INTERNATIONAL LAW ASSOCIATION

SYDNEY CONFERENCE (2018)

INTERNATIONAL PROTECTION OF CONSUMERS

Members of the Committee

Professor Claudia Lima Marques (Brazilian): Chair

Professor Dan Wei (Headquarters): Rapporteur

Professor Christoph Benicke (German)

Professor Thierry Bourgoignie (Canadian)

Professor Anabela De Sousa Goncalves

(Portuguese)

Professor Der-Chin Horng (Chinese (Taiwan))

Dr Fernando Lauria (Argentine)

Alternate: Dr Ezequiel N. Mendieta

Dr Ulla Liukkunen (Finnish)

Dr Fadi A Makki (Headquarters)

Professor Ariane Morin (Swiss)

Professor James Nehf (American)

Professor Yuko Nishitani (Japan)

Dr Luke Nottage (Australian)

Professor Gail Pearson (Australian)

Dr Rui Pereira Dias (Portuguese)

Professor Iain D C Ramsay (British)

Professor Francois-Xavier Train (French)

Professor Hector Valverde Santana (Brazilian)

Professor Patrick H G Vrancken (South African)

Dr Ying Yu (British)

INTERNATIONAL PROTECTION OF CONSUMERS

Interim REPORT (2017-2018)

I – Introduction: The ILA Committee on International Protection of Consumers: Mandate

and the Committee’s work in the last two years ;

II – New Developments on cross-border consumer e-commerce and data protection (Part 1);

III- Protection of international Tourists at the Hague Conference on Private International

Law (Part 2); IV- Future activities and the Open session

I – Introduction: The ILA Committee on International Protection of Consumers: Mandate

and the Committee’s work in the last two years

Following the discussions at the Biennial Conference held in Rio de Janeiro, the Committee of

International Protection of Consumers was officially approved as an ILA Committee in November

2008 as a response to a proposal made by the Brazilian Branch.1 The current Committee’s

mandate2 includes a study of the role of public and private international law to protect consumers,

1 See Discussion Report available at www.ila-hq.or/en/committees/index.cfm/cid/1030 .

2 The Committee’s mandate is to: “undertake studies on the international protection of consumers, with

particular regard to e-commerce, tourism and consumer accidents. To this end, the Committee will

compare various national legislations on consumer protection and the standards they offer for the

protection of non-national and non-resident consumers on their territories, and will consider the possible

extraterritorial reach of consumer legislation. The Committee’s primary aim is to look at how national

legislation on the conflict of laws and jurisdiction, as well as international treaties, model laws and regional

legislation on consumer issues) deal with the issue of consumer protection in a transboundary context. It

will compare national and regional solutions to the issue by bringing together specialists to provide insight

the review of the Guidelines, Model laws and Treaties, as well as national legislations concerning

protection and consumer redress, especially in the context of conflict of laws and jurisdiction.

Since its creation, the Committee has addressed three issues: (1) the impact of the financial crisis

on consumers and its international dimension; (2) the issue of consumer redress in cross-border

transactions and the role of international law to protect consumers; (3) International Organizations

dealing with consumer protection. The first two issues have taken 4 years of study and have ended

with the Sofia Declaration on the Development of International Principles on Consumer

Protection (ILA Resolution no. 4, 2012). The third one was especially addressed in the

Johannesburg Recommendation and in a Guideline (ILA Resolution no. 2, 2016) on international

protection of consumers.3

B) The Sofia Statement on the Development of International Principles on

Consumer Protection

The first contribution of the International Law Association Committee to the

Development of the International Protection of Consumers was in 2012.4 It approved the ILA

Resolution no. 4/2012, which suggests 5 principles that must guide international consumer law

development.5 The so called “Sofia Statement on the development of international principles on

consumer protection” is as followed:

“Consumer protection should be guided by the following general principles:

1. Consumers are the weaker party in situations of mass or standard form contracts, in

particular concerning information and bargaining power.

2. It is desirable to develop standards and to apply rules of private international law that

entitle consumers to take advantage of the most favorable consumer protection.

3. Regulation of consumer contracts should be effective and fair and ensure transparency.

4. Responsible lending is incumbent on all those involved in consumer credit transactions,

including credit providers, brokers and advisers.

5. Consumer groups should participate actively in the development and regulation of

consumer protection.” 6

In other words, the principles are: (1) Vulnerability, (2) The Most Favorable Consumer

Protection; (3) Fairness; (4) Responsible Lending; and (5) Active participation on Regulation.

These “Sofia Principles” started to be known and quoted by legislators, as in the Brazilian Senate7

during the reform of the Brazilian Consumer Code8, and also in Argentina, Australia, Costa Rica,

Paraguay, UK and by the work of IACL (International Association of Consumer Law) and of

ASADIP (Americas Association of Private International Law) on consumer protection.

into national and regional experiences on consumer protection in a transboundary context, to assist in

currently existing efforts in international law-making.” 3 See ILA Resolution, http://www.ila-hq.org/en/news/index.cfm/nid/08039ADC-FF64-4E58-

8400C6F015DAD404. See also the Report, http://www.ila-hq.org/en/committees/draft-committee-reports-

johannesburg-2016.cfm .

4 See MARQUES, Claudia Lima. 25 Years to Celebrate: Horizons of the 1990´s Brazilian Consumer

Protection Code and new horizons, especially on international protection of consumers, in MARQUES,

Claudia Lima; DAN, Wei. Consumer Law and Socioeconomic Development: National and International

Dimensions, Springer: Heidelberg, 2017 (not yet published). 5 See:. Conference Resolution Sofia 2012. Available in: <http://www.ila-

hq.org/en/committees/index.cfm/cid / 1030>. Access: 02 sept. 2012. 6 See http://www.ila-hq.org/en/committees/index.cfm/cid/1030 . 7 See http://www.senado.gov.br/senado/codconsumidor/default.asp. 8 SENADO FEDERAL, Atualização do Código de Defesa do Consumidor – Relatório, Presidência do

Senado Federal, Brasília, 2012, p. 139 and p.140.

The 77th Conference of the International Law Association held in Johannesburg, South

Africa, from August 7 to 11, 2016, having considered the Report on the Role of international Law

on contemporary consumer protection and the book prepared by the Committee as well as its

survey of the consumer protection laws and regulations worldwide, recognised the emergence of

the international dimension of consumer protection, the role of international law in helping to

develop more equitable standards of consumer protection, and the need to take the consumer into

account in international trade regulation.

Inspired by the Revision of the UN Guidelines for Consumer Protection of 2015 and

wishing to contribute to the debate on the creation of fair and equitable principles for international

consumer protection, the International Law Association has adopted the Johannesburg

Recommendations, also known as Resolution No. 1/2016, which acknowledged that individuals

are usually the weaker parties in general consumer contracts, and particularly in cross-border

contracts, most notably with respect to the choice of applicable law and jurisdiction, and

addressed the lack of universal models to protect consumers in cross-border contracts.

More specifically, there are four recommendations approved under ILA’s Resolution no.

1/2016, as follows:

1. CONSIDERING that consumers as natural persons acting outside of their professions or

trade do not have expert knowledge, and are in an unequal bargaining position making

the application of the rules on commercial transaction (which often includes lex

mercatoria) unfair to them; STRESSING the differences between consumer contracts

and other business contracts and the need for special rules to protect consumers not only

nationally but also in international contracts and with respect to dispute resolution,

RECOMMENDS acknowledgement of the protection of consumers as weaker

parties as a principle in national and international transactions,

2. NOTING that several international law initiatives have been undertaken with respect to

the harmonization of laws relating to cross-border consumer transactions by different

international bodies, which have produced conventions, model laws, and legislative

guides; ALSO NOTING that the 2015 Revision of the UN Guidelines for Consumer

Protection has acknowledged the international dimensions of consumer protection;

WELCOMING the efforts of the Hague Conference on Private International Law

concerning the necessity to regulate international tourism,

RECOMMENDS the adoption of special rules on applicable law and jurisdiction for

cross-border consumer protection.

3. AWARE that foreign tourists demand special protection related to their consumer rights,

especially when they are away from their place of habitual residence, culture, and

language; ACKNOWLEDGING the efforts made at the UN World Tourism

Organization to enhance the protection of tourists in case of emergency situations and the

efforts of the Hague Conference on Private International Law on the field,

RECOMMENDS more international co-operation on consumer protection,

especially in the field of international tourism.

4. CONSIDERING the recent efforts to update national and regional laws, regulating

international consumer contracts (especially in the EU, Mercosur, OEA, Japan, China,

Korea, Brazil, Argentina, Panamá, Dominican Republic),

RECOMMENDS that States consider best practices on international protection of

consumers, and to that end also RECOMMENDS the use of the models set out in

Guidelines on the Best Practices on the Law Applicable to International Protection

of Consumers, with the aim of helping the development of fair and equitable legal

standards for all consumers in the world, without discrimination.”

Thus, such Johannesburg ILA Resolution is a consolidation of the principles of the Sofia

Declaration beginning with the principle of vulnerability and reinforcing the need to adopt

especial rules on applicable law and jurisdiction to protect consumers in a globalized world. The

studies of the committee have also considered the need for more international co-operation.

From 2012 to 2016, the ILA’s Committee on International Protection of Consumers has

studied the models and practices of the States on the protection of consumers in international

contracts, and selected there of them to guide countries that have not yet legislated on the choice

of law in cross-border consumer contracts. The Committee has also developed a forth model with

parts and ideas of the other three current existing models. Thus, the final Johannesburg

Recommendation reflects the best practices and models already existing in the world in

international consumer protection concerning the applicable law to consumer contracts.

From 2017 to 2018, the work of the Committee continues to focus on the study of cross-

border consumer e-commerce and on the protection of tourists, especially as an observer at

UNCTAD on the IGE on Consumer Protection and its working group on e-commerce, and at the

Hague Conference on Private International Law on the preparation of a global network to protect

international tourists. In both cases there were ongoing processes that will end in 2020 at the final

report. The Committee’s work in the last two years includes two meetings – one at the IACL

Congress held in 2017 (Porto Alegre, Brazil), and another at the Brasilcon Congress held in 2018

(São Paulo, Brazil), and one teleconference on June 11th 2018 to prepare the Open Session at the

ILA Sydney Congress.

II- New Developments on cross-border consumer e-commerce and data protection (Part 1)

We thank the Committee Members that have sent contributions and the UNCTAD Working

Group in e-commerce for the material provided, specially Ms. Ebru Dessemond, Legal Officcier

Competion and Consumer Policies Branch of the division on International Trade in Goods and

Services and Commodities. We also thank the invitation of the Chair, Prof. Dr. Claudia Lima

Marques, to take part of the Working Group and their teleconferences.

