past, current and future work on electronic commerce · popular worldwide around 1994 when the...

Paper presented at the First UNCITRAL Regional Workshop in Asia hosted by Korea University Law School and Korean Ministry of Justice

23-24 November 2010

Past, Current and Future Work on Electronic Commerce

Chang-ho CHUNG

Judge, Republic of Korea

I. Introduction

The meaning of electronic commerce has been changed over the last 30 years. Originally,

electronic commerce meant the facilitation of commercial transactions electronically, using

technology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer

(EFT). These were both introduced in the late 1970s, allowing businesses to send

commercial documents like purchase orders or invoices electronically. The growth and

acceptance of credit cards, automated teller machines (ATM) and telephone banking in the

1980s were also forms of electronic commerce. Another form of e-commerce was the

airline reservation system.

During that period of time, UNCITRAL has focused on international payment issues and

adopted “United Nations Convention on International Bills of Exchange and International

Promissory Notes (1988)”, “UNCITRAL Model Law on International Credit Transfers

(1992)”, “United Nations Convention on Independent Guarantees and Stand-by Letters of

Credit (1995)”.

In 1990, World Wide Web browser was invented and transformed telecommunication

network into a worldwide communication system called “Internet/www”. Internet became

popular worldwide around 1994 when the first internet online shopping started introducing

security protocols. By the end of the year 2000, many Asian, European and American

business companies offered their services through the World Wide Web. Since then people

began to associate a word "e-commerce" with the ability of purchasing various goods

through the Internet using secure protocols and electronic payment services.

1

http://en.wikipedia.org/wiki/Invoice

http://en.wikipedia.org/wiki/Credit_cards

http://en.wikipedia.org/wiki/Automated_teller_machines

http://en.wikipedia.org/wiki/Telephone_banking

http://en.wikipedia.org/wiki/WorldWideWeb

http://en.wikipedia.org/wiki/Web_browser

http://en.wikipedia.org/wiki/World_Wide_Web

http://en.wikipedia.org/wiki/Ecommerce


23-24 November 2010

The rapid growth of computer-based e-commerce as well as transactions over the Internet

and other systems have made UNCITRAL to start working on the preparation of the new

general rules that were needed to clarify how traditional contract functions should be

performed through electronic commerce and UNCITRAL has adopted “UNCITRAL Model

Law on Electronic Commerce (1996)”, “UNCITRAL Model Law on Electronic Signatures

(2001)” and “United Nations Convention on the Use of electronic Communications in

International Contracts (2005)”.

In order to better acquaint readers with UNCITRAL’s effort relating to electronic

commerce, chapter 2 of this article will outline the past work on electronic commerce and

the status of those UNCITRAL texts. The current work on electronic commerce will then

be discussed in chapter 3. Online Dispute Resolution will be considered. Possible future

work on electronic commerce will be reviewed in chapter 4. Electronic single window

facilities, electronic transferable records, identity management and use of mobile devices in

electronic commerce will be briefly summarized. Finally, some evaluations and suggestions

will be given as concluding remarks in chapter 5.

II. Past Work on Electronic Commerce

1. UNCITRAL Model Law on Electronic Commerce

a. Adoption

The original title of the Model Law on Electronic commerce was “Model Law on Legal

Aspects of Electronic Data Interchange (EDI) and Related Means of Communication”.

Draft provisions were prepared by the Working Group on Electronic Data Interchange at

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the close of its twenty-eighth session in October 1994, pursuant to a decision taken by the

Commission at its twenty-fifth session (1992).1

In preparing the Model Law, the Working Group noted that it would be useful to provide in

commentary additional information concerning the Model Law and at its twenty-ninth

session in February 1995 the Working Group prepared the draft Guide to Enactment of the

Model Law as well.2

The Commission, at its twenty-ninth session in 1996, agreed to change the title into

"UNCITRAL Model Law on Electronic Commerce" because the original title was too long,

and did not describe the content of the draft Model Law with sufficient clarity.3 And after

consideration of the text of the draft Model Law as revised by the drafting group, the

Commission adopted the UNCITRAL Model Law on Electronic Commerce.4

b. Status in Asia

Among Asian countries, legislation implementing provisions of the Model Law has been

adopted in: Brunei Darussalam (2000), China (2004), India (2000), Iran (Islamic Republic

of) (2004), Jordan (2001), Pakistan (2002), Philippines (2000), Republic of Korea (1999),

Singapore (1998), Sri Lanka (2006), Thailand (2002), United Arab Emirates (2006) and

Viet Nam (2005).5

c. Legislation of Republic of Korea

Framework Act on Electronic Commerce entered into force in Republic of Korea on July 1

1999 and has been amended several times. Basically the Framework Act has implemented

provisions of the Model Law but it also made some limitations and extensions.

