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Major boost with Sri Lanka harmonising e-commerce legislation with new amendment


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  • Harmonises Sri Lankan law with international UN ECC standards
  • Boost for commerce, business and trade in digital era
  • Promotes greater efficiency and transparency in service delivery by Government agencies and courts
  • New standards promote Sri Lanka as a hub for e-commerce and e-Business dispute resolution
  • New standards for time and place of dispatch and receipt of electronic communications and contracts formed hrough automated messages systems
  • Enhanced Govt. revenue through paperless transactions
  • The new definition of “Electronic Signatures” covers all new forms of technologies  and facilitates the use of biometric authentication methods
  • Initiative led by Digital Infrastructure Ministry and ICTA

 

In a major boost for commerce, business and trade in the digital era, Parliament yesterday approved the Electronic Transactions Amendment Bill. 

It was presented to Parliament by the Minister of Telecommunications and Digital Infrastructure, Harin Fernando. The Digital Infrastructure Ministry took the lead initiative with the ICT Agency (ICTA) to prepare this latest amendment.

“The new amendment harmonises the Sri Lankan electronic transactions legislation fully in line with the UN Electronic Communication Convention (UN ECC), the international standard for e-commerce legislation. Sri Lanka became the first country in South Asia and the second country in Asia (after Singapore) to adopt UN ECC,” said ICTA Director/Legal Advisor Jayantha Fernando.

Sri Lanka ratified UN ECC in July 2015 and ICTA took the lead initiative in close collaboration with UNCITRAL and the Ministry of Foreign Affairs. Besides Singapore, countries in 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 the Philippines are signatories to the UN ECC. 

The newly-approved amendment 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 the Government and courts in Sri Lanka.

Enhancing trade, business and commerce

The amendment will ensure greater legal certainty for e-commerce and e-Business providers who wish to use Sri Lankan law as the applicable law and ensure international validity for electronic contracts. This will create greater trading opportunities for Sri Lankan SME’s with state parties to the UN ECC. 

In addition, it will also bring clarity and predictability to the legal value of the use of electronic communications in cross-border trade with other contracting states.

It will also ensure legal validity for other international legal instruments as well as cross-border fund transfers, including the 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 arbitration.

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

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 mCash) that 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 and business transactions within the current regulatory framework (e.g. recent approval for ‘Pay-Here’). These payment options can be used to enhance trade, commerce and business using the new Electronic Transactions Amendment.

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 make the transition 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

Section 8 of the Electronic Transaction Act has facilitated many electronic government transactions and helped improve efficiency (e.g. eVisa at Department of Immigration and Emigration, e-Revenue Licenses at Department of Motor Traffic, payment of rates and taxes online at municipal councils, etc.).

The new amendment will strengthen the existing provisions to move Government transactions into 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 can be done by formulating regulations under the Electronic Transactions Act, based on the provisions in the new amendment.

The amendment will also facilitate the use of biometrics authentication technologies to ensure the effectiveness of digital certificates and other forms of 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 liberalised regime for the use of Electronic Signatures and a governance framework to ensure inter-operability between authentication technologies.

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 court. This will enhance the ability to adopt e-filing in original courts which are not governed by the Supreme Court and appellate procedure rules.

 


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