E-commerce is one of the fastest developing zones of economic growth, and legislation needs to

keep actualized, but national legislations are country-specific and normally are “limited in relation

to consumer protection and re-dress in the nature of the circumstances of the internet economy

and the consequent borderless world”, so UNCTADs Working Group on e-commerce work “to

develop broad Guidelines for countries to consider when developing frameworks to manage e-

commerce, and that these Guidelines specifically speak to and take into account the needs of

vulnerable consumers”.

1- National developments:

1.1- Australia - The Australian Consumer Law (ACL) is being reviewed in 2016. The review is

being undertaken by the Commonwealth Department of Treasury pursuant to an

intergovernmental agreement at the time of the new national framework.9 The ACL (Schedule 2

9 Intergovernmental Agreement for the Australian Consumer law July 2009 para E.

www.coag.gov.au/sites/default/files/ICA-australian-consumer-law.pdf

to the Competition and Consumer Act 2010 -Cth) came into effect at the beginning of 2011. It is

a second-generation national legislation and replaced the first Commonwealth National Consumer

Protection Legislation - the Trade Practices Act 1974 (Cth) (TPA). The TPA rested on the

‘corporations power’ in the Commonwealth Constitution. The ACL, on the other hand, is based

on an ‘application model’ whereby the Commonwealth formulates the legislation and it is adopted

as State legislation.10 It applies as both Commonwealth and State law; however, it is considered

Commonwealth law only to the extent of the Commonwealth legislative power, which is, in this

case, the ‘corporations power’.

a. Digital products and platform liability. The ACL is digital neutral. For the purposes of the

ACL computer software is ‘goods.’ A platform is simply a conductor of information

(notwithstanding that an algorithm can target the recipients of information), is unlikely to be held

liable for the information provided.11 The question of whether and in what circumstances it is

possible to hold a platform liable is being considered. There are further issues about the

information and algorithms on comparison websites and the veracity of online reviews. Platforms

often incorporate reputation rating and, sometimes, it is put forward as a substitute for more

effective regulation. The ACCC provides information for consumers about online shopping scams

through its webpage.12

b. Sharing economy. Much of the application of the ACL is predicated on the provider being a

business that is undertaken in trade or commerce. In sharing economy, which includes some peer

to peer lending and crowd-funding, accommodation sharing, and transport ride sharing, the

service is not provided by a business. However, in some instances, particularly if repetitive, the

conduct involved is in trade and commerce. The nature of sharing transactions raises questions of

the statutory definition of a consumer. Much of the sharing economy is facilitated by platforms

and the issue is the extent, if any, of platform liability.

c. Consumer access to data held by firms about them. Firms use individual and aggregated

consumer data to make commercial decisions. Such data is said to be critical for innovation.13

Usage data is collected and in some instances provided to individual consumers. It is suggested

that consumers should have such information to make better decisions and for a more competitive

economy.14 (Contribution of Gail Pearson)

1.2. Brazil – The IACL Congress in 2017 (organized by IACL, the Federal University of Rio

Grande do Sul and UQUAM, in Porto Alegre, Brazil) and the BRASILCON Congress in 2018

São Paulo have had the focus on the consumer protection in the digital world. Despite of these

efforts, Bill no. 281/2012 (PL 3514/2015) to reform the Brazilian Consumer Code has not yet

passed at the Brazilian Parliament. (Contribution by Hector Santana)

1.3. Morocco – Morocco has volunteered to be the first country to undergo a peer review on

consumer protection in 2017. UNCTAD has hosted this first ever peer review with the

Intergovernmental Group of Experts (IGE) during the Second Session of the Intergovernmental

Group of Experts on Consumer Protection Law and Policy, held from July 3 to 4, 2017. This peer

review has provided an opportunity for Morocco to benefit from UNCTAD capacity-building and

There are now documents to support this Review: A national Consumer Survey to assess consumer and

business perceptions and the effectiveness of the laws and regulatory framework.

http://consumerlaw.gov.au/australian-consumer-survey/; An Issues Paper, March 2016 and a Comparative

analysis of Overseas Consumer Policy Frameworks, April 2016 http://consumerlaw.gov.au/review-of-the-

australian-consumer-law/about-the-review/ 10 See Standing Committee of Officials of Consumer Affairs An Australian Consumer Law Fair Markets

– Confident Consumers Cth of Australia, 2009 11 Google Inc v Australian Competition and Consumer Commission [2013] HCA 1 12 http://www.scamwatch.gov.au/types-of-scams/buying-or-selling/online-shopping-scams 13 Commonwealth of Australia, Financial System Inquiry Final Report, November 2014 (Murray) p 188 14 Commonwealth of Australia Competition Policy Review Final Report March 2015 (Harper Review) p

303.

technical assistance in implementing the review recommendations. The peer review has helped

the consumer protection authority in Morocco to engage in international cooperation with other

consumer protection agencies and with development partners: “This peer review will allow us to

strengthen our consumer protection system and align ourselves with what is considered the best

international practices”, said Mrs. Fatiah Akharif (Director ad Interim of Quality and Market

Surveillance, Ministry of Industry, Investment, Trade and Digital Economy, Morocco). “The

evaluation report will be of great value and will be used to advocate for a strengthening of the

existing consumer protection system”, she continued. A major asset of conducting peer reviews

on consumer protection through the Intergovernmental Group of Experts is the opportunity

offered to exchange experiences and best practices among countries.15 (Contribution of Anabela

Gonçalves)

1.4. France – France has the Directorate General for Competition, Consumption and Fraud

Prevention (DGCCRF) as the regulatory authority, which investigates and sends cases to the

judiciary for adjudication, the National Institute for Consumption has a role in consumer

education and there are also a Commission on “clause abusives”. In March 2016, a Decree

(Ordonnance no. 301/2016, JO of March 16th 2016) reformed the French Consumer Code.16 The

Ministerial Report inform: “La refonte du code de la consommation proposée par le ministère de

l'économie, de l'industrie et du numérique a pour objet d'aménager le plan du code et de

déterminer une clé de répartition plus rationnelle entre les différents livres afin de clarifier

l'ordonnancement des textes et de faciliter ainsi l'accès du droit aux usagers de ce code,

consommateurs et entreprises, conformément aux recommandations de la Commission

supérieure de codification.

La recodification offre la possibilité de corriger certaines anomalies dans la délimitation des

domaines législatifs et réglementaires, de regrouper les dispositions relatives aux sanctions et

donner aux dispositions pénales une rédaction correcte.

Elle permet, enfin, d'apporter une clarification au champ d'application du code de la

consommation par l'insertion dans l'article liminaire d'une définition complétée de la notion de

consommateur, afin de pallier une insuffisance de la définition actuelle qui ne précise pas

expressément qu'une activité agricole doit être regardée comme une activité professionnelle et

qu'un agriculteur agissant dans le cadre de cette activité ne peut pas se prévaloir de la protection

offerte au consommateur par le code de la consommation.

Par ailleurs, cet article liminaire est enrichi de la définition des notions de non-professionnel et

de professionnel résultant soit des directives européennes applicables, soit de la jurisprudence

nationale. Il convient de signaler que l'insertion d'une définition du professionnel répond à une

exigence de la Commission européenne signifiée récemment aux autorités françaises suite à la

transposition en droit national de la directive 2011/83/UE du 25 octobre 2011 relative aux droits

des consommateurs sans cette définition. Il s'agit donc là d'une mesure d'adaptation au droit de

l'Union européenne”.17

1.5. USA – Consumer Financial Protection Bureau - The Trump administration is undertaking

a complete review of rules adopted by the Consumer Financial Protection Bureau since its

creation several years ago following the financial crisis. This review may result in the reversal or

major revision of rules adopted under federal consumer financial laws and issued by the Bureau

since 2011. The Bureau is reconsidering most, if not all, of its previous rules, including its 2015

rule under the Home Mortgage Disclosure Act, a 2017 rule entitled “Payday, Vehicle Title, and

15 See http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=1509 . 16 See https://www.economie.gouv.fr/dgccrf/refonte-code-consommation-publication-lordonnance-

recodification . The new legal text is:

https://www.legifrance.gouv.fr/affichTexte.do;jsessionid=52FD9DE4D2E6FD8888FBE5FED436817A.tp

dila12v_3?cidTexte=JORFTEXT000032209352&dateTexte=&oldAction=rechJO&categorieLien=id&idJ

O=JORFCONT00003220905 17 Acessible in:

https://www.legifrance.gouv.fr/affichTexte.do;jsessionid=52FD9DE4D2E6FD8888FBE5FED436817A.tp

dila12v_3?cidTexte=JORFTEXT000032209332&dateTexte=&oldAction=rechJO&categorieLien=id&idJ

O=JORFCONT000032209050

Certain High-Cost Instalment Loans”, which are rules concerning remittance transfers, mortgage

servicing under the Real Estate Settlement Procedures Act, and ability-to-repay and qualified

mortgage standards. The Bureau also said that it is reconstituting its Consumer Advisory Board

with all new members. The acting director of the Bureau dismissed all 25 members of the

Advisory Board earlier this year. The Advisory Board has traditionally played an influential role

in advising the Bureau's leadership on new regulations and policies. But some members of the

Advisory Board, who include prominent consumer advocates, academics and industry

executives, began to complain that the group was being ignored and the Bureau was making

decisions about the agency’s future without appropriate study and input from constituent groups.

(Contribution of James Nefh)

Federal Trade Commission – The econsumer.gov is an international complaints portal, which

enables consumers all over the world to report cross border ecommerce scams. Econsumer.gov is

a partnership of 38 consumer protection agencies around the world. It consists of, a jointly

sponsored website in 8 languages for filing international fraud complaints and the sharing of those

and other complaints using the Consumer Sentinel Network (CSN), the secure online database

that houses the complaints maintained by the FTC.

1.6. Lebanon - Lebanon has a new Decree of 2016 on misleading advertising. Regarding

consumer education, schools and universities of this country were engaged in consumer

protection, in general, and e-commerce, in particular. The enforcement agency has a video on

misleading advertising in e-commerce, which was broadcasted by all TV channels. Lebanon has

a memorandum of understanding with Egypt and Saudi Arabia in consumer protection

cooperation.

1.7. China – In June 2018, the third Draft of China’s E-Commerce Law was reviewed by the

National People’s Congress. Compared to the second Draft, the new version requires domestic

online retail platform operators to be accountable jointly with merchants for selling any

counterfeit goods online. Once passed, the E-Commerce Law covers both cross-border consumer

e-commerce and data protection. Article 71 states that “The State promotes cross-border e-

commerce exchange and cooperation with various countries or regions, participates in the

formulation of international rules of e-commerce, and promotes the international recognition of

electronic signatures, electronic identities and so on. The State promotes and establishes cross-

border e-commerce dispute settlement mechanisms with various countries or regions”.