1 A/51/17, Report of the United Nations Commission on International Trade Law on the work of its twenty‐ninth session, para. 55. 2 Ibid., paras. 60‐61. 3 Ibid., paras. 175‐177. 4 Ibid., para. 209. 5 Available from http://www.uncitral.org/uncitral/en/uncitral_texts/electronic_commerce/1996Model_status.html

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Framework Act on Electronic Commerce:

- Extends the sphere of application to all kinds of electronic transactions,6

- Provides the definition of Electronic Commerce: transaction wholly or partly made

in the form of data message,7

- Provides the independent legal effect of each data message received by the

addressee,8

- Does not tackle signature issue directly and leaves it to the Act on Electronic

Signature,9

- Provides general provisions on privacy and consumer protection, responsibility of

government and Electronic Commerce Mediation Committee.10

2. UNCITRAL Model Law on Electronic Signatures

a. Adoption

The draft UNCITRAL Model Law on Electronic Signatures was prepared by the Working

Group on Electronic Commerce at its thirty-seventh session in September 2000, 11

pursuant to decisions entrusting the Working Group with the preparation of uniform rules

on the legal issues of digital signatures and certification authorities taken by the

Commission at its twenty-ninth session in 1996 and thirtieth session in 1997.12

6 Framework Act on Electronic Commerce of Republic of Korea, article 1. 7 Ibid., article 2(5). 8Ibid., article 8. 9 Ibid., article 11. 10 Ibid., articles 12‐38. 11 A/56/17, Report of the United Nations Commission on International Trade Law on its thirty‐fourth session, para. 201. 12 A/CN.9/484, Report of the Working Group on Electronic Commerce on its thirty‐eighth session, para. 1.

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At its thirty-eighth session in March 2001, the Working Group prepared the draft Guide to

Enactment of the UNCITRAL Model Law on Electronic Signatures, based on a revised

draft prepared by the Secretariat.13

The Commission, at its thirty-fourth session in 2001, after consideration of the text

of the draft Model Law as revised by the drafting group and the draft Guide to Enactment

prepared by the Secretariat, adopted the UNCITRAL Model Law on Electronic Signatures

together with the Guide to Enactment of the Model Law.14

b. Status in Asia

Among Asian countries, legislation based on the UNCITRAL Model Law on Electronic

Signatures has been adopted in: China (2004), Thailand (2001), United Arab Emirates

(2006) and Viet Nam (2005).15

c. Legislation of Republic of Korea

Even though the UNCITRAL Secretariat has not been informed of Republic of Korea’s

legislation based on the Model Law, Act on Electronic Signature entered into force in

Republic of Korea on July 1 1999 and was amended in accordance with provisions of the

Model Law on April 1 2002.

Act on Electronic signature:

- Comprises both electronic signature and certified electronic signature16 based on

article 6 of the Model Law,

- Provides certification service provider17 based on article 9 of the Model Law.

13 A/56/17, Report of the United Nations Commission on International Trade Law on its thirty‐fourth session, para. 202. 14 Ibid., para. 284. 15 Available from http://www.uncitral.org/uncitral/en/uncitral_texts/electronic_commerce/2001Model_status.html 16 Act on Electronic signature of Republic of Korea, article 3.

