Survey of international commercial law developments during 2003

Survey of international commercial law developments during 2003

International community during 2003

This Article surveys the significant progress made by the international community during 2003 in its efforts to modernize and harmonize international commercial law. The international bodies spearheading these efforts include the United Nations Commission on International Trade Law (UNCITRAL or the “Commission”), the Organization of American States (OAS), the Hague Conference on Private International Law (the “Hague Conference”), and the International Institute for the Unification of Private Law (UNIDROIT). UNCITRAL acts primarily through its six working groups, which typically meet bi-annually and are responsible for the substantive preparatory work on topics approved by the Commission. The OAS is a regional international organization for states in the Western Hemisphere and since 1975 has sponsored five Specialized Conferences on Private International Law (each a “CIDIP”). The Hague Conference holds Plenary Sessions every four years. Special Commissions consisting of governmental experts prepare the preliminary drafts of the private international law conventions that are eventually discussed and adopted at a Plenary Session. UNIDROIT uses study groups to prepare preliminary draft conventions. The Secretariat then convenes a committee of governmental experts (representatives of UNIDROIT Member States) to prepare the final draft of the Convention for submission to a diplomatic Conference.


During 2003, Working Group I (Privately Financed Infrastructure Projects) (“Working Group I”) completed its Model Legislative Provisions on Privately Financed Infrastructure Projects, which are intended to compliment and build upon its Legislative Guide on Privately Financed Infrastructure Projects (the “Legislative Guide”). (1)

Draft model legislative provisions were initially proposed to the Commission in 2000. The purpose of the model legislative provisions is to help domestic legislators in creating a legal framework favorable to private investment in infrastructure development. (2) During the September 2002 meeting, Working Group I approved a revised version of the model legislative provisions for circulation to States for comment and to the Commission for its review and adoption in July 2003. (3) The model provisions provide specific rules covering a wide range of activities associated with infrastructure development including rules governing the selection of the concessionaire, bidding procedures and consortia participation, procedures for requesting and evaluating proposals, negotiation of concession agreements, construction and operation of infrastructure and duration, extension and termination of the concession agreement. (4)

The Commission finalized the model legislative provisions during its 36th Session in July 2003. The Commission took comments from session attendees and submitted any modifications it made to a drafting group for preparation of the final model legislative provisions. After incorporating these changes, the Commission adopted the final UNCITRAL Model Legislative Provisions on Privately Financed Infrastructure Projects on July 7, 2003. (5) The U.N. General Assembly recognized the Model Legislative Provisions on December 9, 2003, recommending that all member states consider them “when revising or adopting legislation relat[ing] to private participation in the development and operation of public infrastructure.” (6)

Working Group I will meet again in October 2004, subject to the approval of the Commission during its 37th Session in June 2004, to review proposals from the secretariat on addressing emerging issues in public procurement law. (7)


During 2003, Working Group II (International Arbitration and Conciliation) (“Working Group II”) worked primarily on the issue of interim measures of protection in connection with arbitration. (8) It also discussed a provision on the power of courts to order ex parte interim measures in support of arbitration, however, no consensus on the issue was reached. (9)

At its thirty-eighth session in May 2003, Working Group II discussed a draft enforcement provision concerning recognition and enforcement by courts of interim measures of protection issued by an arbitration tribunal. That draft provision was further developed in both the thirty-ninth and fortieth session as a new Article 17 of the UNCITRAL Model Law on International Commercial Arbitration. (10) Working Group II also considered a revised version of Article 17 of the model law, concerning the power of arbitral tribunals to grant interim measures of protection on the suggestion of States that it be harmonized with the New York Convention. (11)

Although the priority during 2003 was the issue of interim measures, Working Group II also continued its discussion of a revision of Article 7, paragraph (2) of the UNCITRAL Model Law on International Commercial Arbitration. (12)


Working Group III (Transport Law) (“Working Group III”) met in March and October of 2003 to further its efforts to prepare a draft instrument on the international carriage of goods. At both meetings, Working Group III reviewed and discussed a recently drafted instrument on the carriage of goods, with considerable discussion of expansion of the instrument to consider multiple forms of transport in light of the benefits of a door-to-door instrument. (13) In light of the expanded scope of the project, Working Group III participants include various international organizations involved in land transportation. Working Group III will continue to meet in two-week sessions.