Currently, http://www.315.gov.cn/, a national complaints portal, launched on March 15th,

2017, aims to optimize the efficiency, effectiveness, transparency of enforcement in China.

2 – Consumer Cross border cases and international cooperation on consumer cases

During these two years the Committee, Members have followed international cases and the efforts

of cooperation of enforcement agencies from different jurisdictions to solve consumer cross

border cases.

2.1 Valve Corporation v ACCC [2017] FCAFC 224. The decision of December 22nd, 2017,

concerned misleading and deceptive conduct on online purchases of games, specially misleading

and deceptive statements by Valve Corporation in relation to refunds for unplayable computer

games.18 In this case, the Australian Competition and Consumer Commission (ACCC) claim that

the Valve (Washington, USA) had contravened “Section 18 of Schedule 2 of the Australian

18 See https://www.timebase.com.au/news/2017/AT04549-article.html .

Competition and Consumer Act 2010 by engaging in misleading or deceptive conduct”, and

“Section 29(1) of the Australian Consumer Law by making false or misleading representations

concerning the existence, exclusion or effect of a condition, warranty, guarantee, right or

remedy.” In March 2016, the Federal Court (Australia) found that terms and conditions contained

within the Steam Subscriber Agreements and policies were false or misleading regarding

consumer rights and a penalty of $3 million was imposed on Valve for non-compliance with the

Australian Consumer Law. In December 2017, in their judgment, the Full Federal Court found

that there was a direct relationship between Valve and its consumers in Australia: “Additionally,

consumers had to agree to the SSA before they could open an account and purchase anything. In

this context, the Court found that upon reading the SSAs and other documents, Valve had engaged

in misleading or deceptive conduct. This is because it was apparent that a reasonable consumer

would have read the policy as a statement to the effect that Valve was not required to provide a

refund.” 19 (Contribution of Luke Nottage)

2.2. Cross-border cooperation between the USA, Australia and Canada Agencies - The

Federal Trade Commission (USA), along with privacy law enforcement agencies in Australia and

Canada, received a global data protection award for its cross-border investigation of the massive

ashleymadison.com data breach in July 2015, which affected 36 million consumers in nearly 50

countries. The FTC settlement requires the defendants to implement a comprehensive data-

security program, including third-party assessments. In addition, the operators had to pay a total

of $1.6 million to settle Federal Trade Commission and state actions. (Contribution from Claudia

Lima Marques)

2.3. VTech Breach on consumer data- An investigation into a global data breach at VTech

found the connected toy maker had failed to adopt adequate security measures to protect sensitive

personal information of children. The Office of the Privacy Commissioner of Canada investigated

the breach in cooperation with the U.S. Federal Trade Commission, and also collaborated with

the Privacy Commissioner for Personal Data for Hong Kong, where VTech is headquartered. The

FTC has reached a settlement with VTech. VTech will pay $650,000 as part of the settlement

with the FTC.20 Electronic toy manufacturer VTech Electronics Limited and its U.S. subsidiary

have agreed to settle charges by the Federal Trade Commission “that the company violated a U.S.

children’s privacy law by collecting personal information from children without providing direct

notice and obtaining their parent’s consent, and failing to take reasonable steps to secure the data

it collected.” The Office of the Privacy Commissioner of Canada is satisfied that these measures

are sufficient and will reduce the risk of a future breach.21 (Contribution by Thierry Bourgoignie)

2.4 – USA-Indian Case - Tech Support Scam Sweep: According to UNCTAD’s WG on e-

commerce: “The FTC, along with federal, state, and international enforcement parties,

announced “Operation Tech Trap,” an international crackdown on tech support scams that trick

consumers into believing their computers are infected with viruses and malware, and then charge

them hundreds of dollars for unnecessary repairs. The coordinated effort included FTC actions

against foreign-based defendants, two criminal enforcement actions by Indian law enforcement

authorities, and consumer education initiatives by the ACCC and the Canadian Competition

Bureau. Alongside this effort, the FTC conducted training and roundtables in the United States

and India to help build the capacity of Indian law enforcement to investigate, arrest, and

prosecute the promoters of imposter scams stemming from Indian call centers, and to coordinate

19 Text of: https://www.timebase.com.au/news/2017/AT04549-article.html .

20 https://www.ftc.gov/news-events/press-releases/2018/01/electronic-toy-maker-vtech-settles-ftc-

allegations-it-violated. 21 See Report of Findings – VTech Holdings Ltd. https://www.priv.gc.ca/en/opc-actions-and-

decisions/investigations/investigations-into-businesses/2018/pipeda-2018-001/.

https://www.priv.gc.ca/en/opc-news/news-and-announcements/2018/nr-c_180108/

on these issues with other foreign enforcers and stakeholders.” (Contribution from Claudia Lima

Marques)

2.5 - Cross border arbitration between the Mainland China (Zhuhai) and the Macau Special

Administrative Region of China

Although Mainland China and the Special Administrative Region of Macau are two different

jurisdictions due to the “One Country, Two Systems” formula, cross border cooperation is always

needed.

Even though developments in tourism have been made to encourage consumers’ activities

enhancing shopping confidence of inbound tourists, more comprehensive measures and services

are needed to safeguard consumer rights.

According to the report made by the Secretary for Economy and Finance published on January

31st 2018 on the Official Gazette, the revision of the “Regulations of Consumer Arbitration

Centre” was rectified to adopt the use of long-distance transmission technology (such as

videoconference) so as to facilitate cross-border mediation and hearings. The adoption of this

measure enhanced both the function and efficiency of the Macau Arbitration Centre’s work,

which set up a mechanism for cross-border arbitration with consumer organizations in the Greater

Bay Area (Hong Kong-Macau-Guangdong Province). The Consumer Council and Zhuhai City

Association for Consumers’ Rights and Interests Protection discussed and carried out a simulation

on arbitration to review the process and decided to launch the cross-border arbitration service

between Macao and Zhuhai on March 15th 2018. Zhuhai is the first city in the Greater Bay Area

to carry out cross-border arbitration. In case of Zhuhai, residents lodge their complaints after

consuming in Macau and request to solve their disputes through the Arbitration Centre. They may

choose to attend the arbitration process through cross-border arbitration, which helps to lower the

cost of tourists traveling to/from Macau, making it easier for them to use the services of the

Consumer Arbitration Centre of Macau. This process enables tourists’ consumer rights to be

better protected, and it is believed to boost their confidence when shopping in Macau, thus,

helping the development of Macau as a world centre for tourism and leisure.

3 – International and regional organisations

By 2017, the UNCTAD’s IGE on consumer protection emphasized “the importance of

harnessing e-commerce to increase the welfare of consumers worldwide while limiting its

potential risks” and invited “member States to continue their efforts in implementing international

best practices in this area as contained in the United Nations guidelines for consumer protection;

stresses the need to strengthen international cooperation, including informal collaboration, among

agencies, to enhance consumer trust in e-commerce; and welcomes the initiatives taken by

relevant organizations of the United Nations system and other international organizations and

networks to build trust in the digital economy”.22 The summary of some of these efforts are, as

follows:

3.1- OECD - On the upcoming publications of OECD in the subject we want to point out the

OECD’s report of March 28th, 2018 on Consumer protection enforcement in a global digital

marketplace, new release of the OECD Digital Economy Papers series: “This report examines

information on consumer protection enforcement authorities of OECD member and non-member

countries, especially on the ability of these authorities to co-operate across borders. It is based

on questionnaire responses from 31 countries, supplemented by additional research. It has been

prepared to support a review of the 2003 OECD Recommendation of the Council concerning

Guidelines for Protecting Consumers from Fraudulent and Deceptive Commercial Practices

22 See http://unctad.org/meetings/en/SessionalDocuments/cicplpd9_en.pdf

across Borders. It will also inform work to implement the 2016 OECD Recommendation of the

Council on Consumer Protection in E-Commerce, which contains updated provisions on

enforcement co-operation.” The study is based on a survey conducted with consumer protection

enforcement authorities of OECD member and non-member countries, especially on the ability

of these authorities to co-operate across borders. According to this study, challenges faced by

agencies in cross-border cooperation include sharing of information containing business and

personal data; sharing of consumer complaints; and resources to facilitate international

cooperation. The OECD has also published two other papers on the series. One paper on

Consumer Policy and Smart Homes: “This report outlines the key consumer benefits and risks

associated with Internet of Things (IoT) devices in the “smart home”. The benefits include

convenience, customisation and control. However, there are potential risks for smart home

residents such as data privacy and cybersecurity threats, limitations on interoperability, the need

for lifetime product support, complex supply chains and liability regimes, and product safety.”23

(“Smart Home”. March 2018, papers 268). And another paper on consumer trust in peer platform

markets: “In 2016, the OECD’s Committee on Consumer Policy (CCP) produced a report on

Protecting consumers in peer platform markets: Exploring the issues. The 2016 report examined

a number of the mechanisms that peer platforms have themselves developed to help engender

trust in and use of their services (e.g. initiatives such as ratings and reviews) and raised a set of

questions for further research and reflection. In order to understand better the role and drivers

of consumer trust in PPMs, the CCP conducted an online survey of 10&nbsp;000 consumers

across ten OECD member countries”.24

3.2. ICPEN – On its website, ICPEN has a ‘Guideline on Cross-border disputes’. The

main objective of ICPEN is to encourage practical action to prevent cross-border marketing

malpractice and also encourage exchanges of information. Cross-border complaint information

lodged through econsumer.gov helps ICPEN to identify misleading, deceptive and fraudulent

commercial practices that cross international borders. (https://www.icpen.org/resolve-dispute)

3.3. UNCTAD Working group on e-commerce and on vulnerable consumers – The

Intergovernmental Group of Expert on consumer protection (UNCTAD) has formed in 2017 a

working group on e-commerce (the chair of the Committee is a member) and also a group on

vulnerable consumers.25 This last working group “aimed to develop recommendations for member

states to take into account the specificities of vulnerable and disadvantaged consumers and

adequately protect them, recommended by the UNGCP. Vulnerable consumers are those at high

risk of experiencing difficulties on the market, typically less able to make informed decisions. This

ability is influenced by factors such as: (i) literacy, e.g. ability to read terms and conditions; (ii)

difficult financial situation; (iii) those who suffer long-term sickness; (iv) gender-related issues,

e.g. poorly educated women; (v) lack of access to internet to search information and compare

etc.” (CUTS-Forum, Bulletin n°1 | Monday, July 3, 2017).26 The WG on e-commerce has sent

information on the efforts regarding consumer protection in cross-borders cases, and also on the

work of two other networks: International Mass Marketing Fraud Working Group (IMMFWG)

and Unsolicited Communications enforcement Network (UCENET).