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3. United Nations Convention on the Use of Electronic Communications in

International Contracts

a. Adoption

At its thirty-fourth session in July 2001, the Commission endorsed a set of

recommendations for future work that had been made by the Working Group on Electronic

Commerce at its thirty-eighth session in March 2001. They included the preparation of an

international instrument dealing with selected issues on electronic contracting and a

comprehensive survey of possible legal barriers to the development of electronic commerce

in international instruments.18

Working Group on Electronic Commerce began its deliberations on electronic contracting

at its thirty-ninth session in March 2002 and completed its work at its forty-fourth session

in October 2004.19

The Commission, at its thirty-eighth session in 2005, after considering the revised version

of the draft convention, which included the articles adopted by the Working Group at its

forty-fourth session, as well as the draft preamble and final provisions, 20 adopted by

consensus to submit to the General Assembly the draft convention on the use of electronic

communications in international contracts.21

b. Status in Asia

17 Ibid., article 4. 18 A/CN.9/571, Report of the Working Group on Electronic Commerce on the work of its forty‐fourth session (Vienna, 11‐22 October 2004), para. 1. 19 A/CN.9/577, Draft Convention on the Use of Electronic Communications in International Contracts, para. 1. 20 A/60/17, Report of the United Nations Commission on International Trade Law on the work of its thirty‐eighth session, para. 12. 21 Ibid., para. 167.

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Among Asian countries, China, Iran (Islamic Republic of), Lebanon, Philippines, Republic

of Korea, Saudi Arabia, Singapore and Sri Lanka have signed the Convention and

Singapore ratified the Convention.22

III. Current Work on Electronic Commerce

1. Background

At its forty-second session in July 2009, the Commission had heard a recommendation that

a study should be prepared on possible future work on the subject of online dispute

resolution in cross-border electronic commerce transactions, with a view to addressing the

types of e-commerce disputes that might be solved by online dispute resolution systems,

the appropriateness of drafting procedural rules for online dispute resolution, the possibility

or desirability to maintain a single database of certified online dispute resolution providers,

and the issue of enforcement of awards made through the online dispute resolution process

under the relevant international conventions. The Commission had agreed on the

importance of the proposals relating to future work in the field of online dispute resolution

to promote electronic commerce and requested the Secretariat to prepare a study on the

basis of proposals and to hold a colloquium on the issue of online dispute resolution.23

The Commission, at its forty-third session in 2010, agreed that a Working Group should be

established to undertake work in the field of online dispute resolution relating to cross-

border electronic commerce transactions, including business-to-business and business-to-

consumer transactions. It was also agreed that the form of the legal standard to be prepared

should be decided after further discussion of the topic.24

2. Deliberation Matters 22 Available from http://www.uncitral.org/uncitral/en/uncitral_texts/electronic_commerce/2005Convention_status.html 23 A/CN.9/WG.III/WP.104, para. 7. 24 A/CN.9/WG.III/WP.104, para. 11.

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From its twenty-second session in December 2010, the Working Group on Online Dispute

Resolution is supposed to consider the following matters in relation to its deliberations:

(a) Whether to recommend a set of generic rules of procedure for ODR;25

(b) Whether there should be access to courts for review, and if so, to which courts and

on what grounds;

(c) How is the “place of arbitration” determined and what relevance does it have;

(d) Ensuring security and confidentiality of communications and data, including

preventing improper disclosure to parties outside the process;

(e) Whether the legal standards dealing with ODR should incorporate existing

standards on electronic signatures;

(f) Principles applicable to the exchange of information electronically in the ODR

process, including technological neutrality, non-discrimination and functional

equivalence, as found in existing UN standards;

(g) What form of hearing, if any, would be appropriate for ODR;

(h) Recognition and enforcement of awards, in particular under the New York

Convention, including: defining place of arbitration; requirement for the arbitration

agreement to be in writing; written form and authentication of awards; and

(i) Whether the applicable law should be the law of the vendor’s State, the purchaser’s,

or some other law.26

3. ODR Examples of Republic of Korea

a. Electronic Commerce Mediation Committee 25 Encompassing such aspects as: consent to conciliate or arbitrate; requirements for an arbitration agreement; qualifications of conciliators and arbitrators; how conciliators and arbitrators are appointed (by the parties or otherwise); guidelines or a code of conduct for conciliators and arbitrators; standardized phases of the ODR process including negotiation, conciliation and arbitration; submission of documents; language of the proceedings; making settlement agreements; and expedited time limits for filing of documents and other matters related to costs and speed. 26 A/CN.9/WG.III/WP.105, para. 92.