Working Group IV (Electronic Commerce) (“Working Group IV”) continued its progress toward addressing legal barriers to the development of electronic commerce in international trade-related instruments by considering a draft convention on International Contracts Concluded or Evidenced By Data Messages. (14) Working Group IV met in May 2003 to discuss Articles 1-11 and November 2003 to discuss Articles 8-15. In particular, Working Group IV considered whether intellectual property rights should be excluded from its general consideration of how solutions for electronic contracting might impact the draft convention. (15)

Working Group IV continued to debate the scope of the draft convention, especially in light of comments submitted by the International Chamber of Commerce, which argued that an international convention was not the best solution. (16) However, the Commission suggested that work continue, but did not preclude the choice of another form at a later time. (17)


Working Group V (Insolvency Law) (“Working Group V”) met in February and September of 2003, and in March of 2004. At its September 2003 meeting, Working Group V presented its long-awaited model legislative guide on insolvency law to the Commission for preliminary consideration. (18) The Commission considered the draft guide in 2003, and approved it “in principle,” pending few alterations. (19) The Commission presented the model guide to the Secretariat for distribution among the Member States, intergovernmental and non-governmental international organizations, and industry experts for comments. In January 2004, the Secretariat distributed its own comments on the model guide. (20) The Commission is expected to consider the model guide for finalization and adoption in June and July 2004 at its thirty-seventh session. (21)

At its March 2004 meeting, the Working Group intended to finalize the legislative guide, in order to have the guide ready for consideration for final adoption by the UNCITRAL at its June-July 2004 session. (22)


Working Group VI (Security Interests) (“Working Group VI”) met in September 2003 and March 2004. As noted last year, the Working Group is working to comply with the Commission’s request that it prepare a model legislative guide on secured transactions, (23) and at its March 2004 meeting, Working Group VI considered proposed chapters of the model guide.

Working Groups V and VI also held joint sessions in March 2004. The Working Groups have held two joint sessions since the Commission commended their efforts to coordinate their activities at the thirty-fifth session in 2002. (24)


In 2001, the United Nations General Assembly adopted the Convention on the Assignment of Receivables in International Trade (the “Convention”). (25) The Convention closed for signatures in December 2003. At the time of closing, three states had signed on to the Convention: Luxembourg (June 2002), Madagascar (September 2003), and the United States (December 2003). (26) The Convention remains open for accession.


UN/CEFACT, which is based at the United Nations Economic Commission for Europe (UNECE) in Geneva, continues its longstanding position as a global trade facilitator. UN/CEFACT remains the leading organization developing international standards for electronic transactions for government, commerce and industry. Since 1999, UN/CEFACT has collaborated with the Organization for the Advancement of Structured Information Standards (OASIS) to:

expand the use and growth of the Internet by developing the next

generation of electronic business standards based on XML (eXtensible

Markup Language). The ebXML (electronic Business with XML)

initiative called for an eighteen-month worldwide open development

project to create a technical framework enabling the use of XML as a

consistent means for the exchange of electronic business data. The

original ebXML initiative concluded in May 2001 with full community

approval of a framework of technical specifications. (27)

From 2001 to 2003, UN/CEFACT, in collaboration with OASIS, undertook a subsequent initiative to finalize specifications for ebXML, and in May 2003 the UN/CEFACT Plenary “adopted these as UN/CEFACT Technical Specifications.” (28)

In September 2003, UN/CEFAT sent a delegation of members of its Steering Group on a tour of Asia, for the purposes of unveiling its e-business standards to Asian business markets. (29) The delegation visited Taipei, Kuala Lumpur, Singapore, Hong Kong, Tokyo, and Seoul over a two-week period. (30) In May 2004, UN/CEFAT and OASIS reaffirmed their commitment to cooperating on ebXML. (31)


