Introduction – Legal Readiness Checklist

1. The checklist serves to identify potential legal gaps and highlight what may need to be done to ensure the laws support engagement in cross-border paperless trade, as envisaged in the Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific, which was adopted by the Economic and Social Commission for Asia and the Pacific (ESCAP) in 2016.
2. It should be noted that the checklist is not intended to assess the readiness of a country to join the Framework Agreement. This treaty contemplates that its parties ensure that their legal systems support the use of electronic communications and gradually adapt their laws for the purpose of cross-border paperless trade. It is not necessary for Governments to modernize their laws before ratifying or acceding to the Agreement. Paperless trade implementation is a work in progress, and the Agreement is a tool meant to support such progress regardless of the level of readiness of a country.
3. In line with the substantive provisions of the Framework Agreement, the checklist organizes legal issues into four major parts as follows: (a) electronic transactions and signatures law; (b) laws regarding paperless trade systems; (c) cross-border aspects; and (d) other considerations. Each part is divided into sections. In each part and section of the checklist, key legal issues are highlighted, and a list of focus questions is proposed.
4. The checklist is intended for use by all stakeholders involved in paperless trade facilitation and not only for legal specialists. While it includes references to legal concepts, it does so in general terms in order to reach a broad audience. Each question should be seen as the starting point for a broader reflection on the state of the law in the given area.
5. The term “law” should be understood to include statutes, regulations, administrative measures and any other binding rules. All questions about national laws can be applied to subnational laws as appropriate. In completing the checklist, it is recommended that the user indicate, where possible, the legal authority for the answers, for example the statute, regulation or other rule relevant to the answers. Some relevant obligations may arise through contracts as well.
6. A number of examples of country reports on readiness assessments for cross-border paperless trade carried out by ESCAP are also available online. In addition, a general introduction on legal issues related to cross-border paperless trade may be found in the ESCAP publication Electronic Single Window Legal Issues: A Capacity-Building Guide.

I. Electronic transactions and signature law

1. Part I of the checklist is focused on laws related to electronic transactions and electronic signatures. These concerns are addressed either directly or indirectly in articles 5, 6 and 7 of the Framework Agreement. In particular, the first three principles included in article 5 (on general principles) represent the principles guiding the legislative texts on electronic commerce prepared by the United Nations Commission on International Trade Law (UNCITRAL) and, as such, are an expression of international consensus. Approximately half of the Governments in Asia and the Pacific have adopted at least one UNCITRAL text on electronic commerce.
2. In order to promote interoperability, to the extent possible similar rules should apply to electronic communications exchanged among commercial operators and between commercial operators and public authorities. In the paperless trade facilitation environment, this means that trade-related data exchanged in commercial documents may be reused for submission to single windows. This should ensure high data quality with respect to its origin, integrity, accuracy, completeness and other characteristics.

Related provisions of the Framework Agreement:

• Article 5 on general principles.
• Article 6 on the national policy framework, enabling domestic legal environment and paperless trade committee.
• Article 7 on the facilitation of cross-border paperless trade and development of single-window systems (more specific questions on the single window appear below in part II).

II. Laws regarding paperless trade system

1. Part II of the checklist is focused on laws related to implementing and developing a paperless trade system (including but not limited to a single window system). These matters relate in particular to articles 6 and 7 of the Framework Agreement. The wide scope of article 6 can encompass several aspects of creating an enabling national policy framework for paperless trade. In article 7, parties are specifically encouraged to implement and develop a cross-border paperless trade system, in particular a single window. Accordingly, in part B, issues related to the implementation of a single window and/or other paperless trade system(s) are covered first. Part II also includes questions on end-user agreements, service-level agreements and memorandums of understanding on paperless trade.

Related provisions of the Framework Agreement:

• Article 6 on the national policy framework, enabling domestic legal environment and paperless trade committee.
• Article 7 on the facilitation of cross-border paperless trade and development of single-window systems.

III. Cross-border aspects

1. Part III of the checklist is focused on the cross-border aspects of paperless trade, which directly relate to the ultimate goal of the Framework Agreement. Certain cross-border aspects are already raised in part I as they relate to general matters that may be relevant to paperless trade facilitation. The questions in part III are specific to cross-border paperless trade facilitation. They are inspired by the Agreement, in particular article 8 on cross-border mutual recognition of trade-related data and documents in electronic form; article 9 on international standards for exchange of trade-related data and documents in electronic form; and article 10 on the relation to other legal instruments enabling cross-border paperless trade.
2. A key issue in achieving seamless cross-border paperless trade is the legal recognition of trade-related data and documents of one country by the authorities of another. Recognition involves attributing a legal status to electronic messages exchanged across borders. A variety of legal mechanisms may achieve that goal. Some of them will apply to certain types of transactions (for instance, business-to-business or business-to-government transactions), while other legal mechanisms will apply only to specific types of documents or data sets, or to specific types of trust services (for example, electronic signatures). Some legal mechanisms will establish legal recognition in a technology-neutral manner, or without regard for the method or technology used, while others will do so in a technology-specific manner. With respect to legal form, some mechanisms are treaty-based and therefore may be directly legally binding. Other mechanisms favour the harmonization of legal systems through the adoption of uniform laws, while still others are based on bilateral or regional agreements or memorandums of understanding and similar technical arrangements.
3. In article 8 of the Framework Agreement, the mutual legal recognition of trade-related data and documents in electronic form is promoted and the notion of substantially equivalent level of reliability is used to indicate that mutual legal recognition can be based on the general principle of technology neutrality. However, no specific legal recognition mechanism is established. Rather, the expression of this criterion is left open to various options. Accordingly, many of the questions in part III are aimed at identifying which laws and technical arrangements may contribute to achieving mutual legal recognition. The scope of the questions also extends to include the broader focus of articles 9 and 10 on laws and other relevant agreements that prohibit, restrict or facilitate cross-border data flows for paperless trade and any related activity. An indicative list of relevant international instruments is provided at the end of part III for ease of reference.

Related provisions of the Framework Agreement:

• Article 8 on cross-border mutual recognition of trade-related data and documents in electronic form.
• Article 9 on international standards for exchange of trade-related data and documents in electronic form.
• Article 10 on relation to other legal instruments enabling cross-border paperless trade.

IV. Other considerations

1. For paperless trade to be conducted in the best possible manner, the Framework Agreement requires parties to create an enabling national legal framework (article 6) and remove all legal barriers. It is therefore recommended that the parties aim to build a national policy framework to implement the Agreement that addresses all the pertinent legal issues and is consistent with international legal instruments and standards for cross-border electronic data and document exchange. Besides the topics specifically addressed in substantive provisions of the Agreement, parties may also wish to deal with related issues, such as data ownership, liability, dispute settlement, electronic payment and competition, which in some cases may have been addressed in other legal agreements (see article 10). These matters may affect the effective operation of single window and other paperless trade systems, particularly in the cross-border environment.
2. These legal issues may be addressed in different sets or sources of legal rules. Therefore, there is no one-size-fits-all solution or approach. The legal framework, action plan and capacity-building programmes may and should be customized at the national level, depending on the various levels of awareness and preparedness of different member States, as already envisaged in article 6, 12 and 14 of the Framework Agreement. The list of legal issues in part IV is not exhaustive, and other relevant issues may emerge.

Related provisions of the Framework Agreement:

• Article 6 on the national policy framework, enabling domestic legal environment and paperless trade committee.
• Article 10 on the relation to other legal instruments enabling cross-border paperless trade. 
• Article 12 on the action plan.
• Article 14 on capacity-building.