Oxford University
University of Washington
Cape Town Convention Project
The Cape Town Convention’s International Registry:
Decoding the Secrets of Success in
Global Electronic Commerce
Roksana Moore
Soton
Decoding the International Registry’s Success
• Introduction
• Examples of older global e-commerce systems
– Slow, painful process of building a global network
• Cape Town Convention
– Governance and technology design decisions
• Success Factors
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Concrete “Value Proposition”
Mandatory, Formal Regime
Collective Action Problems
Mature Technology
Organic Development
Responsive Governance
• But is this a model that can be reproduced in other fields?
Introduction
• Cape Town Convention based on central
registry for security interests
• Many examples of successful electronic
commerce systems for reference
– International Registry is uniquely “organic”
• Law, technology & business factors all
contribute to success
• Compare and contrast with other systems to
isolate specific success factors
Airline Reservation System
• Adoption of jet aircraft triggered “paperwork
crunch” in airline industry
– Isolated islands of computerization inside airlines
• Deregulation unleashed competition, airlines
with CRS wanted to exploit leverage
– National regulators intervened
• Rise of Internet travel sites dis-intermediated
travel agents
– End-to-end electronic processes replace paper
• Regulations abolished as competition among
“global distribution systems” grows
Tested Telex to SWIFT
• Banks were early adopters of information &
communication technology
– Telegraphs transmit instructions, but how to authenticate
• Encryption systems based on paper code books, physical
controls, separation of functions inside banks
– Inefficient but reasonably secure
• Bankers for global association to develop global
communication network
– Only messages, clearing and settlement by other means
• SWIFT functions regulated by private law in each country
– Service organization supports banks
– Continuous innovation in information security and standards
Digital Signatures
• Technological answer in search of a question
– Business case for adoption weak, 1990s electronic signature
laws did not create statutory mandate for adoption
• US FDA requires signatures on all documentation related
to testing of pharmaceuticals before marketing
– SAFE BioPharma trade association developed to replace
paper with electronic records
– US FDA remains silent on compliance
• Slow uptake by industry of standards-based solutions
– Reinvent SAFE as something else? Cloud computing for
electronic health records?
• What happened to Identrust? BOLERO? Covisint?
Payment Cards
• ATM cards permit consumers to access bank services
after hours
– Slow development and adoption of standards create global
network
• Credit cards permit consumers to access line of credit
for any retail purchase
– Slow replacement of paper-based clearing and settlement
creates global network
• Platform operator of two-sided market sets pricing
policies for banks, merchants and consumers
– National regulators now intervening to limit prices
International Registry I
• Governance
– CTC authorizes creation of International Registry
• No international interest unless recorded in International
Registry
– CESAIR and AWG provide continuous feedback
– Third party customer surveys/market discipline
• Organization
– 24/7 global access
– Notice based registry, mere ministerial function
– Registrar liable for negligence, but not responsible for
content of documents filed
International Registry II
• Technology
– Classic Public Key Infrastructure
– International Registry opens “accounts” for user entities
– User entities store credentials on one computer
• Loss of computer means new credentials must be issued
• Experience since 2006 launch
– Initial boom in activity, slow down during Global Financial
Crisis, slow recovery
– Continuous technological and service innovations in
response to stakeholder feedback
– Continuously rising customer satisfaction survey results,
continuously falling liability insurance premiums
Success Factors
• Concrete Value Proposition
– Like CRS, SWIFT, card networks, unlike digital signatures
• Mandatory formal public international law regime
– Hard law simplifies technology and business models
• Small number of manufacturers and airlines reduce collective
action problems
– Unlike CRS, SWIFT, card networks
• PKI is mature technology that is cheap relative to cost of aircraft
equipment
• Organic development (“born digital”)
– No business process reengineering/migration from paper required
• Responsive governance
– Transparent processes, active dialogue with stakeholders
– Cost recovery, non-profit business model
Conclusion
• International Registry is an extraordinarily
successful global electronic commerce system
• Success factors can be readily identified
• But are very difficult to reproduce…
– Interests in maritime equipment
• J.K Winn, The Cape Town Convention’s
International Registry: Decoding the Secrets
of Success in Global Electronic Commerce
• http://papers.ssrn.com/sol3/papers.cfm?abstr
act_id=2118963