of Information between Trade and Government • Published by UN/ECE in 2005 • UN/ECE/CEFACT Legal Group, began work, in cooperation with the International Trade and Business Processes Group – International Trade (TBG15), on Recommendation 35 in 2006 • Draft Recommendation 35 approved and has completed the Public Review process and is awaiting final approval - expected in the next several months

7. UN/CEFACT Recommendation 35 • Undertake a study (including e-Commerce legal benchmarking and ‘gap analysis’ studies) in order to determine an appropriate set of measures that may need to be taken to address legal issues related to national and cross-border exchange of trade data required for Single Window operations (The International Trade Single Window Legal Framework.) • Use the UN/CEFACT checklist and its guidelines (Annexes A and B) to ensure that the most frequent legal issues related to national and cross-border exchange of trade data are included in the framework. • Amend existing legislation, regulations, decrees, etc., if necessary, to address the identified legal issues and gaps. • Utilize international standards, international legal instruments, and soft law instruments, where available, throughout the entire process of creating a legally enabling environment for an International Trade Single Window.

8. UN/CEFACT Recommendation 35 (2) • Guidelines to the Recommendation on Establishing a Legal Framework for the International Trade Single Window: • Annex A: Checklist of Legal Issues for Single Window Operations • Annex B: Checklist Guidelines • Annex C: Toolkit

9. Annex B: Checklist Guidelines • A legal basis for implementing a Single Window facility • National Law and Regulations enabling the operation of the Single Window • Utilize International Legal Standards • Legal authorization for Cross-Border transactions • Functional Equivalence of paper and electronic documents • Electronic Evidence used in enforcement and civil actions • Cross-Border Jurisdiction in International Transactions

10. Annex B: Checklist Guidelines (2) • SW facility structure and organization • Possible SW Structures • Government operated SW facility • Joint Public-Private Partnerships (PPP) • Private Sector Entity • Formal Legal Agreements • Operating Agreements • Memoranda of Understanding • End User Agreements • Service Level Agreements

11. Annex B: Checklist Guidelines (3) • Data Protection • Information Security • Access to and sharing of Data • Information Security Agreements (ISAs) • Risk Analysis and avoiding Data Breaches • Privacy Issues • Personally Identifiable Information (PII) • Privacy Impact Assessments (PIA) • Confidential Trade Data Protection • Considerations for creating National Legislation and/or Regulation for Data Protection

12. Annex B: Checklist Guidelines (4) • Authority to access and share data between government agencies • Which government agencies are permitted to access the SW and what information may be shared by the SW with each governmental agency? • Memoranda of Understanding between the SW operator (e.g., Customs) and those governmental agencies authorized by law to access SW data. • Data Retention requirements.

13. Annex B: Checklist Guidelines (5) • Identification, Authentication and Authorization • Access Security Measures for • Government Agency Employees • End Users • Emerging Identity Management Legal Trends • Electronic & Digital Signature Legal Issues (Technology Neutrality) • Potential Barriers to Trade • Data Quality Issues • Accuracy and Integrity of Data processed in the SW • Audit trails, logging and recording mechanisms

14. Annex B: Checklist Guidelines (6) • Liability issues (obligations and responsibilities) • Inaccurate or incomplete data • Processing Errors • Submission Errors • Enforcement and Sanctions • Data Breaches • Monetary and other Damages • Within the national legal framework • Cross-border damages and enforcement

15. Annex B: Checklist Guidelines (7) • Arbitration and dispute resolution • Advantages of alternative dispute resolution (ADR) mechanisms • Incorporating ADR provisions in bi-lateral and multi-lateral agreements • Electronic documents • Overcoming the barriers of “paper” • The principle of Functional Equivalence

16. Annex B: Checklist Guidelines (8) • Electronic archiving • Data Retention Programs • Technology considerations • Legal considerations • Use of archived Electronic Documents and Messages in Administrative and Judicial Proceedings • Cross-Border Legal Considerations

17. Annex B: Checklist Guidelines (9) • Intellectual property rights (IPR) and database ownership • Ownership and/or control of data submitted to the SW? • Government agencies? Commercial parties submitting data to the SW? • IPR Related to the SW “system” • Establishing ownership/licence rights in computer hardware, firmware and software • Rights to upgrades and software integration • Warranties of non-infringement, defense costs and indemnification clauses

18. Annex B: Checklist Guidelines (10) • Competition • Antitrust and Protectionist Concerns • Consideration of GATT Obligations • Articles V, VIII, and X

19. Annex C: Toolkit • Importance of International Legal Standards - Redux • For example, International Legal Guidance Texts: • UN/ECE/CEFACT: Recommendation 35 (2009) • UNCITRAL: • UN Electronic Communications Convention (2005) • UNCITRAL Model Law on Electronic Commerce (1996) • Promoting confidence in electronic commerce: legal issues on international use of electronic authentication and signature methods (2009) • Others….

20. Checklist of basic legal issues Law on electronic signatures Is the system working on a PKI basis? Is there a root CA + a network of CAs? 2) Law on electronic commerce 3) Law on e-government 4) Law on data protection 5) Do sectoral laws (e.g. sanitary laws) envisage the use of sector and/or country specific codes 6) Are there requirements of paper originals in law?

21. How to tackle requirements of paper originals in law? National legal system determines the procedure of elimination of form requirements The complex method is to identify all relevant provisions containing form requirements and amend them E-commerce laws are based on a general clause making electronic records functionally equivalent to paper documents

22. Single Window Legalities: The Adventure Continues! Questions?

23. Thank you Professor William J. Luddy, Jr. Bill.Luddy@mac.com William.Luddy@wcoomd.org Mario Apostolov, Regional Adviser, UNECE Trade Division mario.apostolo@unece.org