Major boost for electronic transactions with new amendment

The Electronic Transactions Amendment Bill, approved by parliament this week, will be a major boost for commerce, business and trade in the digital era. This is the first amendment to the Electronic Transactions Act. No. 19 of 2006, presented to parliament by the telecommunications and digital infrastructure minister. The Digital Infrastructure Ministry worked closely with the ICT agency (ICTA) to prepare this latest amendment.

The new amendment will bring the Sri Lankan electronic transactions legislation fully in line with the UN Electronic Communication Convention (UN ECC). Sri Lanka became the first country in South Asia and second country is Asia (after Singapore) to adopt the UN ECC standards. Sri Lanka ratified the UN ECC in July 2015. The ICTA took the lead initiative to facilitate the process in close collaboration with the United Nations Commission on International Trade Law (UNCITRAL) and Foreign Affairs Ministry.

Besides Singapore, countries in the Asia-Pacific such as China, Australia, Thailand and Vietnam are already preparing domestic legislation to ratify the UN ECC, while the Republic of Korea and Philippines are signatories to UN ECC. The new amending legislation will greatly improve Sri Lanka’s ability to trade with these countries using digital platforms. In addition to enhancing the methods of doing trade, commerce and business, the new amendment will also help improve procedures and promote efficiency and transparency in service delivery by government and courts in Sri Lanka.
Enhancing trade, business 
and commerce
1. The amendment will ensure greater legal certainty for e-commerce and e-business providers who wish to use the Sri Lankan law as the applicable law and ensure international validity for electronic contracts. This will create greater trading opportunities for Sri Lankan small and medium enterprises with state parties to UN ECC. In addition, it would also bring clarity and predictability to the legal value of the use of electronic communications in cross-border trade with other contracting states.

2. It will also ensure legal validity for other international legal instruments as well as cross-border fund transfers, including enforceability of Foreign Arbitration Awards, enhancing the ability of Sri Lanka to fast-track its move towards paperless trade facilitation through a single window platform. In the future, Arbitration Awards can be enforced in paperless form with the ratification of UN ECC, creating an opportunity for Sri Lanka to be a hub for electronic commerce and business dispute resolutions and arbitrations.

3. The new legislation will improve trust and confidence and legal certainty for all types of business transactions using electronic means, thus improving competitiveness and ability to do business with greater efficiency.

4. Sri Lanka also has an advanced inter-bank payment and settlement system facilitating immediate bank-to- bank transfers carried out in a secure manner using electronic signatures. This is supplemented by two mobile payment licensed operators (Dialog’s Ez-cash and Mobitel’s M-cash), which facilitate mobile commerce and peer-to-peer payment options (persons-to-person transactions). Recently, the Central Bank of Sri Lanka formulated a mechanism for e-commerce payment providers to use multiple payment options for e-commerce/business transactions, within the current regulatory framework (Eg:- recent approval for ‘Pay-Here’). These payment options can be used to enhance trade, commerce and business using the new Electronic Transactions Amendment.

5. Based on UN ECC, the amendment law defines the time and place of dispatch and receipt of electronic communications between contracting parties, tailoring traditional contract rules to transform into the digital era. The amendment also allows for the enforceability of contracts entered into by automated message systems, formed without human interventions.
Improving processes for delivery of services by government entities 
and courts

6. Section 8 of the Electronic Transaction Act has facilitated many electronic government transactions and helped improve efficiency (Eg: e-visa at Immigration and Emigration Department, e-revenue licences at Motor Traffic Department, payment of rates and taxes online at Municipal Councils, etc).

7. The new amendment will strengthen the existing provisions to move government transaction to the digital era, through the use of stronger and more secure electronic-based authentication methods for all categories of government transactions, including electronic tax filings, e-procurement and other revenue-based transactions. These transformations could be done by formulating regulations under the Electronic Transactions Act, based on the cross-cutting provisions in the new amendment.

8. The amendment will also facilitate the use of biometrics-based authentication technologies to ensure effectiveness of digital certificates and other forms digital IDs. The new definition of ‘electronic signatures’ in the amending law is broad and futuristic enough to cover all new forms of authentication methods in the digital era. The amendment also provides a liberalized regime for the use of electronic signatures and a governance framework to ensure inter-operability between authentication technologies.

9. Another unique feature of the amendment is that it facilitates electronic filing of any application, petition, plaint, answer, written submission or any other document in any courts. This would enhance the ability to adopt e-filing in original courts, which are not governed by Supreme Court and Appellate procedure Rules.