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Seventh Inter-American Specialized Conference on Private
International Law
Topics |
�
Proposals
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PERMANENT COUNCIL OF THE
ORGANIZATION OF AMERICAN
STATES COMMITTEE ON
JURIDICAL AND POLITICAL
AFFAIRS |
OEA/Ser.G
CP/CAJP-2094/03 add. 7
26 February 2004
Original: English |
SELECTION OF TOPICS FOR
THE AGENDA OF THE SEVENTH
INTER-AMERICAN SPECIALIZED
CONFERENCE ON PRIVATE
INTERNATIONAL LAW (CIDIP-VII)
(Reply from the Permanent
Mission of the United
States)
Permanent Mission of the
united states
to the
Organization of American
States
The Permanent Mission of the
United States of America to
the Organization of American
States presents its
compliments to the
Ambassador of Panama, as
Chair of the Committee on
Juridical and Political
Affairs, the General
Secretariat and the
Secretariat for
International Legal Affairs,
and, pursuant to Resolution
AG/RES. 1923(XXXIII-0/03),
is pleased to propose the
following topics for the
agenda of the upcoming
Seventh Inter-American
Specialized Conference on
Private International law (CIDIP-VII).
In making these proposals,
the Mission would note that
it believes that it is
important that such topics
be selected on the basis of
regional needs and the
background of the States of
the Americas, and not
necessarily be limited by
what has been done or may be
done in other bodies,
especially when the latter
may be focused more on other
regions and not the
Americas, or where the
States of the Americas are
not as fully involved in
those bodies as they may be
in the work of the
Organization of American
States.
Bearing in mind the
important progress made at
the last Specialized
Conference on Private
International Law (CIDIP-VI)
that concluded its work in
February 2002, we would
propose two related economic
enhancement projects for
CIDIP-VII that would extend
that work. We take into
account that fact that at
the conclusion of CIDIP-VI,
almost all States which made
proposals for future work
listed one topic in common,
i.e. electronic commerce.
We would therefore propose
the following two topics,
which can be pursued
separately or as parts of an
overall project on
electronic commerce, each of
which can have very
significant value for OAS
States in all regions:
-- First, new uniform rules
on cross-border investment
securities transactions
should be formulated, which
could be acceptable in model
law form but may be most
useful in the form of an
Inter-American treaty. This
could cover the electronic
creation of investment
securities (stocks, bonds,
etc.), their registration,
pledge, clearance and
settlement of transactions
and related transaction
rights, as well as the
rights and responsibilities
of securities intermediaries
and of other holders of
rights in these securities.
This subject has become very
important over the last
several years because of the
growth of securities
transactions across borders
via computers, and adoption
of modern private law in
this area can have very
substantial effects on
liquidity of collateral and
investments in all States.
It can also link
transactions between States
throughout the hemisphere,
and in sub regions as well.
The economic importance of
this topic cannot be
overstated.
-- Secondly, rules should be
formulated in the form of an
Inter-American Treaty,
although a model law would
also be acceptable if
preferred by other States,
to provide for electronic
filings, searches and
certifications in connection
with local or regional
electronic commercial
registries. This could
cover matters such as
secured financing and other
transactions, which could
then be recognized across
the borders of all
participating States. This
would modernize such
transactions for the
computer age and enhance the
economic performance in all
States that participate. It
would in addition implement
the new Inter-American Model
Law on Secured Finance,
which was adopted recently
at CIDIP-VI.
Both of these proposed
topics, which as noted above
can be separate projects or
parts of one overall
electronic commerce topic,
are now important because of
the need for capital market
growth and new sources of
investment in all States.
They reflect the
efficiencies and growth that
computer assisted
transactions can produce,
especially with regard to
cross-border commerce.
-- In addition, and as part
of the above topics, we
would propose that the draft
Inter-American Rules on
Electronic Documents and
Signatures, which had
substantial support at CIDIP-VI,
but were not adopted due to
time constraints, be again
reviewed and finalized as
model rules. These rules
incorporate some work done
in other bodies, but are
formulated to take into
account the applications to
commerce in the Americas.
The Mission has noted with
interest the several
proposals for work on
international private law in
areas other than economic
development, and CIDIP-VII
can accommodate a range of
possible topics. We would
be pleased to discuss the
details of those proposals.
CIDIP-VII offers a basis for
the Organization of American
States to enhance the
quality of economic and
social development in our
hemisphere, and we welcome
the opportunity to support
that effort.
Additional details on the
proposals stated above are
set out in an addendum.
The Permanent Mission of the
United States of America to
the Organization of American
States avails itself of this
opportunity to convey to the
Ambassador of Panama, as
Chair of the Committee on
Juridical and Political
Affairs, the General
Secretariat and the
Secretariat for
International Legal Affairs
its renewed assurances of
its highest consideration.
Washington, DC
February 26, 2004
ADDENDUM TO PROPOSALS FOR
THE AGENDA OF CIDIP VII
BY THE MISSION OF THE UNITED
STATES OF AMERICA
First Proposal for CIDIP
VII.
Harmonization and
Modernization of Securities
Ownership, Transfer and
Pledge Laws
A movement in
many countries is underway
to harmonize and modernize
commercial laws that govern
the ownership, transfer and
pledge of investment
securities. Investment
securities (Titulos Valores,
Valores Bursatiles o Valores
Mobiliarios in Spanish and
Valores in Portuguese)
transactions are now
increasingly global and very
commonly flow between States
of the Americas, where laws
support that movement, and
are conducted in a manner
that local law could not
have visualized even 15
years ago.