As reported by these authors in 2003, the Organization of American States (OAS) enacted in February 2002 its Model Inter-American Law on Secured Transactions (the “Model Law”). (32) The Model Law is a civil-law version of the key concepts and principles of Article 9 of the UCC as well as of some key Civil and Roman law principles on possessory rights and remedies. In 2003, Mexico adopted a significant portion of it, (33) and other Latin American countries such as Costa Rica, Ecuador and other Central American countries are considering its adoption. The Model Law is also serving as a model for the UNCITRAL Guide for Secured Transactions that is currently being prepared by the UNCITRAL Working Group VI (security interests).



The Counsel for the Federal Reserve Bank of New York, the National Law Center for Inter-American Free Trade (the NLCIFT), and the Legal Adviser’s Office of the United States Department of State have continued their coordinating efforts to create a treaty that will address the law of investment securities held by indirect holders (whether in dematerialized or material form) for adoption by the Americas. (34) In addition to the Securities and Exchange Commission (SEC), the Commodity Credit Corporation (CCC), the Depository Trust and Clearing Corporation (DTCC), and a select group of Latin American public and private sector institutions, this major revision of the law of investment securities in Latin America and the Caribbean is being spearheaded by the International Swaps and Derivatives Association (ISDA). The NLCIFT has concluded its first study which identified the disparities between the U.S. and Latin American approaches to the commercial law governing investment securities. (35) Disparities in law and practice will continue to be identified in preparation for a meeting of experts to be held in the spring of 2005 once the OAS has formally approved the selection of this topic in its treaty making agenda in the fall of 2004.


The NLCIFT is launching a bi-national project to address the legal and business issues involved in securitizing mortgage or trust deed backed assets stemming from the Mexican states of Baja California and Sonora and selling them in the United States, Canadian, and other interested secondary markets. The project will be concerned with the required modernization of Mexican land and commercial registries as well as with the standardization of the mortgage or deed of trust documentation in the NAFTA region.


In cooperation with the Office of the Legal Adviser for Private International Law of the United States Department of State and with the NAFTA 2022 Committee (the NAFTA Advisory Committee on Private Commercial Disputes), the NLCIFT has undertaken a number of outreach activities so that various private sector groups may become aware of the advantages of alternative dispute resolution mechanisms (including arbitration and mediation) and become comfortable with them. The NLCIFT is also planning to create working groups to draft alternative dispute resolution rules and standardized clauses for secured lending, investment securities, and securitization transactions in the NAFTA region. (36) Negotiations are presently underway with Central American nations and Chile to draft similar rules and uniform clauses for the sectors involved in the above described projects. (37)


The NLCIFT, working with representatives of the transportation industry (carriers, freight-forwarders, insurers, and shippers, both large and small), has developed a uniform NAFTA bill of lading, as well as a set of best North American Standard Transportation Practice rules (NASTRAPS). (38) These efforts led to the adoption by a number of trucking companies in Canada, the United States, and Mexico of a uniform truck bill of lading, both paper-based and paperless. In addition, it led to the adoption by many of the same companies of NASTRAPS. Following the initial adoption of the uniform truck bill of lading and NASTRAPS in 2001, the NLCIFT made in 2003 additional revisions to adapt the North American truck bill of lading to the specific conditions of transportation from and to United States/Mexico ports of entry, including Arizona/Sonora ports (such as Nogales), as well as United States/Canada ports of entry, including the Montana/ Alberta ports (such as Sweetgrass). This truck bill of lading meets the administrative requirements of both nations and states, and it also incorporates the best shipment and transportation practices embodied in NASTRAPS. If adopted, it would be coordinated with the insurance industry so that there would be warehouse-to-warehouse coverage in road transportation in the designated region. It would also be coordinated with the customs authorities so that necessary information for customs purposes would be set forth in the uniform document. Finally, the relevant information would be coordinated with the financial industry so that the bill of lading could be used for purposes of financing the shipment. Work on revising the NASTRAPS is ongoing.