3.4. European Union:

23 See: https://www.oecd-ilibrary.org/science-and-technology/consumer-policy-and-the-smart-

home_e124c34a-en 24 https://www.oecd-ilibrary.org/science-and-technology/trust-in-peer-platform-markets_1a893b58-en 25 Conclusion 12: “Requests the UNCTAD secretariat to convene two working groups, one on e-commerce,

within the scope that takes into account ongoing work at UNCTAD, and another on the protection of

vulnerable and disadvantaged consumers to highlight best practices, to facilitate information exchange and

consultations, and to continue the work from the second session, led and integrated by member States on a

voluntary basis, without financial implications for the regular budget of the United Nations, and to report

to the third session of the Intergovernmental Group of Experts”. 26 http://unctad.org/en/pages/MeetingDetails.aspx?meetingid=1674

a. Expert Group on liability and new technologies

The European Commission has formed an expert group on liability and new technologies that will

be divided in two ‘formations’. The main tasks of the Expert Group is to assist the European

Commission on the applicability of the Product Liability Directive to traditional products, new

technologies and new societal challenges (‘Product Liability Directive Formation’), and assist the

European Commission in developing principles about liability that can serve as guidelines for

possible adaptations of applicable laws at EU and national level relating to new technologies

(‘New Technologies Formation’) (Contribution by Anabela Gonçalves)

b. ECC-NET – European consumer protection cooperation - In 2017, the European Union has

enacted a new regulation for consumer protection cooperation (EU Regulation no. 2394/2017),

which will be applicable as per January 17th 2020: “The European Commission estimates that the

detriment to consumers caused by non-compliance with basic EU consumer rules in certain cross-

border online markets and also by inefficient cross-border enforcement amounts to €770 million

per year. To remedy this, in May 2016 the Commission presented a legislative proposal to review

the existing rules on consumer protection cooperation between enforcement authorities as part

of its e-commerce package. The aim was to clarify the rules, give more powers to national

enforcement authorities and improve their coordination, primarily to enable them to address

unlawful online practices. Parliament and Council reached agreement on the proposal in June

2017, and formally adopted it in November. The new regulation covers ongoing infringements

and those that have already ended, and lays down procedures for cooperation in cases of

widespread infringements of consumer rights that affect consumers in multiple Member States”.27

On EU Regulation (EC) no. 2004/2006 on consumer protection cooperation (also known as the

CPC regulation) lays down a cooperation framework to allow national authorities from all

countries in the European Economic Area to jointly address breaches of consumer rules when the

trader and the consumer are established in different countries. Collectively, the national

authorities form a European enforcement network, the “CPC Network”. The new regulation alters

Regulation no. 2004/2006 and addresses the need to better enforce EU Consumer Law, especially

in the fast evolving digital sphere, strengthening the powers of the competent authorities to

cooperate in the cross-border context, and especially to tackle bad online practices faster:

“It will improve the current framework by:

- Extending the scope of the CPC Regulation to allow for cooperation in new areas. These

new areas include infringements of short duration, such as short term misleading

advertising campaigns. Also included are legislative areas not previously covered, such

as the cross-border portability of online content services, passenger rights, unjustified

geo-blocking, financial services; and Article 20 of the Services Directive, which lays

down the non-discrimination provision for services in the EU.

- Strengthening of the minimum powers of the competent authorities to cooperate in the

cross-border context, and especially to tackle bad online practices faster. These include

the power to carry out test purchases and mystery shopping, to suspend and take down

websites, to impose interim measures, to impose penalties proportionate to the cross-

border dimension of the imputed practice.

- Putting in place stronger coordinated mechanisms to investigate and tackle widespread

infringements.

- Allowing authorities to accept commitments from traders to provide remedies to

affected consumers in cases of widespread illegal commercial practices. The authorities

27 https://epthinktank.eu/2017/10/04/consumer-protection-cooperation/

will also be able to inform the affected consumers about how to seek compensation as

provided for in national legislation.

- Allowing external bodies such as consumer and trade associations (invited to do so by

Member States) and European Consumer Centres to post alerts and signal issues to

authorities and the Commission.” (Contribution by Christoph Benicke)

c. Platforms responsibility to remove illegal content - The European Commission

representative at the UNCTAD’s WG on e-commerce referred to EU enforcement action against

Facebook, Google and Twitter. Consumer protection Agencies in the EU asked these platforms

to remove illegal content and give them three days to do so. EU also put in place the E-

Enforcement Academy to exchange best practices within the EU: “As Part of the New Deal for

Consumers, the Commission will organise expert workshops with authorities and regulators from

all economic sectors. The ‘E-enforcement Academy’ project mobilises EUR 1.75 million for the

national consumer protection authorities and the national consumer-product safety authorities.

New market intelligence sources and analytical methods will be activated and training on

investigative methods adapted to digital markets provided. The Commission will raise consumers’

and trader organisations’ awareness on the possibilities to alert authorities on EU wide

problems”.28

d. Online gambling – The EU gambling market is estimated at around EUR 84.9 billion and

grows at a yearly rate of around 3%. Online gambling is particularly popular with around 6.8

million consumers in the EU and a wide variety of operators offering services. The EU is

enhancing cross-country cooperation to tackle challenges of online gambling.29 EU countries may

restrict or limit the cross-border supply of all or certain types of online gambling services on the

basis of public interest objectives. The national rules focus mainly on consumer protection

objectives, in particular the prevention of problem gambling, the protection of minors, and

prevention of crime and fraud.30 But in a new decision (INCE C-336/14), the Court of Justice of

the European Union (CJEU) held that German criminal authorities must not prosecute

intermediaries of sports betting services, as the relevant stipulations penalising private operators

in Germany do not comply with EU law.31 Also about gambling, the University of Kent has

completed its report on bingo and sent to our Committee. (Contribution by Toni Williams and

Iain Ramsay)

e. Data Protection- In May 2018, EU Regulation no. 679/2016 has entered into force. The

European Union’s ('EU') new General Data Protection Regulation (‘GDPR’), regulates the

processing by an individual, a company or an organisation of personal data relating to individuals

in the EU. It sets data protection rules for all companies operating in the EU, wherever they are

28

file:///C:/Users/cmarques/AppData/Local/Packages/Microsoft.MicrosoftEdge_8wekyb3d8bbwe/TempStat

e/Downloads/Improved%20public%20enforcement%20with%20updated%20rules%20(1).pdf 29 See https://ec.europa.eu/growth/content/enhancing-cross-country-cooperation-tackle-challenges-online-

gambling-0_en. 30 https://ec.europa.eu/growth/sectors/gambling/infringements-court-cases_en . 31 “Judgment of the Court (First Chamber) of 4 February 2016- Criminal proceedings against Sebat Ince -

Request for a preliminary ruling from the Amtsgericht Sonthofen- Freedom to provide services — Article

56 TFEU — Games of chance — Public monopoly on betting on sporting competitions — Prior

administrative authorisation — Exclusion of private operators — Collection of bets on behalf of an operator

established in another Member State — Criminal penalties — National provision contrary to EU law —

Exclusion — Transition to a system providing for the grant of a limited number of licences to private

operators — Principles of transparency and impartiality — Directive 98/34/EC — Article 8 — Technical

regulations — Rules on services — Obligation to notify. Case C-336/14” .

based. The new Regulation has stronger rules on data protection meaning that ‘people have more

control over their personal data’ and ‘businesses benefit from a level playing field’.32

f. Choice-of-court agreement – The choice-of-court agreements are a common practice in the e-

commerce international contracts. In the European Union, the choice-of-courts agreements find

their legal framework in Article 25 of Regulation No. 1215/2012 of the European Parliament and

of the Council of December 12th, 2012, on jurisdiction and the recognition and enforcement of

judgments in civil and commercial matters (Brussels I bis). The spatial scope of application or the

international jurisdiction rules of the Brussels I bis Regulation has its application in those

situations in which the defendant has its domicile in one of the Member-States (Article 4, Section

1). Otherwise, the national jurisdiction rules of the Member-States will be applicable, except in

the situations identified in Article 6, Section 1: in cases of consumer contracts (Article 18, Section

1); employments contracts (Article 21, Section 2); exclusive jurisdiction (Article 24); and choice-

of-court agreements (Article 25). There are special rules in relation to choice-of-courts

agreements regarding insurance contracts (Article 15) and consumers contracts (Article 21),

which have in account the need to protect the weaker party of the contract. However, the

interpretative options of the European Union Court of Justice (ECJ) must be study by our

Committee. (Contribution of Anabela Gonçalves)

3.5. Consumers International - Consumers International (CI), underlined the importance of

consumer trust in the digital world and CI’s studies in this area. It also suggested that the

UNCTAD Intergovernmental Group of Experts on Consumer Protection Law and Policy could

be a good platform to enhance innovative ideas on international cooperation. It referred to the

G20 summit on consumer protection, where international cooperation and vulnerability in the

digital world was addressed. (Contribution by Antonino Serra)

3.6. ISO Guidelines for business-to-consumer electronic commerce transactions- The

UNCTAD´s Working Group on e-commerce establish contact with the Consumer policy

Committee at the ISO working “on good practices on misleading advertising at ISO. ISO

10008:2013 provides guidance for planning, designing, developing, implementing, maintaining

and improving an effective and efficient business-to-consumer electronic commerce transaction

(B2C ECT) system within an organization. It is applicable to any organization engaged in, or

planning to be engaged in, a business-to-consumer electronic commerce transaction, regardless

of size, type and activity. ISO 10008:2013 aims to enable organizations to set up a fair, effective,

efficient, transparent and secure B2C ECT system, in order to enhance consumers' confidence in

B2C ECTs and increase the satisfaction of consumers. It is aimed at B2C ECTs concerning

consumers as a sub-set of customers. The guidance given in ISO 10008:2013 can complement an

organization's quality management system”.33

3.7. Mercosur – On 20 December 2017 Mercosur (Trade Union between Brazil, Argentina,

Uruguay, Paraguay, Venezuela and Bolivia) approved the first Convention on international

protection of consumers, the “Acuerdo Mercosur sobre la ley applicable a los contratos de

consumo”, creating a new connection factor: the law most favorable to the consumer. Inspired on

the Brazilian-Argentine-Paraguayan CIDIP VII Proposal and the 1980 Rome Convention on the

law applicable to all contracts, the new ‘Acuerdo’ follows a Brazilian proposal, which Claudia

Lima Marques had the honor to be the author as an expert of the Brazilian Ministry of Justice.

