This post was contributed by Guillaume Payan, who is Law Professor at the University of Toulon.
Under the direction of its president, Marc Schmitz, the International Union of Judicial Officers (UIHJ) has edited a code, published by Bruylant, on digital enforcement (Global Code of Digital Enforcement). This Global Code was officially presented at the 24th World Congress of this organisation, held in Dubai in November 2021 (as announced here).
The result of the work of the Scientific Council of the UIHJ, this Global Code is an extension of the Global Code of Enforcement published in 2015, dealing with very current issues related to the dematerialization of debtors’ assets.
As designed by the UIHJ, the Global Code of Digital Enforcement is not legally binding. Nevertheless, there is reason to think that it will have concrete consequences in national law and on the work of intergovernmental organisations. It promotes a balanced enforcement system, by defining global enforcement standards that respect fundamental rights.
Although it essentially provides for substantive rules, the issues of private international law are not ignored, in particular regarding the applicable law to enforcement and the international jurisdiction of enforcement agents.
One of the great interests of this publication is to address the interaction between enforcement procedures and the digitalisation of Justice from all its angles. Thus, not only are dematerialised enforcement procedures considered, but also the use of enforcement procedures on digital assets. As such, the issue of the seizure of crypto-assets is dealt with in a very timely manner.
Available in both French and English, the Global Code of Digital Enforcement is structured in 7 parts, which are preceded by a Preamble which clearly sets out the context of the work (“Enforcement in the digital age”).
General Principles of Digital Enforcement
The first two articles relate to “respect for fundamental rights” and respect for “the ethical principles of digital use”, such as respect for human dignity, non-discrimination or even respect for personal data. This choice must be approved because digitalisation should only be considered as a tool in the service of rights that are prior and superior to it. In other words, this digitalisation should not be an end in itself and can only be conceived with respect for human rights. There are also a series of guarantees aimed at protecting against the risks associated with the use of artificial intelligence. For example, the code establishes a right to appeal to a judge in order to sanction an irregularity, to control the proportionality of an enforcement measure or to compensate a damage. In addition, there are obligations imposed on various parties (e.g. foreign enforcement agents, debtors, third parties) to cooperate in enforcement.
Applicable Law to Enforcement
The principle is that identified and accessible digital assets are seized in accordance with the law of their location, in compliance with the principle of territoriality of enforceability. With regard to unidentified or inaccessible digital assets, it is recommended to apply the law of the State that controls or ordered the enforcement.
Principles Specific to the Activity of Judicial Officers or Enforcement Agents
The main idea here is to allow enforcement agents to use digital tools to carry out their activities. With good reason, the question of access to information on the debtor’s assets is considered in a comprehensive manner (in particular, access to dematerialised registers and the use of drones).
Digital Enforcement Procedure
After outlining the general principles (such as the creation of dematerialised seizures, while maintaining physical non-digital seizures), the focus here is also on electronic access to data. To ensure efficiency, the possibility of electronic auctions is established. The rights of the parties are nevertheless preserved based on provisions relating to the security of digital procedures (e.g. secure cross-border communication).
Enforcement Against Digital Assets
In order to be able to carry out enforcement on digital assets, the procedures for locating and seizing them must be adapted. In this regard, it is specified, for example, that national laws should define seizure procedures adapted to digital assets and regulate their legal regime.
Use of Artificial Intelligence in Enforcement
Artificial intelligence is intended to help enforcement agents to assess the appropriate enforcement measures. While guaranteeing the right to appeal to a judge to compensate any damage suffered during an automated enforcement, it is important to allow the enforcement agents the possibility of setting up a “smart enforcement” mechanism. The use of blockchain technology is also key for the enforcement agents, together with the debtor and the creditor, to set up an automated process of compulsory enforcement, particularly when payments are made by cryptocurrency.
Seizure of Crypto-Assets
Access to crypto-assets and the procedure for seize crypto-assets are successively detailed. For example, it is recommended to create a national crypto-assets register and an obligation for the debtor to declare his crypto-assets to the enforcement agent in charge of enforcement. In addition, a distinction is made between the seizure of crypto-assets in the hands of a third party (e.g. exchange platform) or the seizure in the hands of the debtor.