United Nations Drafts Online Commerce Laws

Work on digital signatures, certification procedures could have long-term impact on international law

An international committee at the United Nations is preparing to draft model laws for online commerce, giving industry an additional lever to shape the future of online commerce.

In February, the government and industry members of the U.N. Commission on International Trade Law will meet in New York and will likely begin to draft model laws for digital signatures and certification procedures.

The committee's model laws have no legal standing, but provide a guide for national governments seeking to draft and approve their own electronic commerce laws.

"In the long run, [the committee] should have an impact in international law," said Peter Robinson, an executive at the New York-based Council on International Business. The council works alongside the International Chamber of Commerce to influence the development of trade-related laws.

The U.N. group can lever open markets and harmonize international rules and regulations, said Robinson. "Business, or anyone else, should be interested in ensuring their views are heard at an early stage," he said.

The U.N. committee has already "been tremendously influential," said Michael Baum, policy chief at VeriSign Inc., Mountain View, Calif. For example, legal proposals prepared by the committee for a June report have already been included in the U.S. Uniform Commercial Code and in Utah's state laws, said Baum, whose company is marketing a digital certification system.

Digital certification systems are needed to help online buyers and merchants verify each others' identity and creditworthiness, and also to confirm the delivery of information and payments.

Some portions of the June report have also been included in an electronic commerce law prepared by the Chilean government, said Ted Barassi, an executive at New York-based CertCo LLC, which is also marketing a certification system.

The June report recommended the committee continue work on electronic commerce issues and help develop rules on digital signatures and certification businesses. For example, the commission should investigate liability rules for online buyers, sellers and third parties, which include companies that provide communications or certification services, said the June report.

"U.S. businesses should care because... the future of Internet commerce depends on digital signatures and the authentication capabilities it brings to bear," said Barassi.

However, the U.N. group can't address some of the most central issues raised by digital signatures and certification, said Barassi.

For example, the commission can't address the question of whether governments should allow internal security forces to operate certification services, he said.

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