3.8. Tinker Foundation - Responsible production and consumption is one of 17 Global Goals

that make up the policy blueprint known as Transforming Our World: the 2030 Agenda for

Sustainable Development (2015).34 The United Nations system has addressed consumption and

32 https://ec.europa.eu/info/law/law-topic/data-protection/reform/what-does-general-data-protection-

regulation-gdpr-govern_en 33 See https://www.iso.org/obp/ui/#iso:std:iso:10008:ed-1:v1:en 34 "The 2030 Agenda", available at

https://sustainabledevelopment.un.org/post2015/transformingourworld, last accessed on 17 June 2016.

production patterns in the Global Goals, particularly Goal no. 12, expressing consensus on steps

that need to be taken on a universal basis while considering differentiated responsibilities and

capabilities of states. The Global Goals and related voluntary corporate codes of conduct will

increasingly be reflected in regional and national laws, regulations and policies, reflecting

demands by educated consumers and requiring increased compliance with sustainable practices

in government procurement and in business throughout the life cycle of products and all along

the supply chain. To achieve sustainable consumption and production patterns will require

cooperation of all stakeholders, including consumers, so as the UNGCP. (Contribution by

Catherine Tinker, USA, Stetson University)

3.9. G20 consumer summit. In 2016 and 2017, the G20 organized along with Consumers

International two summits on consumer protection with very interesting conclusions.35 The 2017

G20 Consumer Summit was held in Berlin, having as its theme “Building a digital world

consumers can trust”.36 Some of the conclusions reached are as follow:

“9. We recognize the critical importance of private sector and enterprises in the digital

economy as well as of enabling and transparent legal, regulatory and policy

environments, and fostering open, competitive markets. Recognizing the importance of

enforcing competition and consumer protection laws in the digital economy, which are

conducive to market access, technological innovation in ICTs and the growth of the

digital economy. Fostering favourable conditions, mitigating potential risks, open labour

markets for digital experts and policy environments, mindful of national regulations

hereof, and removing unjustified barriers for inclusive digital economic growth are at the

heart of the G20’s objectives, including through measures to promote universal and

affordable access, expanding infrastructure, improving digital skills, furthering the

development of content that meets local needs on a non-discriminatory basis, and

creating incentives to continue to innovate, compete and invest in digital business models,

encouraging the use of interoperable approaches and relevant international standards

taking into account national interests and priorities. 15. We recognise that digitalisation

is raising new questions surrounding competition. The lines between offline and online

business models are becoming increasingly blurred, and there are new competitive

dynamics. In many cases digitalisation leads to greater competition, transparency and

consumer choice, however, there is also a need to better understand the potential market

impact of new business models. […]

20. G20 Members share the objectives of promoting further inclusive growth and creating

jobs through Digital Trade… Policy decisions should benefit society as a whole,

consumers, and firms of all sizes, particularly MSMEs. G20 Members commit to work

towards a common understanding and improved measurement of Digital Trade in order

to foster informed and evidence-based policymaking in this area”.

On May 15th and 16th of 2018, Consumers International and the Argentinian National Directorate

for Consumer Protection co-hosted the second annual G20 Consumer Summit in Buenos Aires,

Argentina. The 2018 G20 Consumer Summit brought together an international audience of senior

government representatives, consumer leaders and international business to discuss a range of

consumer issues relating to the safety of children’s internet-connected products, emerging

challenges in product safety and food waste.

4- Principle of the Equal protection in digital world and the Enforcement Network - The UN

Guidelines on Consumer Protection reinforce the principle of equal protection of consumers on

the digital world, 37 indicating that the guidelines are intended to protect “consumers using

35 https://www.consumersinternational.org/media/1251/g20-digital-recs-english-visual.pdf. 36 https://www.consumersinternational.org/what-we-do/digital/g20-consumer-summit-2017/. 37 Also the OECD Guidelines (Guidelines for Consumer Protection in the Context of Electronic Commerce,

approved on 9 December 1999 by the OECD Council) states that “[c]onsumers who participate in electronic

electronic commerce that is not less than that afforded in other forms of commerce”, consistent

with the importance of this new principle in this last two years the Committee Members have

report many global scams on the digital world, especially with children and vulnerable consumers.

These schemes can be also seen at the website maintained by the FTC – econsumer.gov.38 As a

solution to these cross-border problems, the national enforcement agencies have tried to cooperate

to solve these consumers’ cases, specially under the guidance of three cooperation network: (a)

ICPEN – International Consumer Protection and Enforcement Network – an organisation

composed of consumer protection authorities from over 60 countries (website:

https://www.icpen.org/); (b) FIAGG-Foro Iberoamericano de Agencias Gubernamentales de

Protección al Consumidor – an organisation created in 2001 with all Latin American

Governmental consumers agencies that since 2006 has also the agencies from Portugal and Spain

in a total of 22 countries (website: http://201.144.226.20/); (c) GPEN- Global Privacy

Enforcement Network, created by the OECD with 38 data and consumer agencies.

These reports of the Committee Members (Hector Valverde Santana, James Nehf, Thierry

Bourgoignie, Gail Pearson, Iain Ramsay, Christoph Benicke, Dan Wei and Claudia Lima

Marques) present three new phenomena that have called the attention of the Committee:

a) A new ‘soft empowerment’ of the consumer agencies through international cooperation and

voluntary consumer agencies networking. This can indicate on side that a global response is

needed, but also that soft law and voluntary cooperation networking is a positive tool to protect

consumer worldwide and the Committee should study this new phenomena.

b) The growing importance of digital global scams against children 39 and with unprotected

consumer data.40 This can indicate that more work of the Committee is necessary on this matter,

although the UNCTAD IGE on consumer protection has call an E-commerce Working Group,

were the Chair of the Committee could act as an expert.

c) The growing importance of the regional actors, the ECC-Net in European Union, as model of

cross-border dispute resolution instrument, the Mercosur in South America, as model to protect

tourists and now with a new Treaty on the law applicable to international consumer contracts

indicating the ‘most favourable law to consumer’ as applicable and the FTC-Canada cooperation

in North America, that solved many scams and cases involving children in games, apps and e-

commerce. It is also to mention the efforts of the Association of South East Asian Nations

(ASEAN) and the African Consumer Protection Dialogue.

commerce should be afforded transparent and effective consumer protection that is not less than the level

of protection afforded in other forms of commerce.” (Accessible in:

http://www.oecd.org/sti/consumer/oecdguidelinesforconsumerprotectioninthecontextofelectroniccommerc

e1999.htm )

38 Econsumer.gov is an international complaints portal, which enables consumers all over the world to

report cross border ecommerce scams. and also a partnership of 38 consumer protection agencies around

the world. It consists of, a jointly sponsored website in 8 languages for filing international fraud complaints

and the sharing of those and other complaints using the Consumer Sentinel Network (CSN), the secure

online database that houses the complaints maintained by the FTC. 39 See for example, a FTC claim that Amazon offers many children’s apps in its appstore for download to

mobile devices such as the Kindle Fire. In its complaint, the FTC alleges that Amazon violated the FTC

Act by billing parents and other Amazon account holders for charges incurred by their children without the

permission of the parent or other account holder. Amazon’s setup allowed children playing these kids’

games to spend unlimited amounts of money to pay for virtual items within the apps such as “coins,” “stars,”

and “acorns” without parental involvement.

40 For example, the FTC charged that toymaker Vtech violated the Children’s Online Privacy Protection

Act (COPPA) by collecting personal information from children without providing direct notice and

obtaining their parent’s consent, and failing to take reasonable steps to secure the data it collected.

It is also to mention the new soft law prepared by Universities, like the Osnabruck University´s

“Discussion Draft of a Directive on Online Intermediary Platforms”.41 This academic project

is a Draft Directive for the European Union. Accordantly Article 1 “This Directive applies where

contracts for the supply of goods, services or digital content are concluded between a supplier

and a customer with the help of an online intermediary platform.” The draft directive is minimal

and regulated the “communication via platform”, the “reputational feedback systems”, the “duty

to protect users” [consumers or suppliers] and the “liability of the platform operator”.

III – Protection of international Tourists at the Hague Conference on Private International

Law

1. State of Art Report: “Protection of Tourists from a national and regional perspective

By Juan José CERDEIRA, University of Buenos Aires, Argentina

Contents: I. Introduction. II) Background and treatment of the subject at a national level. III)

Regional and multilateral instruments. IV) Interaction of sources. V) Some reflections on the

protection provided. VI) Comments on a proposal of multilateral regulation.

I. Introduction

Tourism as a common activity has increased during the second half of the twentieth century, and

it has been considered one of the highlights of the last decades. The activity developed as a

consequence of globalization and the free movement of people within integrated areas.

That evolution demanded not only an appropriate policy and institutional support from

governments, but also new protection rules in order to preserve the responsibilities and rights of

tourists and agencies involved in legal relations.

Argentina accompanied that evolution from both perspectives: regulating the claims of touristic

agencies and developing instruments of cooperation and other juridical tools to facilitate the

protection of the rights of tourists.

In that context, tourism -such as it is conceived today- is a dynamic, multidisciplinary and

complex activity that demands a special ruling attending its particular characteristics, in order to

give legal responses to demands that may arise.

The regulation of these solutions must take into account the special condition of vulnerability of

the weaker party in the legal relationship –“the tourist consumer".

41 See https://www.elsi.uni-

osnabrueck.de/projekte/model_rules_on_online_intermediary_platforms/discussion_draft.html.

Moreover, considering that current technology evolution allows more than 50% of consumers to

hire tourist services in the destination country, and not in their country of origin42, makes it

necessary to protect their rights abroad.

It can be inferred that a comprehensive regulation of the different aspects comprising the

protection of tourists must take into account their vulnerability, the need of guaranteed access to

justice and the importance of cooperation instruments to facilitate the possible pursuit of their

claim.

The purpose of this work is to analyze every problem related to “international tourist protection”.

This scope of approach includes all the situations that tourism presents, such as travel contracts,

travel agents, tourism for students, etc.

The present article gives a paramount view of the legal situation at the national level and its

projection to the regional and international approach.

The protection of tourists In Argentina privileges the consumer categorization above the tourist

one, and national courts have preferably applied the law of the forum –also to international cases-

without any special consideration to their condition of tourists.

Due to that, it is important to work on special ruling of the category “tourist protection”, that

includes international cooperation and that also contributes to find effective responses to the

complexity and variety of situations that arise.

It would be useful to generate international legal cooperation tools that allow the creation of

harmonized safety rules that protect the rights of tourists and visitors abroad. The highly

developed European experience should be taken as the example to offer an effective global

consumer protection.