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According to the Framework Act on Electronic Commerce, Republic of Korea has

established the Electronic Commerce Mediation Committee in 2000. The Committee is

composed of 50 mediators and the mediation is commenced when one party submit a

complaint to the Committee.27

Upon receiving the complaint, the Committee should make a proposal in 45 days.28 The

parties may terminate proceedings by accepting the proposal or by reaching settlement

agreement.29 In 2009, the Committee handled 3,307 cases by mediation.30

b. Judicial Conciliation

Korean Judiciary has established Judicial Conciliation System and many small claims

including electronic commerce dispute are handled by judges through Judicial Conciliation

System.31 Judicial conciliation may be accessed in two ways. The plaintiff may file a case

to the court asking for judicial conciliation.32 Alternately, even after the normal litigation

process has commenced, a judge may decide either on his own initiative or upon

application by a party to change from normal litigation to judicial conciliation if it is

considered to be necessary.33

Judicial conciliation can be presided over only by judges, sometimes with the assistance of

relevant experts.34 At an appropriate stage of the conciliation proceedings, one or more

third persons can be joined as a party.35 If the parties agree on a settlement of the dispute

during the judicial conciliation, the judges record the settlement in the form of a court

27 Framework Act on Electronic Commerce of Republic of Korea, article 33(1). 28 Ibid., article 33(2). 29 Ibid., article 35(1). 30 Available from http://www.ecmc.or.kr:8080/app/main 31 Judicial Conciliation of Civil Disputes Act, article 7. 32 Ibid., article 5. 33 Ibid., article 6. 34 Ibid., article 10. 35 Ibid., article 16.

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decision, which is final and binding on the parties.36 If the judicial conciliation fails, the

case returns to the normal litigation process.37

IV. Possible Future Work on Electronic Commerce

1. Electronic Single Window Facilities

a. Background

UNCITRAL Working Group on Electronic Commerce, after having completed its work on

the Convention on the Use of Electronic Communications in International Contracts,

requested the Secretariat to continue monitoring various issues related to electronic

commerce. 38 One area that the Secretariat has examined closely concerns legal issues

arising out of the use of single windows in international trade.

The Commission, at its forty-first session in 2008, expressed that the Secretariat should

engage in the study of the legal aspects involved in implementing a cross-border single

window facility, in cooperation with the World Customs Organization (WCO) and the

United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT), with

a view to formulating a comprehensive international reference document on legal aspects of

creating and managing a single window.39

The Secretariat established the WCO-UNCITRAL Joint Legal Task Force on Coordinated

Border Management Incorporating the International Single Window (the “Joint Legal Task

Force”). The first meeting of the Joint Legal Task Force took place from 17 to 21

November 2008 at the WCO in Brussels.40 An outcome of the meeting was consensus on

36 Ibid., articles 28‐29. 37 Ibid., article 36. 38A/CN.9/678, Possible future work on electronic commerce, para. 1. 39Ibid., para. 6. 40Ibid., para. 7.

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the desirability of harmonizing as much as possible the legal framework for single windows

with that applicable to business-to-business transactions.41

The Commission, at its forty-second session in 2009, stressed the importance of the work

of the Joint Legal Task Force and of the legal aspects of single window facilities for trade

facilitation. After discussion, the Commission requested the Secretariat to remain engaged

in the Joint Legal Task Force, to report periodically on its achievements and to convene a

Working Group session should the progress of work warrant it.42

The second meeting of the Joint Legal Task Force took place from 8 to 11 February 2010 at

the WCO in Brussels. The second Joint Legal Task Force agreed that the analysis of legal

issues arising from the implementation of single window facilities would greatly benefit

from the availability of reference models, prepared on the basis of documents such as

UN/CEFACT draft recommendation 35 and the APEC Single Window Implementation

Guide and Working Group Phase 2 Final Report, as well as of case studies.