In May 2003, the NLCIFT completed a study for the U.S. Customs Service (now part of the Department of Homeland Security) “on the cross-border transshipment of pirated intellectual property goods (including software, clothing and footwear apparel, sporting equipment, toys, music recordings, videos, DVDs, etc.), as well as other threats to the enforcement of intellectual property rights (IPR) and customs laws in the NAFTA region.” (39) The study, Transshipment and Other Threats to the Enforcement of Intellectual Property Rights in Canada and Mexico, (40) provides “an assessment of prevailing conditions in the countries analyzed, as well as suggestions and recommendations on ways to combat [illegal] transshipment, including improved enforcement of IPR and customs laws.” (41) The study “also provides a comparative analysis of the status of IPR enforcement at the border in the European Union.” (42)


The United States Agency for International Development (USAID) and the consulting firm of Boor Allen Hamilton have requested the NLCIFT’s involvement in the diagnosis of the obstacles to trade and investment with and in Central America, especially with regard to commercial law (understood in the broadest sense of this term in civil law countries). (43) Accordingly, the NLCIFT will help identify areas where Central American law requires modernization and will propose modernization measures. The areas covered include: agency law (by examining empowerment documentation and procedures and considering the adoption of the doctrine of apparent authority)

A group of Central American experts has been selected by the NLCIFT to collaborate in this project. The first meeting to assess a national report will take place at the end of May 2004, and the diagnosis for the Central American region will be completed by the end of 2004. (45) At the conclusion of the diagnostic phase, the Central American governments as well as international donor agencies will meet to determine the procedure and priorities of commercial law modernization.


As noted last year, 2002 saw the approval of the Convention on the Law Applicable to Certain Rights in Respect of Securities Held With an Intermediary (the “Hague Securities Convention”) by the Special Commission on General Affairs and Policy of the Hague Conference on Private International Law. (46) Official commentary is expected to become available in the summer of 2004. The Hague Securities Convention has not yet become effective, awaiting ratification by three States. (47)

The Hague Securities Convention would establish choice of law rules for determining which jurisdiction’s substantive law is to be applied to the issues governed by the Convention, including the nature and effects against intermediaries and third parties of a disposition of, or the creation or transfer of an interest in, securities held with an intermediary and the duties of an intermediary to third parties asserting interests in securities held with that intermediary. (48) The Hague Securities Convention would apply in all cases involving a choice between the laws of different States, even if the applicable law is that of a State that has not become a party to the Convention, and the applicable law referred to does not include that jurisdiction’s choice of law rules. (49)

As described in last year’s survey, the Hague Securities Convention’s primary rule will point to the law of the State the intermediary and account holder have expressly agreed to have govern their account agreement or, if the account agreement expressly provides that another law applies to all the issues covered by the Hague Securities Convention, then the law of that other State. (50) The parties’ choice, however, will apply only if the relevant intermediary has, at the time of the agreement just referred to, an office regularly engaged in securities account maintenance activities in that State. (51) If the foregoing rules do not determine which State’s law governs, then the Hague Securities Convention contains “fallback rules” which require further examination of the relevant account agreement and ultimately may result in application of the law of the State in which the relevant intermediary is incorporated or otherwise organized. (52) The Hague Securities Convention includes specific rules to determine governing law applicable to agreements entered into before it becomes effective. (53) To accommodate multiunit States, the Hague Securities Convention will apply internal choice of law rules for perfection by filing. (54)


As noted last year, UNIDROIT recently launched a project addressing the internal soundness and cross-border compatibility of substantive national law governing securities held with intermediaries. (55) The restricted study group established by UNIDROIT in 2002 (56) prepared a position paper in August of 2003 (57) outlining the study group’s preliminary views on the need to create uniform rules in a number of areas, including: precluding “upper tier attachment,” the effectiveness of “book entry” accounts without other formalities for dispositions of interests in securities held with intermediaries, creation and realization of collateral, informal dispositions (i.e. dispositions without book entries), concepts of good faith acquisition (or its equivalent) for acquiring interests free from adverse claims, effectiveness of net settlement, finality, provisional credits, and loss allocation in the circumstance of a shortfall in positions held through an intermediary and in the event of an intermediary’s insolvency. (58)