II. Background and treatment of the subject at a national level.

From the perspective of Argentine national law, the issue of protection of tourist rights has had a

particular treatment, which can be seen from two different parameters:

2.1. Argentina guarantees a broad consumer protection in article 42 of its National Constitution.

To comply with this the Congress passed Law N° 24240 and amendments. In most court cases,

due to their situation of vulnerability, tourists were considered consumers.

2.2. The other perspective goes straight to tourist protection as an activity in itself. This is

regulated by provisions of the Brussels Convention on Travel Contracts (incorporated in

Argentina by Law No. 19,918), its amendments and the Regulatory Decree.

Argentina is party of the 1954 New York Convention on Customs Facilities for Tourism (Law

23,408) and also party at the 1970 World Tourism Organization (Law No. 19644).

Argentina also has a National Law on tourism that regulates the activity and considers tourism as

a socio-economic, strategic and essential activity for national development, which combines

public and private activity. It is a federal law that aims: a) to promote sustainable development;

b) to optimize its quality, and c) to achieve the participation and coordination of the public and

private sectors of society.

III. Regulations and instruments from the bilateral and regional perspective.

42 Schwartz, L. "The Travel and Tourism Contract and Consumer Law" You're on your Law- EETD.

www.estasentuderecho.com.ar/2009/03

3.1. Argentina has signed many Agreements on tourism cooperation with different countries.

Most of them are not especially directed to the protection of tourists but instead, to the promotion

of the tourist activity in those countries.

These conventions also regulate the activity of travel agents and the training of operators in each

State Party. For example, Agreement with the Government of Canada, Convention with the

Republic of Romania (Law No 23,711); Agreement with the Republic of Costa Rica (Law No

23,710); Convention with the Republic of Colombia and Agreement with the Republic of Ecuador

(Law No. 25,046).

The Agreement with Canada has a special ruling, as it "ensures the access to health services for

tourists from both countries". It is the closest antecedent to the specific tourist consumer

protection.

3.2. At the regional level it is necessary to refer to the “Inter Agency Memorandum of

Understanding for Consumer Protection” within MERCOSUR countries. It is an agreement

among Central Authorities which will be analyzed here further below.

IV. Interaction of regulations.

4.1. It has been said that in spite of the existence of the Brussels Convention and Law 18829,

which are specific rules referred to tourism, Argentine jurisprudence has preferred the application

of Consumer Law to the claims involving protection of tourist rights with foreign components.

The application of Consumer Law results from its constitutional hierarchy and the condition of

public order of its rules. The constitutional genesis of consumer law prompted the doctrine and

jurisprudence to react by including the travel contract within the category of "consumer contract".

4.2. It should also be said that current tourism contracts are concluded by electronic media in

Argentina and those contracts have a special protection in argentine law43.

In this context it is necessary to point out that national legislation protects electronic trading.

Some of those rules include advertising for tourism purposes, regulated by Law No 26,104, that

list the requirements to be met depending on the chosen media for its diffusion.44

The National Tourism Law No. 25597/05 gives ample protection to tourists, within the principles

followed by the Enforcement Authority -Ministry of Tourism. This Authority must instrument

effective procedures and regulations aimed at the protection of rights of tourists and the

prevention and resolution of conflicts in those areas45.

The new Civil and Commercial Code46 in Argentina rules not only Consumer Contracts from the

international scope (arts. 2653 and 2654) but also covers special protection to parties in electronic

commerce.

Finally, the former Secretary of Tourism of the Nation -current Ministry of Tourism has issued

several Resolutions on the protection of tourists involving the use of consumer technologies for

development. These are Resolution No. 257/00 on the use of technological facilities and

Resolution No. 904/08 on the implementation and use of sub domain "tur.ar".

43 MEDINA, F. and LAJE, R. International Contracts: Legal Aspects of Electronic Commerce in Tourism

". TOURISM PRO Foundation. Buenos Aires 2013. 44 Borda, A. “The contract with organizations of tourist travel is a consumer contract LL 2008-8-213.

Liability. Doctrine. Essential. 45 Art.37 Law N° 25997- 46 In force since august 1st. 2015-

V) Some reflections on the protection provided.

5.1. As a conclusion, the regulation of the different aspects of tourism in Argentina are covered

by various laws and conventions in force, but the situation changes when speaking of tourists as

“consumers”, who have a special situation of vulnerability.

As a consequence it becomes important to have institutions to safeguard their rights and guarantee

the possibilities of access for their claims in their own language. To solve all these issues

Argentine courts have inclined towards the implementation of the “Consumer Protection Law” in

conjunction with other protective legal sources.

Many court decisions represent a testimony of this criterion. The following are examples of

jurisprudential decisions on that matter:

a) Regarding the nature of "tourist" consumer: The sentence stated that the contractor of a tourist

service must be considered as "consumer" and therefore subject to the application of those rules,

as he is the weaker party in a contract. According to the complexity of the contract he needs to

seek advice from an enabling agent (specialized travel agent or person). ("Gismondi, Adrian

Alejandro v Ascot Travel /Summary" CNCom Room B 17/12/99.);

b) Matters relating to the binding nature of the offer: In one case, an agency advertised a tour

package, on full payment, that included reservations in a determined hotel. The agency hired

another hotel and argued later that it was only a part of the contract. It was decided that the agency

could not be released with that argument and that they should also pay the damages caused

("BOSSO Claudia and Silvia v ATI" House Commercial- Room B 30-06-2003.);

c) Liability Waiver of Travel Agents -Application art. 40 Law 24240: It was concluded that the

travel agency should not compensate for any damage resulting from a terrorist attack suffered by

the contractor of a tourist package, as the intermediary (travel agency) could not have foreseen

the circumstance. ("Giambelluca E. C / Navil Travel Service s / Damage" National Chamber Civil

Division C 11- 07-02.);

d) The existence of contractual clauses and breach of duty of advice. It was decided that

compensation corresponded for having failed to make additional scheduled trips due to lack of

documentation provided by the party who hired the package.

The basis was that the contract was considered an "adhesion contract" as the contracting party

was the weakest part of the contract, and therefore could not be required to prove its negligence

("Felipe, Ana Maria v / Tourism Rio de la Plata SA and other on / Damages" VCCI 26.03.02 J.

Room 1).

5.2. A special consideration must be given to the international visitor as a person who travels

abroad from his home country and who is considered a subspecies of the "tourist consumer"

carrying a special state of vulnerability and ignorance to the new land he visits.

On this particular subject some comments should be made on the "Memorandum of

Understanding (inter) Mercosur" (2005).

It is an interagency agreement between the authorities of Consumer Protection of each of the

MERCOSUR Party States.

The instrument establishes a "pilot project" in which the consumer protection authorities make an

initial attempt of conciliation between parties residing in different States. It can be said that

approximately 80% percent of consumer disputes in the region are solved by the simple

intervention of local authorities.

It is an instrument of administrative cooperation that aims to mediate between parties in order to

solve the situation posed by foreign visitors in the visited country without appealing to a judicial

intervention on the matter.

The instrument applies the law of the country where the claim is directed and that law is applied

by its national enforcement authority. In Argentina and Brazil the Authorities of Consumer

Protection have federal competence and are the interlocutors of their respective local, provincial

or state entities.

In Argentina, international tourists and visitors may choose to claim either under the interagency

“Memorandum” or through an administrative mechanism provided by the Ministry of Tourism of

the Nation. The difference is that the latter mechanism does not have an established procedure.

The MERCOSUR instrument proposes an interesting system through claim forms especially

drafted in order to help tourists in situations that are often presented to visitors abroad. In

Argentina the registered claims have been developed through actions focused on tourist assistance

and the need of reducing consumer disputes.

One of the challenges to the effectiveness of the “Memorandum” is disseminating the protective

information among visiting tourists.

5.3. This mechanism was inspired from another instrument drafted within the European Union -

the "EU-Wide Network of National Consumer Enforcement" on Regulation EC no. 2006/2004-.

This instrument provides cooperation to Consumer Protection within the European Union, and is

a tool designed to provide effective results in resolving cross-border disputes. The Network of

European Consumer Centers (EE-Net) also exists in the same area and offers help and written

advice to consumers (tips for trips and guide for the purchase of goods and services among the

EU countries, Norway and Iceland47).

These centers are cosponsored by the European Commission and national governments and

provide information in all airports or tourism authorities. Both instruments have proven very

useful in the 2012 Olympic Games and proved to be the gateway to the European Small Claims

procedure, facilitating access to justice for consumers in Europe.

This instrument is only useful for Europeans or those who have Europe as their destination.

Meanwhile the main difference between that instrument and the “Mercosur Memorandum” is that

it does not foresee a judicial step.

The Memorandum only covers actions and claims instituted in administrative proceedings

without the possibility of subsequent claim within the justice. To solve those other issues,

international tourists and visitors should use traditional “Mercosur Conventions on Cooperation

and Jurisdictional Assistance”.

5.4. In order to study the feasibility of having a multilateral instrument for the protection of

international tourists, the Brazilian government submitted a project of “Draft Convention on

Cooperation and Access to Justice for International Tourists" to The Hague Conference. The

proposal had the support of many countries of the region and of other states of the globe.

VI) The proposal of a multilateral regulation.

States have been giving responses at a national, bilateral and regional level for the protection of

the rights of international tourists and visitors.

47 LIMA MARQUES, C. "Efforts to include the Tourist Protective Theme in the work of the Hague

Conference Agenda and Brazilian proposal of the Convention on the Protection of Visitors and Foreign

tourists." Magazine COURTS. 22. 90. November -December 2013. Brazil.

The special protection of international tourists and visitors is a dynamic, multidisciplinary and

complex activity, claiming appropriate normative and institutional responses,48

National laws of most countries in the region have tried to solve these aspects, but the situation

turned complicated by seeking to extend the benefits of their laws beyond their borders.

International cooperation among central authorities should be present in the rules and regulations

in each State to face the different situations regarding the same subject. As an example of this

activity, States developed "Best Practices Guidelines" or "Model Forms", seeking the

harmonization and effectiveness of regulations.

A specific multilateral instrument to protect the interests of "tourist consumer" appears to be the

logical and evolutionary consequence of the former analysis.

The task carried out within the MERCOSUR Ministers of Justice Meeting started with the “Santa

Maria Protocol on International Jurisdiction on Consumer Relations” (1995). It is an important

reference and background document on the matter as it contemplates different solutions involving

transnational consumers.

Other MERCOSUR conventions that should be taken into account are the “Agreements for the

Benefit of Litigation without Fee and Free Legal Assistance” that extends the benefits given to

nationals or permanent residents of one State Party, to the nationals and permanent residents of

other State Party.