At that meeting, certain legal issues were identified as suitable for further study in the near

future. Such issues included: legal validity of electronic communications, including via

mobile devices; identification, authentication and authorization, in particular in the context

of identity management; data use, retention and privacy; evidentiary value of electronic

records and other enforcement-related issues; and legal implications of the various

technical architectural options.43

The Commission, at its forty-third session in 2010, requested the Secretariat to continue its

active participation in the work on single windows carried out by the Joint Legal Task

Force and by other organizations with a view to exchanging views and formulating

recommendations on possible legislative work in that domain.44

b. Single Window System of Republic of Korea

41 Ibid., para. 9. 42A/64/17, Report of the United Nations Commission on International Trade Law, para. 340. 43 A/CN.9/692, Present and possible future work on electronic commerce, paras. 5‐8. 44 A/65/17, Report of the United Nations Commission on International Trade Law, paras. 243‐244.

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Since 2002, Republic of Korea has established internet-based Single Window System

which enables international traders to submit regulatory documents at a single entity.

Furthermore Republic of Korea has amended its relevant provisions of Customs Act

reflecting the Single Window System;

Article 327 (construction and Operation of Comprehensive Customs Duties Information

Network of Korea)

(1) The Commissioner of the Korea Customs Service may construct and operate the

comprehensive customs duties information network of Korea (hereinafter referred

to as the “Comprehensive Customs Duties Information Network of Korea”)

concerning electronic data-processing equipment and data base to promote

convenience of the electronic customs clearance and seek the facilitation of export

and import and the safety of trade through exchange of the customs information

with foreign customs. [Amended by Act No. 9261, Dec. 26, 2008]

(2) The head of customhouse may have a person declare, apply, report, pay, etc. under

this Act and apply for certification and confirmation of goods requiring permission,

approval or fulfillment of other conditions under Acts and subordinate statutes

(hereinafter referred to as “electronic declaration, etc.”) by making use of electronic

data-processing equipment of the Comprehensive Customs Duties Information

Network of Korea, as determined by the Commissioner of the Korea Customs

Service. [Newly Inserted by Act No. 9261, Dec. 26, 2008]

(3) The head of a customhouse may deliver, inform, notify, etc. (hereinafter referred to

as “electronic delivery”) on approval, permission, acceptance, etc. of electronic

declarations, etc. by making use of electronic data-processing equipment of the

Comprehensive Customs Duties Information Network of Korea, as determined by

the Commissioner of the Korea Customs Service. [Newly Inserted by Act No.

9261, Dec. 26, 2008]

(4) When an electronic declaration, etc. is filed, the related documents may be

submitted by making use of the electronic data-processing equipment of the

Comprehensive Customs Duties Information Network of Korea, or their submission

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may be omitted or simplified under the conditions as prescribed by the

Commissioner of the Korea Customs Service. [Amended by Act No. 6777, Dec. 18,

2002; Act No. 7009, Dec. 30, 2003; Act No. 9261, Dec. 26, 2008]

(5) An electronic declaration, etc. made pursuant to paragraph (2) shall be deemed to be

accepted by a customhouse when such electronic declaration, etc. is stored in the

electronic data-processing equipment prescribed by the Commissioner of the Korea

Customs Service and the electronic delivery shall be deemed to be made to any

person entitled to taking such delivery when the electronic delivery is input in the

computer designated by the person entitled to taking the delivery (when the

electronic delivery is stored in the electronic data-processing equipment of the

Comprehensive Customs Duties Information Network of Korea in cases where such

electronic delivery is stored in such electronic data-processing equipment of the

Comprehensive Customs Duties Information Network of Korea, as prescribed by

the Commissioner of the Korea Customs Service). [Amended by Act No. 6777,

Dec. 18, 2002; Act No. 9261, Dec. 26, 2008]

(6) The electronic delivery shall be made only when any person entitled to taking such

delivery applies for such electronic delivery under the conditions as prescribed by

Presidential Decree. [Newly Inserted by Act No. 6777, Dec. 18, 2002; Act No.

9261, Dec. 26, 2008]

(7) Notwithstanding the provision of paragraph (6), in the event that the electronic data-

processing equipment of the Comprehensive Customs Duties Information Network

of Korea breaks down or the grounds prescribed by Presidential Decree exist, such

electronic delivery may be made by means of delivery, a person or mail. [Newly

Inserted Act No. 6777, Dec. 18, 2002; Act No. 9261, Dec. 26, 2008]

(8) Necessary matters concerning the specific scope and methods of the electronic

delivery pursuant to paragraph (6) shall be prescribed by Presidential Decree.