At meetings in November 2003 and March 2004, consideration was also given to including provisions permitting access to collateral notwithstanding a pledgor’s insolvency, preserving set-off rights to the extent possible, and, most significantly, accommodating (to the appropriate extent) the interface between the direct and indirect holding systems. (59) A preliminary draft instrument was released in early May 2004 (60) and meetings with various industry groups have been held in Germany and the United States in May 2004 and further meetings in June of 2004 are scheduled in France and expected to be scheduled in England.


The International Monetary Fund (IMF) continues its efforts to assist countries with unsustainable debt burdens (61) by developing innovative Sovereign Debt Restructuring Mechanisms (SDRMs). (62) At its meeting in April 2003, the Executive Board of the IMF, using the IMF working paper “Proposed Features of a Sovereign Debt Restructuring Mechanism” (63) as a guide, continued its discussions of the role of an innovative SDRM in international economic restructuring efforts. (64) The purpose of the SDRM is to assist debtor nations in managing their debt in an orderly and timely manner. (65) Ultimately, the IMF envisions itself as playing an enabling role, one that leaves major decisionmaking to the debtor-creditor nations, while imbuing the decisionmaking and restructuring process with the spirit of uniformity and fairness. (66)

Some of the proposed features of the SDRM include: (i) the inclusion of judgment claims among those claims eligible for restructuring

At the same meeting, the Fund considered the economic policy implications of an SDRM. Some have raised concerns that the SDRM would compromise the ability of creditors to enforce debt claims. Another concern has been that debtor countries would overuse the SDRM to the disadvantage of creditors. There are also concerns that expanded debt restructuring capabilities will contract capital markets and raise the cost of borrowing.

The IMP also continues its consideration of the role of a proposed Sovereign Debt Dispute Resolution Forum (SDDRF or DRF) as a feature of a SDRM. Some Directors view the DRF as an essential feature of the SDRM, while others view it as unnecessary. The proposal being considered calls for the DRF to act as an administrative agency, with the authority to promulgate rules for the administration of claims and the resolution of disputes. (70)

(1.) The Commission adopted the UNCITRAL Legislative Guide on Privately Financed Infrastructures Projects at its 33rd Session (2000). During the 36th Session, the Commission decided to combine the Legislative Guide and Model Legislative Provisions into one consolidated publication because the Legislative Guide serves as the basis for the later developed Model Legislative Provisions. The text of the Legislative Guide, model legislative provisions, and other UNCITRAL documents may be found on the UNCITRAL Internet site at

(2.) Draft addendum to the UNCITRAL Legislative Guide on Privately Financed Infrastructure Projects: Note by the Secretariat, Working Group on Privately Financed Infrastructure Projects, UNCITRAL, 5th Sess., at 2, U.N. Doc. A/CN.9/WG.I/WP29 (2002).

(3.) The draft model legislative provisions on privately financed infrastructure projects are set forth as an Annex to the Report of the Working Group. Report of the Working Group on Privately Financed Infrastructure Projects on the Work of Its Fifth Session, UNCITRAL, 36th Sess., at 54, U.N. Doc. A/CN.9/521 (2002).

(4.) Id.

(5.) The Adopted UNCITRAL Model Legislative Provisions appear in Annex I to the Report of the United Nations Commission on International Trade Law on its Thirty-Sixth Session, U.N. GAOR, 58th Sess., Supp. No. 17, at 70, U.N. Doc. A/58/17 (2003).

(6.) Model Legislative Provisions of Privately Financed Infrastructure Projects of the United Nations Commission on International Trade Law, G.A. Res. 58/76, U.N. GAOR, 58th Sess., at 2, U.N. Doc. A/RES/ 58/76 (2004).