The need to ensure access to justice for people in vulnerable situations and to strengthen legal

cooperation instruments were also the main themes on the agenda of the last REMJA IX (Meeting

of Ministers of Justice and Attorneys General of the Americas") REMJA-OAS – held in

November 2012, Quito, Ecuador4950

The Conference of Ministers of Justice of Iberian-American Countries (COMJIB) has a "Program

on Access to Justice", that has been developed jointly with EUROSOCIAL II, which emphasizes

the need of ensuring the universal access to justice. Within that Conference forum the

"Convention on the Use of Videoconferencing for Conflict Resolution in Iberian-America" was

adopted. That instrument aimed at the use of new technologies to simplify the access to justice.

International cooperation and access to justice have been subjects of special attention by the

Hague Conference on Private International Law, which closed the “Convention on Access to

Justice” in 1980. This promoted legal and administrative cooperation among Central and

Competent Authorities on the matter.

The Brazilian proposal, that will be developed next, presents different goals in its text to be

analyzed taking into account the former experiences not only from the national level but also from

the regional scope.

48 ALTERINI, A. The Consumer Protection Board in tourism. LADEVI Publisher: Buenos Aires 2008. 49 “Access to Justice ": In the final declaration the scope of the term was defined widely allowing access

not only to court or jurisdiction, but also to extend access to the most vulnerable or disadvantaged sectors

of the population. 50 “International Legal Cooperation in the Americas”: The final declaration pointed out the relevance of

legal cooperation and the progress that had been developed during the biennium, particularly the part

referred to the use of new technologies. It was also agreed to recommend the States to adhere to various

inter-American conventions on legal cooperation in civil, commercial, criminal and family matters.

“Recommendations” on the use of new technologies for legal cooperation and training of agents and central

authorities were also approved. Finally, it was decided to promote relations and common positions among

countries in international forums on the subject.

6.1. It is necessary to ensure effective and flexible access to justice for tourist consumers who are

especially vulnerable people when contracting or visiting other countries.

6.2. It would be useful to include in the draft the use of alternative dispute resolution tools, such

as mediation and conciliation.

6.3. The role of Enforcement Consumer Authorities is extremely important to intermediate in the

resolution of conflicts that arise.

6.4. Effective cooperation and initial administrative assistance should be included. At the same

time, judicial access must be guaranteed for cases not reached by an agreement.

6.5. It also becomes important to clearly define the subjects and the legal terms in the relationship

to which the mechanism applies.

6.6. The fluent coordination and interaction between national authorities with incumbencies on

the matter is necessary for the effective resolution of situations. National coordination coincidence

is the first step to follow and further on the cooperation among them at a regional and international

level is fundamental.

6.7. The application of the legislation of the host State seems to be the most appropriate solution

to solve conflicts on the matter. The law of the tourist consumer’s domicile is also appropriate

once the tourist goes back home.

6.8. The use of electronic tools is relevant for effective cooperation and coordination among

authorities.

6.9. The implementation of appropriate mechanisms and forms for tourist claims become essential

for a proper guarantee protection of tourist consumer rights.

6.10. The harmonizing and informative effect of the use of standard forms should be taken into

account to facilitate the task of dissemination and simplicity in the presentation of claims.

6.11 It is essential to include information channels to solve language barriers and to implement a

"web" page with the rights and guarantees the tourists and visitors abroad have.”

2. The Hague Conference Report on the Tourism Project

By Claudia Lima Marques and Dan Wei

The Hague Project concerning a possible future Convention on Co-operation and Access

to Justice for International Tourists (so called Hague ‘Tourism Project’) originated from the

proposal of the Government of Brazil (and ASADIP) to undertake work in this area. In 2013, the

Brazilian Proposal was submitted to the Council on General Affairs and Policy, together with an

explanatory memorandum detailing the rationale for such an instrument. In 2015, the Council

decided that the Hague Permanent Bureau should conduct a study on the desirability and

feasibility of further work in the area of co-operation in respect of the protection of tourists and

visitors abroad, taking into consideration the compatibility of the topic with the mandate of the

Hague Conference on Private International Law and the work conducted in other fora, like the

UNWTO (Madrid).

The Final Report made by the Consultant Mr. Emmanuel Guinchard (“Study on the

desirability and feasibility of further work on the Proposal on a draft Convention on Co-operation

and Access to Justice for International Tourists” - Final Report) has 96 pages, but Part 5 of the

Report is still being finalised by him51, and will be completed by an expert commission. For the

history of the Tourism Project, see the Conclusions and Recommendations of the 2014, 2015,

2016 and 2017 Meetings of the Council, together with the relevant Preliminary Documents.52 The

Final Report addresses three main issues: the desirability of the Tourism Project, its feasibility,

and any overlap and/or incompatibility with the work of the World Tourism Organization

(UNWTO). The introduction and summary of the findings (p. 1-5) and the conclusions (p. 5 and

57) are, as follows:

Introduction:

“The report starts with the growth of tourism as a major trade sector in the last decades and the

fact that tourism is expected to continue to grow, with international tourist arrivals reaching 1.8

billion by 2030. […]

There is a growing institutional recognition of the need and specificity of tourist protection in

civil matters. Evidence collected up to 11 January 2018 demonstrates that the average tourist may

face several difficulties in his access to justice. These may include:

• An information gap: Tourists often seem unaware of their rights and legal remedies. There is

a lack of express and systematic dissemination of relevant information and assistance. Even pro-

active tourists may find it difficult to identify information. This information gap may lead to a

denial of justice in practice. Persistence of obstacles to access justice in cross-border matters, in

particular the need of foreign consumers to pay a cautio judicatum solvi to access justice and the

difficulties known regarding the administrative assistance made available to tourists.

• Inability to use mediation/conciliation beyond the stay-period in the visited country:

Mediation/conciliation is generally regarded as the most appropriate/ proportionate method to

resolve small claims (arguably a major proportion of tourists’ claims). This method seems often

available in theory; however, it may be unavailable in practice for two main reasons. First,

physical presence is required by law, and the use of distance communication tools to substitute

physical presence is impossible, leading to an unavailability, or discontinuance, of

mediation/conciliation, especially where the tourist’s stay in the visited country is of insufficient

length, or where his return, while available, would not be reasonable. Secondly, even where

distance communication tools are available, other limitations such as language barriers may

hamper appropriate resolution of the claim.

• An inability to initiate court proceedings beyond the stay in the visited country: Court

proceedings may not be available in cases where physical presence is required. Requiring physical

presence has a disproportionate impact on tourists, and especially short-stay tourists. Difficulties

are compounded notably by the information gap and language barriers.

• An impossibility to continue court proceedings beyond the stay in the visited country: Even

if a tourist can initiate proceedings during the stay in the visited country, the potential length of

51 “Part 5. Possible ways forward [MISSING] A. Going beyond the 1980 Hague Convention on access to

justice B. An assessment of the existing Draft convention put forward by Brazil C. An assessment of the

models put forward by the Brazilian proposal D. Other possible solutions E. Conclusion” 52 See “Conclusions and Recommendations of the Council on General Affairs and Policy of the Conference

(8-10 April 2014)”, C&R No 7, “Conclusions and Recommendations of the Council on General Affairs and

Policy of the Conference (24-26 March 2015)” C&R No 8, “Conclusions and Recommendations of the

Council on General Affairs and Policy of the Conference (15-17 March 2016)” C&R No 19, and

“Conclusions and Recommendations of the Council on General Affairs and Policy of the Conference (14-

16 March 2017)” C&R No 12-13, available on the Hague Conference website at < www.hcch.net > under

“Governance” and “Council on General Affairs and Policy”.

judicial proceedings may prove prohibitive to gain appropriate access to justice. The issue is

compounded in situations where proceedings are discontinued in the absence of physical presence

at the hearing, and exacerbated where proceedings last longer than the permitted tourist’s stay due

to visa conditions, in which case delay can be used strategically.

• The unavailability of a small claims procedure tailored for cross-border cases: Tailored

small claims procedures appear particularly desirable in tourism related disputes, which are

typically akin to typical consumer claims, in that they are of small value and of little complexity.

• The absence of a governmentally funded authorities in charge of helping tourists to access

justice: Most States do not have dedicated governmental agencies or bodies charged with

assisting tourists to access justice, although some consumer agencies take on a comparable role.

However, even where such bodies exist, they are often ill-equipped to assist appropriately,

especially in light of time pressures and language barriers.

• The absence of appropriate liaison mechanisms between authorities of the visited country

and the country of the tourist: Where tourists seek to complain to a (consumer) body after their

return, then these bodies regularly have practical difficulties in liaising with the trader, whether

in relation to the facts or even to commence mediation/conciliation. Moreover, the complex

enforcement of any settlement reached would prove a significant deterrent.

The suggested Hague Convention on Cooperation and Access to Justice for International Tourists

aims to address these difficulties by establishing an international cooperation mechanism between

Central Authorities along with provisions on access to justice (in particular cautio judicatum solvi

and legal aid). One of the key underlying ideas is that the intervention of an Authority from the

trader State should often be enough to convince it of the need to seriously take into account the

complaint of the tourist from abroad, whilst offering the tourist the possibility to understand this

complaint in his own language. The tourist is likely to know the contact details of his own relevant

authority with whom he will be able to correspond in his own language. Any mediation attempt

is to be made through the Authorities. The cooperation mechanism would also be used in the

event that the mediation attempt fails.

This report is of the opinion that the mechanism suggested by the Hague Convention is

fundamentally viable and has demonstrated its usefulness within Mercosur and the EU (ECC-

Net). The Tourism Project would build on these successes, albeit at global level. It may be added

that there is a desire for more international cooperation on tourism matters, and those most

familiar with the practical issues faced by tourists/consumers have expressed it at time-to-time.

For example, in 2014, some members of the ECC-Net considered the issue of assistance for non-

EU tourists and suggested a draft protocol to handle such requests from such tourists after liaising

with their North American counterpart.

Nevertheless, this report suggests some amendments and additions to the current suggested Hague

Convention on Cooperation and Access to Justice for International Tourists. In particular, the

definition of tourists may have to be reconsidered in order to be more acceptable by the majority

of Hague Members, and a Good Practices Guide could usefully complement the current text. The

suggested Hague Convention on Cooperation and Access to Justice for International Tourists

would build on the Hague Conference’s vast experience in building networks of Central

Authorities in the field of international civil procedure. This report is of the opinion that the

Tourism Project is compatible with the mandate of the Hague Conference on Private International

Law.

The report, finally, focus on the compatibility of the Tourism Project with the work conducted in

other fora, in particular the UNWTO. It appears that there is no need to examine the work carried

outside the UNWTO when examining the compatibility of the Tourism Project with the work

conducted in other fora as a survey of January 11th 2018, indicated that the major global and

regional organisations do not have any similar project to the one of the Hague Conference.