[Newly Inserted by Act No. 6777, Dec. 18, 2002; Act No. 9261, Dec. 26, 2008]

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Article 327-2 (Designation, etc. of Business Operator Operating Comprehensive Customs

Duties Information Network of Korea)

(1) The Commissioner of the Korea Customs Service may designate a person who

operates the whole or part of the Comprehensive Customs Duties Information

Network of Korea (hereinafter referred to as the “business operator operating the

Comprehensive Customs Duties Information Network of Korea”) pursuant to the

standards and procedure prescribed by the Presidential Decree for the efficient

operation of the Comprehensive Customs Duties Information Network of Korea.

(2) Any person falling under any of the following subparagraphs shall not be

designated under paragraph (1):

1. A person falling under any of subparagraphs 2 through 5 of Article 175;

2. A person for whom two years have not been passed from the data when the

declaration cancelled pursuant to paragraph (4);

3. A corporation where a person falling under subparagraph 1 or 2 holds office as

an executive

(3) The Commissioner of the Korea Customs Service may, if necessary for the efficient

operation of the Comprehensive Customs Duties Information Network of Korea,

subsidize funds necessary for its operation to a business operator operating the

Comprehensive Customs Duties Information Network of Korea.

(4) The Commissioner of the Korea Customs Service may, when a business operator

operating the Comprehensive Customs Duties Information Network of Korea

designated pursuant to paragraph (1) falls under any of the following

subparagraphs, cancel the designation or order the suspension of the whole or part

of the operation of the Comprehensive Customs Duties Information Network of

Korea by setting a period not exceeding one year: Provided, That when the

business operator falls under subparagraph 1 or 2, the designation shall be

cancelled:

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1. When he/she falls under any of the subparagraphs of paragraph (2);

2. When he/she has been designated pursuant to paragraph (1) by deceit or other

unjust means;

3. When he/she fails to meet the standards under paragraph (1);

4. When he/she has violated the guidance or supervision of the Commissioner of

the Korea Customs Service pursuant to paragraph (7).

(5) The Commissioner of the Korea Customs Service may, where the suspension of

business under paragraph (4) is feared to cause serious inconvenience to its users or

to harm public interests, impose a penalty surcharge not exceeding 100 million

won in lieu of the disposition of the suspension of business. In such cases, matters

regarding the amount of a penalty surcharge, etc. according to kind, degree, etc. of

an offense on which a penalty surcharge is imposed shall be prescribed by

Presidential Decree.

(6) When a person liable to pay a penalty surcharge pursuant to paragraph (5) has failed

to pay it by the time limit for its payment, Article 26 shall apply mutatis mutandis.

(7) The Commissioner of the Korea Customs Service shall guide and supervise a

business operator operating the Comprehensive Customs Duties Information

Network of Korea concerning the operation of the Comprehensive Customs Duties

Information Network of Korea.

[This Article Newly Inserted by Act No. 9261, Dec. 26, 2008]

Article 327-3 (Designation of Electronic Document Brokerage Operators, etc.)

(1) Any person who runs the telecommunications business in accordance with Article 2

(1) 1 of the Telecommunications Business Act and intends to run the electronic

declaration and electronic delivery brokerage (hereinafter referred to as “electronic

document brokerage”) shall get his/her intended business designated by the

Commissioner of the Korea Customs Service according to the standards and

procedures prescribed by the Presidential Decree. [Amended by Act No. 8136,

Dec. 30, 2006; Act No. 9261, Dec. 26, 2008]

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(2) Any person falling under any of the following subparagraphs shall be prohibited

from getting his/her business designated under paragraph (1):

1. Any person who falls under any of subparagraphs 2 through 5 of Article 175;

2. Any person for whom two years have not elapsed from the date on which the

designation of his business was revoked in accordance with paragraph (3);

3. Any corporation that employs any officer falling under subparagraph 1 or 2.

(3) When any person who has had his business designated under paragraph (1)