A wide
disparity now exists among
countries in the hemisphere
with respect to the law
governing these
transactions. To the extent
that these laws and
practices do not work well
with newer standards and
electronic methods of doing
business, the country in
question as well as its
debtors, creditors,
investors and underwriters
do not gain comparable
access to international
sources of liquidity. Even
safe and attractive
government bonds or private
evidences of interests such
as securities are often
today not able to be placed
or pledged from a number of
countries in the region in
the international
marketplace, except with a
substantial discount and
loss of potential value,
simply because they were
issued or transferred only
in a paper-based mode, or
their laws do not support or
leave uncertain the validity
of the movement of
electronic interests.
Consultations on such an
effort has been undertaken
by the National Law Center
for Inter-American Free
Trade (NLCIFT) involving
financial associations and
commercial sectors in
various countries of the
OAS. The project would be
to prepare a draft Treaty
for consideration by the OAS
CIDIP-VII, which would cover
the creation, transfer,
pledge and extinction of
rights in investment
securities in Latin America,
the Caribbean and North
America. Of special
interest is the cross-border
pledging of paperless
securities and its governing
law, including bankruptcy
provisions. Preliminary
research indicates that
existing law in the Americas
could be harmonized to
handle:
a) the creation, holding,
transfer and extinction of
entitlements in investment
securities other than by
their �original� or
�historical� owners;
b) the creation of security
interests in entitlements
(as contrasted with rights
of ownership), as well as
rules related to priority,
reduced formalities,
proceeds, substitution,
reuse, re-hypothecation,
top-up and closeout;
c) the legal status of and
rights and duties created by
clearing corporations,
intermediaries, entitlement
holders and issuers;
d) the insolvency of debtors
holding entitlement rights
in investment securities, as
well as of intermediaries,
and corresponding rights of
creditors, including issues
such as no-stay rules,
preference, segregation,
avoidance and fraudulent
conveyance; and
e) choice of law rules
applicable to cross-border
transactions.
The goal
would be to take advantage
of proven systems and
principles and create a
harmonized set of effective,
yet simple and adaptable,
treaty rules for each
jurisdiction to implement.
Such a project would build
on work completed at the
Hague Conference on the new
Convention on Law Applicable
to Securities Intermediaries
as well as work at the study
phase of Unidroit which
involves some, but not all
of the issues outlined
above. The proposed OAS
CIDIP project would have a
scope wider than that of the
work in the above
organizations, and will
focus on developments
relevant to the
Inter-American markets and
trade arrangements.
Second Proposal for CIDIP
VII.
Cross-Border Rules on
Recognition of Electronic
Registries and Filings
This topic could form a
sub-topic along with that
described above as an
overall topic on electronic
commerce, or be pursued
separately. This sub-topic
should be the formulation of
Inter-American rules in
treaty form that will make
it possible to give full
faith and credit to
electronic filings,
searches, cancellations of
recordings and
certifications of the above
in electronic commercial
registries. The principles
could be applied to land and
other registries at the
option of participating
States. This topic is of
enormous importance for new
developments in cross-border
arrangements and the flow of
commercial finance, and
would facilitate the
securitization of mortgage
or trust deeds (fideicomisos
de garantia) backed assets.
It would also provide
effective implementation of
the CIDIP-VI Inter-American
Law of Secured Transactions,
for those States or
subregions that adopt its
provisions.
The rules that would be
formulated would make
possible the operation of
one or more electronic
registry systems that would
operate in similar or
compatible fashion among
participating States in the
Americas, and would
facilitate the operations of
regional credit markets by
allowing filings of security
interests from anywhere
amongst participating
States, as well as searches,
issuances of certificates of
liens or lack thereof,
cancellations and so on.
Part of this sub-topic would
be basic rules on the
enforcement of filings,
amendments and cancellations
on a reciprocal basis
throughout the hemisphere.
Registrations by computer,
which are searchable in any
participating State, have
been demonstrated to sharply
lower the costs and risk
attendant to granting
financing commitments backed
by assets or interests in
another jurisdiction of the
Americas. The combination
of such rules, which would
support development of
computer-based
registries, together with
the rules of the new OAS
Model Law on Secured
Finance, would enhance
access to finance by all
levels of business
entities. This would
clearly affect medium and
smaller entities, as well as
larger entities, which can
promote a broader base of
business development, which
in turn directly affect
capacity building in
countries for whom that is
an important goal.
Additional
Component of the above
Topics.
Adoption of the
Inter-American Rules on
Electronic Documents and
Signatures
Among the recommendations of
CIDIP VI was that member
nations consider the
adoption of the United
Nations Model Law on
Electronic Commerce (MLEC)
and the United States
Delegation�s proposal of
Inter-American Rules for
Electronic Documents and
Signatures (IAREDS). The
IAREDS draw on the work of
other bodies, and had wide
support at CIDIP-VI. As
part of the above topics,
these rules should be again
reviewed and adopted as
recommendations to States so
that modernization of
e-commerce law may be
promoted in a harmonized
fashion, particularly since
some countries of the OAS
have been examining IAREDS
for possible adoption and
private sector organizations
have begun referring to it
in their transactions.
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