(7.) Report of the United Nations Commission on International Trade Law on Its Thirty-Sixth Session, General Assembly, 58th Sess., Supp. No. 17, [paragraphs] 230, 278, U.N. Doc. A/58/17 (2003).

(8.) See id. [paragraph] 203.

(9.) Id.

(10.) Report of the Working Group on Arbitration on the Work of its Fortieth Session, UNICITRAL, 37th Sess., at 3, U.N. Doc. A/CN. 9/547 (2004).

(11.) For the revised draft of article 17 of the model law, see id. at 17.

(12.) See Report of the United Nations Commission on International Trade Law on its Thirty-Sixth Session, U.N. GAOR, 58th Sess., Supp. No. 17, at [paragraph] 203, U.N. Doc. A/58/17 (2003).

(13.) See Report of Working Group III (Transport Law) on the Work of Its Twelfth Session, UNCITRAL, 37th Sess., [paragraph] 3, U.N. Doc. A/CN.9/544 (2003).

(14.) For the latest version of the Draft Convention, see Legal Aspects of Electronic Commerce, Electronic Contracting: Provisions for a Draft Convention, UNCITRAL, Working Group IV (Electronic Commerce), 43d Sess., U.N. Doc A/CN.9/WG.IV/WP.108 (2003).

(15.) Report of the United Nations Commission on International Trade Law on Its Thirty-Sixth Session, U.N.GAOR, 58th Sess., Supp. No. 17, [paragraph] 214, U.N. Doc. A/58/17 (2003).

(16.) Report of Working Group IV (Electronic Commerce) on the Work of Its Forty-First Session, UNCITRAL, 36th Sess., [paragraph][paragraph] 29, 30, UN. Doc. A/CN.9/528 (2003).

(17.) Report of Working Group IV (Electronic Commerce) on the Work of Its Forty-Second Session, UNCITRAL, 37th Sess, [paragraph] 22, U.N. Doc A/CN.9/546 (2003).

(18.) Report of Working Group V (Insolvency Law) on the Work of its Twenty-Ninth Session, UNCITRAL, 37th Sess., [paragraph] 19, U.N. Doc. A/CN.9/542 (2003).

(19.) Id. [paragraph] 11. See also id. [paragraph][paragraph] 20-131 (describing discussion regarding redrafting of certain sections of the guide).

(20.) See generally Draft Legislative Guide on Insolvency Law: Note by the Secretariat, UNCITRAL, Working Group V (Insolvency Law), 13th Sess., U.N. Doc. A/CN.9/WG.V/WP.72 (2004).

(21.) Provisional Agenda for the Thirtieth Session of Working Group V, UNCITRAL, Working Group V, [paragraph] 9, U.N. Doc. A/CN.9/WG.V/WP69 (2003).

(22.) Id.

(23.) Sandra M. Rocks & Kate A. Sawyer, Survey of International Commercial Law Developments During 2002, 58 Bus. Law. 1657, 1661-62 (2003).

(24.) Provisional Agenda for the Fifth Session of Working Group VI, UNCITRAL, Working Group VI, [paragraph] 17-18, U.N. Doc. A/CN.9/WG.VI/WP.10 (2003).

(25.) GA. Res. 56/81, U.N. GAOR, 56th Sess., Agenda Item 161, U.N. Doc. A/Res/56/81 (2002).

(26.) Status of Conventions and Model Laws, available at status-e.htm#Table%20of%20Contents (last modified Apr. 16, 2004).

(27.) Press Release, U.N. Economic Commission for Europe, UN/CEFACT Announces Successful Completion of ebxml Technical Standards Work Programme with Oasis (Aug. 21, 2003), available at

(28.) Id.

(29.) Press Release, UN/CEFACT Announces Forthcoming Visit to Asia E-Business Community (Aug. 26, 2003), available at

(30.) Id.