(hereinafter referred to as “electronic document brokerage operator”) falls under

any of the following subparagraphs, the Commissioner of the Korea Customs

Service may revoke the designation of his business or order his electronic

document brokerage suspended in whole or in part for a fixed period of not more

than one year: Provided, That if he falls under subparagraphs 2 or 3, the

designation of his business shall be revoked: [Amended by Act No. 9261, Dec. 26,

2008]

1. When he falls under any of subparagraphs of paragraph (2);

2. When he has his business designated under paragraph (1) in a fraudulent or

illegal means;

3. When he fails to meet the standards provided for in paragraph (1);

4. When he violates the guidance or supervision of the Commissioner of the Korea

Customs Service pursuant to paragraph (7).

(4) In the event that the suspension of electronic document brokerage under paragraph

(3) causes significant inconveniences to clients or is feared to harm the public

interest, the Commissioner of the Korea Customs Service may impose penalty

charges of not more than 100 million won in lieu of the disposition taken to

suspend the electronic document brokerage. In this case, necessary matters

concerning the amount of penalty charges imposed according to the types and

extent of the act of violation, etc. shall be prescribed by Presidential Decree.

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(5) In the event that any person liable to pay penalty charges under paragraph (4) fails

to pay such penalty charges by the set time, the provisions of Article 26 shall apply

mutatis mutandis thereto.

(6) Any electronic document brokerage operator may levy necessary charges, including

fees, on any person who is provided with electronic document brokerage service

under the conditions as prescribed by the Ordinance of the Ministry of Strategy and

Finance. [Amended by Act No. 8852, Feb 29, 2008]

(7) The Commissioner of the Korea Customs Service shall guide and oversee electronic

document brokerage operators in connection with their business.


Article 327-4 (Security of Relevant Information, including Electronic Documents)

(1) Any person shall be prohibited from forging or altering relevant information,

including electronic documents, stored in the electronic data-processing equipment

of the Comprehensive Customs Duties Information Network of Korea or any

electronic document brokerage operator or using such forged or altered information.

[Amended by Act No. 9261, Dec. 26, 2008]

(2) Any person shall be prohibited from damaging or violating the confidentiality of the

relevant information, including electronic documents, stored in the electronic data-

processing equipment of the Comprehensive Customs Duties Information Network

of Korea or any electronic document brokerage operator. [Amended by Act No.

9261, Dec. 26, 2008]

(3) An executive or employee, or a former executive or employee, any business

operator operating the Comprehensive Customs Duties Information Network of

Korea or any electronic document brokerage operator shall be prohibited from

leaking or stealing the confidential electronic documents and the relevant

information that he has learned while performing his duties. [Amended by Act No.

9261, Dec. 26, 2008]

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(4) In the application of the penal provisions of the Criminal Act and other Acts,

executives or employees of a business operator operating the Comprehensive

Customs Duties Information Network of Korea or an electronic document brokerage

operator shall be deemed public officials. [Amended by Act No. 8136, Dec. 30,

2006; Act No. 9261, Dec. 26, 2008]


Article 327-5 (Standards for Electronic Documents)

The Commissioner of the Korea Customs Service may determine the standards for

electronic documents concerning the electronic declaration, etc. and electronic delivery for

the efficient exchange of the customs information among countries pursuant to Article 255-

3 in consideration of the matters prescribed by international organizations, such as the

World Customs Organization.


2. Electronic Transferable Records

a. Background

The Commission, at its forty-second session in 2009, agreed on the importance of the

proposals relating to future work in the fields of electronic transferable records but also

noted that limited elements of commonality in the different records and rights transferred

would not support immediate work at the working group level. Thus, the Commission

indicated that further information was needed in order to fully assess the scope and mandate

of possible future work on those issues by Working Group on Electronic Commerce.45

The Commission, at its forty-third session in 2010, noted that the use of electronic

communications in international trade had gained further acceptance, including with respect

to the use of registries for the creation and transfer of rights. The Commission took note of

45 A/64/17, Report of the United Nations Commission on International Trade Law, para. 341.

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a detailed description 46 of the recently enacted legislation of the Republic of Korea

enabling the use of electronic bills of lading based on a designated registry operator

approach.47

b. Relevant Provisions of Commercial Act of Republic of Korea

1. Article 352-2 (Electronic Register of Shareholders)

(1) Each company may prepare its register of shareholders in an electronic

document (hereinafter referred to as “electronic register of shareholders”), as

determined by the article of incorporation.