As for the UNWTO Framework Convention on Tourism Ethics (including its Optional Protocol)

and the UNWTO current Draft Convention on the Protection of Tourists and on the Rights and

Obligations of Tourism Service Providers, they do not appear to overlap or be incompatible with

the Tourism Project. On the contrary, the Tourism Project seems to complement the broader

agenda of the UNWTO, in particular the desire to increase the confidence of tourists as consumers

in tourism service providers highlighted, notably, in the preamble of the UNWTO Draft

Convention on the Protection of Tourists and on the Rights and Obligations of Tourism Service

Providers, as well as the long-term objective of sustainable tourism. The productive working

relationship established between the HCCH and the UNWTO following the contact made in early

2017 culminated in a letter of endorsement of the Tourism Project by the UNWTO in late 2017.

Overall, the Report expresses the view that the suggested Hague Convention on Cooperation and

Access to Justice for International Tourists is both desirable and feasible, whilst being compatible

with the mandate of the Hague Conference and work conducted in other fora.

[…]

1. Desirability

7. The Final Report makes the following key findings relevant to desirability:

• Information gap: Tourists often seem unaware of their rights and legal remedies. There is a

lack of express and systematic dissemination of relevant information and assistance. Even pro-

active tourists may find it difficult to identify information. This information gap may, in practice,

lead to a denial of justice.

• Inability to use mediation/conciliation beyond the stay in the visited country:

Mediation/conciliation is generally regarded as the most appropriate/proportionate method to

resolve small claims (arguably a major proportion of tourists’ claims). This method seems often

available in theory; however, it may be unavailable in practice for two main reasons. First,

physical presence is required by law, and the use of distance communication tools to substitute

physical presence is impossible, leading to an unavailability, or discontinuance, of

mediation/conciliation, especially where the tourist’s stay in the visited country is of insufficient

length, or his return, while available, would not be reasonable. Secondly, even where distance

communication tools are available, other limitations such as language barriers may hamper

appropriate resolution of the claim.

• A persistence of obstacles to access to justice in cross-border matters, in particular the cautio

judicatum solvi.

• Inability to initiate court proceedings beyond the stay in the visited country: Court

proceedings may not be available in cases where physical presence is required. Requiring physical

presence has a disproportionate impact on tourists, and especially short-stay tourists. Difficulties

are compounded, notably, by the information gap and language barriers.

• Impossibility to continue court proceedings beyond the stay in the visited country: Even

if a tourist can initiate proceedings during the stay in the visited country, the potential length of

judicial proceedings may prove to be prohibitive to gain appropriate access to justice. The issue

is compounded in situations where proceedings are discontinued in the absence of physical

presence at the hearing, and exacerbated where proceedings last longer than a stay permitted by

visa conditions, in which case delay can be used strategically.

• Unavailability of a small claims procedure tailored for cross-border cases: Tailored small

claims procedures appear particularly desirable in tourism related disputes, which are normally

akin to typical consumer claims, in that they are of small value and of little complexity.

• Absence of governmentally funded authorities in charge of helping tourists to access

justice: Most States do not have dedicated governmental agencies or bodies charged with

assisting tourists to access justice, although some consumer agencies take on a comparable role.

However, even where such bodies exist, they are often ill-equipped to assist appropriately,

especially in light of time pressures and language barriers.

• Absence of appropriate liaison mechanisms between authorities of the visited country

and the country of the tourist: Where tourists seek to complain to a (consumer) body after their

return, then these bodies regularly have practical difficulties in liaising with the trader, whether

in relation to the facts or even to commence mediation/conciliation. Moreover, the complex

enforcement of any settlement reached would prove a significant deterrent.

8. The Final Report concludes that there is currently no coherent regime that provides appropriate

access to justice and that an international instrument designed to overcome the many current

shortcomings in protecting tourists is desirable.

2. Feasibility

9. The Final Report further concludes that further work on the Tourism Project is feasible, opining

that the draft Convention developed by Brazil in November 2014, as submitted to Council as

Annex I to Preliminary Document No 2 of 2015 (draft 2015 Convention)53, would be a reasonable

starting point to address the issues identified in the Final Report. These issues, which go well

beyond those addressed by the Hague Convention of 25 October 1980 on International Access to

Justice, would particularly benefit from co-operation mechanisms that address the structural

issues identified in the Preliminary Report, and potential issues of trust in foreign institutions /

bodies. A network of dedicated Central Authorities would allow for the cost-effective and

efficient use of already existing resources, while not precluding a future evolution towards fully

dedicated tourist support bodies.

10. The co-operation mechanism envisaged for the Tourism Project is modelled on the networks

of Central Authorities which already operate efficiently and effectively under existing Hague

Conventions.54 These instruments provide daily specialised assistance and facilitate equal, non-

discriminatory access to justice to many people and businesses alike. The HCCH has a long

53 See “Proposal by the Government of Brazil on a draft convention on co-operation and access to justice

for international tourists”, Prel. Doc. No 2 of January 2015 for the attention of the Council of April 2015

on General Affairs and Policy of the Conference, Annex I, available on the Hague Conference website (path

indicated in note 1). 54 Including for example the Convention of 15 November 1965 on the Service Abroad of Judicial and

Extrajudicial Documents in Civil or Commercial Matters; the Convention of 18 March 1970 on the Taking

of Evidence Abroad in Civil or Commercial Matters; and the Convention of 25 October 1980 on

International Access to Justice.

tradition and specific expertise in developing such networks as well as in devising innovative and

harmonised international civil procedure and private international law solutions necessary to

ensure their effectiveness and efficiency.

11. Thus, as this particular aspect is not further developed in the Report, the PB would like to note

that it is aware of the important cost implications associated with the establishment of such a

mechanism.

3. Overlap or incompatibility with work in other fora

12. The Consultant also analysed whether the Tourism Project may overlap, or is incompatible,

with work being done in other fora. Relevant work is currently being undertaken by the UNWTO

to develop the draft Convention on the Protection of Tourists and Rights and Obligations of

Tourism Service Providers (draft UNWTO Convention) and its material scope of application. The

Final Report identifies Assistance in Emergency Situations and Package Travel and

Accommodation as topics covered by the draft UNWTO Convention, but concludes that that

Convention does not cover specifically access to justice, save possibly in an ancillary way.

Accordingly, the two projects do not overlap, but they are rather complementary to each other.

13. This conclusion has been confirmed by the UNWTO, which stated in a letter of endorsement

dated of December 19th 2017, as follows: “[…] the HCCH Project complements work undertaken

by the UNWTO in relation to both the UNWTO Convention and UNWTO Framework. We are

also pleased to confirm that, considering their relevant scopes, there are currently no overlaps of

the work undertaken by the UNWTO and the HCCH respectively”.55

E. Conclusion

15. The Consultant’s Final Report concludes that work on the Tourism Project is desirable; is

feasible; and that the work of the HCCH and UNWTO neither overlap nor are incompatible with

each other. To the contrary, the Final Report concludes that the work made by both organisations

in this area is complementary.

16. Members are asked to consider the findings of the Final Report, without prejudice to the

contents of Part 5 that are still to be provided by the Consultant, the establishment of a

representative Working Group, which will present its assessment on the possible next steps of the

process to the Council on General Affairs and Policy.

[…]

D. Conclusion

It appears that, despite some good will and innovative practices at times or venues, overall, the

tourist faces several difficulties in his access to justice. These include the fact that the tourist is

often not specifically made aware of his rights and legal remedies (or explicitly and systematically

told where to seek relevant information and assistance); that he may not be able to start or continue

proceedings from abroad (his physical presence being required); that small claims

procedures/courts are often not available to them (or, where they are, they are not normally

designed for cross-border cases); or that should he complain to his local consumer body, there is

55 A copy of the UNWTO letter of endorsement is attached as Annex II.

no cross-border cooperation mechanism with the fellow body (if existing) in the visited country,

except in a few regions. Several States are aware of the specific difficulties faced by tourists and

are exploring options.

The mechanisms in place in regional organisations, such as the EU, are of clear benefit to tourists,

as practice has proven. However, they do have weaknesses as to geographical limitations. A

properly designed Hague Convention on Cooperation and Access to Justice for International

Tourists could build on these mechanisms in order to ensure a full access to justice, whilst

benefiting from their experience.

The final report is very positive about the continuation of the Tourism Project. The Committee

on International Protection of Consumers expresses our gratitude for giving us the honourable

opportunity to attend the 2016, 2017 and 2018 meeting of Council on General Affairs and Policy

of the Conference as an observer at the efforts on the Convention on Co-operation and Access to

Justice for International Tourists. According to the discussions of the 2018 meeting and the

Conclusions & Recommendations adopted by the Council (paragraph 8), it is imperative to

continue fighting for the establishment of a representative Experts’ Group in the future to promote

the current work of the Hague Conference on Private International Law.

IV– Future activities and the Open session

Considering the achievements of the Committee on International Protection of Consumers in all

these years and the ongoing projects at the Hague Conference and UNCTAD, we suggest to renew

our mandate for another two years.

At the Hague Conference we have nominates Professor Dan Wei, General-Rapporteur of our

committee, Full Professor of the University of Macau, Special Administrative Region of China,

to participate in the Hague Experts’ Group, in order to continually contribute for the establishment

of a representative Experts’ Group on the Hague Tourism Project and the work of the Hague

Conference.

At the UNCTAD’s IGE on Consumer Protection we supported the e-commerce Working Group

meeting held in Geneva on July 9th and 10th, 2018. Besides, we also helped Brasilcon Institute on

a side event held on July 10th 2018, on the Tourism Project analysing the Final Report of the

Consultant and the way forward on this important project.

The Committee will host an ‘Open Session’ at the Sydney Biennial ILA Conference: Developing

International Law in Challenging Times. The preliminary program is as followed:

2018 Biennial Conference of the International Law Association

Hosted by the International Law Association – Australian Branch

Developing International Law in Challenging Times

Intercontinental Hotel, Sydney, Australia

From August 19th, 6:00pm to August 23rd, 12:00am

TUESDAY, August 21st, 11:00-12:30 Open ILA Committee and Interest Group

Working Sessions: International Protection of Consumers Committee

Chair: Lucas Lixinski, NSW

Presentations:

- Dan Wei: The Report of the Committee on international Protection of Consumers

- Claudia Lima Marques, The 2017´s MERCOSUL Treaty on the law applicable to

international consumer contracts: a new model on international consumer protection?

- Gail Pearson: The UNCTAD´s IGE work on consumer protection

- Luke Nottage: New developments in Australia and the Region on international

protection of consumers

- Juan Cerdeira: The protection of tourists at the Hague and at the UNWTO Madrid