(31.) Press Release, UN/CEFACT and OASIS Cooperate to Strengthen Work on ebXML (May 10, 2004), available at

(32.) Rocks & Sawyer, supra note 23, at 1663. The model law was adopted on February 8, 2002, by the Sixth Inter-American Specialized Conference on Private International Law (known as “CIDIP-VI,” for its Spanish acronym). Model Inter-American Law on Secured Transaction, Sixth Inter-American Specialized Conference on Private International law (CIDIP-VI), 3d Sess., CDIP-VI/RES.S/02, OEA/ Ser.KX1.6 (Mar. 5, 2002), available at

(33.) Decreto por el que se reforman, adicionan y derogan diversas disposiciones de la Ley General de Titulos y Operaciones de Credito, del Codigo de Comercio, de la Ley de Instituciones de Credito, de la Ley del Mercado de Valores, de la Ley General de Instituciones y Sociedades Mutualistas de Seguros, de la Ley Federal de Instituciones de Fianzas y de la Ley General de Organizaciones y Actividades Auxiliares del Credito (Decree published in the Mexican Official Gazette) (June 13, 2003).

(34.) These efforts are being coordinated by the NLCIFT as part of its work for the U.S. Department of State. The NLCIFT is a 501(c)(3) non-profit research and educational institution affiliated with the James E. Rogers College of Law at the University of Arizona in Tucson, Arizona. The Center is dedicated to developing the legal infrastructure to build trade capacity and promote economic development in the Americas. Its work covers a number of substantive areas, including (but not limited to) the following: alternative dispute resolution, banking, bankruptcy, business formation and associations, competition law and policy, customs, electronic commerce, environment, family law, intellectual property, investment securities, judicial reform and training, labor, products liability, real estate, securitization, secured transactions, and transportation. See generally the NLCIFT’s website, available at (last visited Aug. 20, 2004).

(35.) National Law Center for Inter-American Free Trade, Investment Securities–The Need for Harmonization and Modernization of Securities Ownership, Transfer and Pledging Laws. Basic Principles and Analysis of Selected Jurisdictions in Latin America (Dec. 2003) (unpublished, on file with the NLCIFT).

(36.) See supra note 34 (describing the work of the NLCIFT).

(37.) Id.

(38.) National Law Center for Inter-American Free Trade, NORTH AMERICAN STANDARD TRANSPORTATION PRACTICES (NASTRAPS) (Gary, T. Doyle ed., 1998) (on file with the NLCIFT).

(39.) National Law Center for Inter-American Free Trade, Publications: Transshipment and Other Threats to the Enforcement of Intellectual Property Rights in Canada and Mexico, available at http:// (last visited Aug. 27, 2004) [hereinafter NLCIFT Publications].


(41.) NLCIFT Publications, supra note 39.

(42.) Id.

(43.) See supra note 34 (describing the work of the NLCIFT).

(44.) Id.

(45.) Id.

(46.) The text of the Hague Securities Convention is available at text36e.html (last visited Aug. 8, 2004).

(47.) Hague Securities Convention art. 19(1). In the case of the United States, Senate approval would be required before the Convention would become effective against the United States.

(48.) Id. art. 2(1).

(49.) Id. arts. 3, 9, 10.

(50.) Id. A test based on the jurisdiction selected by the parties as the place in which the account was to be maintained was rejected.

(51.) Id. For multi-unit States, if the parties select the law of a territorial unit, the requisite office may be located anywhere in the State for the parties choice of law to apply. Id. art. 12(1).

(52.) Id. art. 5(2). For intermediaries that are not incorporated or otherwise organized, the rules refer to place of business or principal place of business. Id. art. 5(3). A special rule is included for intermediaries that are organized under the law of the multi-unit State but having its place of business or principal place of business in a particular territorial unit. Id art. 5(2).

(53.) Id. art. 16.

(54.) Id. art. 12(3).

(55.) Rocks & Sawyer, supra note 23, at 1666.