(2) Electronic registers of shareholders shall contain e-mail addresses, in addition

to the particulars to be entered under Article 351 (1).

(3) Matters necessary concerning the methods of keeping, announcing and

perusing the electronic register of shareholders shall be prescribed by

Presidential Decree.

[This Article Newly Inserted by Act No. 9746, May 28, 2009]

2. Article 862 (Electronic Bill of Lading)

(1) A carrier may issue an electronic bill of lading by means of registration with

the registry agency designated by the Minister of Justice with the consent of a

consignor or a charterer in lieu of issuance of a bill of lading referred to in

Article 852 or 855. In such cases, an electronic bill of lading shall have the

same legal effect as a bill of lading referred to in Article 852 and 855.

(2) Information of all the subparagraph of Article 853 (1) shall be included in an

electronic bill of lading and it shall come into effect when a carried has

transmitted with his electronic signature thereon and a charterer or a consignor

has received it.

46 A/CN.9/692, Present and possible future work on electronic commerce, paras. 26‐47. 47 A/65/17, Report of the United Nations Commission on International Trade Law, para. 246.

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(3) A holder of a right of an electronic bill of lading may transfer such right in a

way that he draws up an electronic document stating the intention of

endorsement, attaches an electronic bill of lading thereto, and transmits them to

other party through the designated registry agency.

(4) If other party has received an electronic bill of lading in which the intention of

endorsement is stated according to the method prescribed by paragraph (3), it

has the same effect as delivery of a bill of lading of Article 852 and 855 with

endorsement, and a holder of a right who has received an electronic document

of paragraphs (2) and (3) shall acquire the same right as a holder who has

received a bill of lading of Articles 852 and 855.

(5) Designation requirements of a registry agency of electronic bill of lading,

electronic method of issuance and endorsement, specific receiving procedure of

cargo and other necessary matters shall be prescribed by Presidential Decree.

[This Article Wholly Amended by Act No. 8581, Aug. 3, 2007]

3. Identity Management

The Commission, at its forty-third session in 2010, took note of the information regarding

the notion of identity management system, its business model, processes and main actors as

well as potential benefits. The Commission noted that identity management raised several

relevant legal issues and that calls had been made for compiling a set of uniform legal rules

to address such issues.48

4. Use of Mobile Devices in Electronic Commerce

With respect to the use of mobile devices in electronic commerce,49 the Commission, at its

forty-third session in 2010, agreed that communication via mobile devices could be

regarded as a subset of electronic communications as dealt with in relevant legislative

standards adopted by UNCITRAL. The Commission further agreed that the predictability 48 Ibid., para. 248. 49 A/CN.9/692, Present and possible future work on electronic commerce, paras. 67‐74.

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of the legal status of transactions conducted with mobile devices would be greatly enhanced

by the adoption of appropriate legislation.50

V. Conclusion

The increased use of electronic communication improves the efficiency of commercial

activities, enhances trade connections and allows new access opportunities for previously

remote parties and markets, thus playing a fundamental role in promoting trade and

economic development, both domestically and internationally.

In view of the urgent need for the introduction of the legal rules that would bring certainty

and predictability to the international regime governing internet-based or other electronic

commerce transactions, it was expressed that UNCITRAL should initially focus its

attention on issues raised by electronic commerce.

UNCITRAL has taken great role for this purpose and its texts on electronic commerce have

become the most influential standard for legislation in this area and its wide

implementation has helped to promote an important degree of international harmonization.

A large number of Asian countries have already taken domestic measures in that direction

by adopting legislation that affirms the legal value of electronic communications and sets

the criteria for their equivalence to paper-based ones.

Wide ratification of the United Nations Convention on the Use of Electronic

Communications in International Contracts would provide even greater harmonization, by

offering a particular set of rules for international transactions.

50 A/65/17, Report of the United Nations Commission on International Trade Law, para. 249.

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