(56.) Representing the United States on the Study Group is Professor Curtis R. Reitz, Biddle Professor of Law at the University of Pennsylvania Law School. Professor Reitz was chair of the NCCUSL drafting committee that prepared the 1994 revision of U.C.C. Article 8 and related provisions of U.C.C. Article 9. Id. at 1666 n.51. Author Sandra M. Rocks is also on the Study Group as a Co-coordinator for the Private Financial Sector.

(57.) Position Paper, The UNIDROIT Study Group on Harmonised susbstantive Rules Regarding Indirectly Held Securities, Aug. 2003, UNIDROIT, available at programme/study078/main.htm (last visited Aug. 1, 2004).

(58.) Id. at 18-28.

(59.) Sec UNIDROIT News, 83rd Sess. of the Governing Council, [2004-01] UNIF. L. Rev. 96, 100-04, available at (last visited Aug. 27, 2004).

(60.) International Institute for the Unification of Private Law, Study Group for the Preparation of Harmonised Substantive Rules on Transactions on Transnational and Connected Capital Markets, UNIDROIT Doc. Study LXXCIII–Doc. 13 prov 2, (2004), available at programme/study078/item1/draft/s-78-13prov2-e.pdf.

(61.) An unsustainable debt burden is obtained when “under any realistic set of policies and circumstances that can be envisaged, the debt-to-GDP ratio (or debt-to-export ratio in some cases) will rise without limit.” Proposals for a Sovereign Debt Restructuring Mechanism (SDRM): A Factsheet, Questions and Answers, available at (last updated Sept. 8, 2003). “In such cases, one way or another, the country’s debt have [sic] to be restructured–that is, the net present value of the debt will have to be reduced relative to its [ace value.” Id.

(62.) On the structural features and prospective benefits of Sovereign Debt Restructuring Mechanisms, see generally Anne O. Krueger, A New Approach to Sovereign Debt Restructuring Int’l Monetary Fund (Apr. 16, 2002), available at

(63.) International Monetary Fund, Proposed Features of a Sovereign Debt Restructuring Mechanism (Feb. 12, 2003), available at

(64.) See IMF Board Discusses Possible Features of a Sovereign Debt Restructuring Mechanism, Public Information Notice No. 03/45 (Apr. 3, 2003), available at pn0345.htm.

(65.) See Proposals for a Sovereign Debt Restructuring Mechanism (SDRM): A Factsheet, Questions and Answers (last updated Sept. 8, 2003), available at sdrm.htm#a2.

(66.) See generally IMF Board Discusses Possible Features of a Sovereign Debt Restructuring Mechanism, Public Information Notice No 03/45 (Apr. 3, 2003), available at np/sec/pn/2003/pn0345.htm For example, during the April 2003 meeting, the Directors lauded the efforts among private and government entities to devise a “voluntary Code of Conduct” that would establish, ex ante, expectations regarding debtor-creditor relationships. Id.

(67.) Id.

(68.) Id.

(69.) Id.

(70.) See id. Such rules would have the force of law, unless overturned by a supermajority vote of the Board of Governors.

Sandra M. Rocks is Counsel and Kate A. Sawyer is an associate at Cleary, Gottlieb, Steen & Hamilton, New York, New York. Ms. Rocks currently chairs the International Commercial Law Subcommittee of the U.C.C. Committee of the ABA Section of Business Law and is a past Chair of the Subcommittee on Investment Securities of the U.C.C. Committee. Ms. Rocks participated on behalf of EMTA (formerly the Emerging Markets Traders Association) in drafting sessions at The Hague in connection with preparation of the Hague Securities Convention and is a member of the Study Group as Co-coordinator for the Private Financial Sector for the UNIDROIT project addressing securities held with intermediaries, each discussed below. For further information about the matters covered by this Survey, contact Sandra M. Rocks or Kate A Sawyer, Cleary, Gottlieb, Steen & Hamilton, One Liberty Plaza, New York, NY 10006 (tel. (212) 225-2000 or email: or ksawyer@ The authors would like to thank Boris Kozolchyk at the National Law Center for Inter American Free Trade for his assistance in the preparation of this Survey