Mr Alan SIU, Deputy Secretary

for Information Technology and Broadcasting

A Clear Legal Framework for Electronic Transactions

Need for a Clear Legal Framework

• Many legislation were written before the advent of e-commerce

• By requiring the use or keeping of paper documents, some legislation become barriers to e-commerce adoption

• uncertainty as to the legal status of electronic records dampens public confidence in e-commerce

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Electronic Transactions Ordinance

Solution adopted in Hong Kong ...

• Enactment of the Electronic Transactions Ordinance

Approach ...

• Largely Follow the United Nations Commission on International Trade Law - Model Law on Electronic Commerce

• Make reference to legislation elsewhere

• Adapt to local situation

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Electronic Transactions Ordinance

Scope ...

• Gives electronic records and digital signatures the same legal status as that of their paper-based counterparts

• Establishes a voluntary recognition scheme for certification authorities operating in Hong Kong

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Legal Recognition of Electronic Records and Digital Signatures

• Electronic records can be used to satisfy a requirement in law for information to be -– given in writing;– retained; or– retained or presented in original form

• Digital signatures can be used to satisfy a requirement in law of a signature

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• Contracts shall not be denied legal effect solely on the ground that electronic records are used in their formation

• Use in communication between two non-government parties under law is subject to mutual consent

• No impact on specific statutory provision on electronic process, e.g. Import and Export Ordinance, etc.

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Legal Recognition of Electronic Records and Digital Signatures (Cont’d)

Exemption of Generic Items

Exemption

Government conditions

of grant and lease

Government conditions

of grant and lease

negotiableinstruments wills and trust

documents relating to land and

propertytransactions

stamp duty instruments

(non-listed stocks)

oaths and affidavits statutory declarations

judgments andcourt order

power of attorney

search and arrestwarrants

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Exemption of Judicial Proceedings

Court of Appeal Court of Final Appeal Court of First Instance

District Court

Obscene Articles TribunalLabour Tribunal

Small Claims Tribunal Mental Health Review Tribunal

Magistracy

Lands Tribunal Coroner's Court

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Exemption of Specific Statutory Provisions

• Exemption is made in cases where electronic information cannot be accepted by Government bodies for operational, technological or other reasons under law

• Only less than 200 statutory provisions (out of 44,000 in the laws of Hong Kong) are exempt

• Government has taken the lead in accepting electronic submissions under the bulk of the legislation

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Recognition Scheme forCertification Authorities (CAs)

• CAs may apply to Government for recognition on a voluntary basis

• Hongkong Post is a recognized CA under the Ordinance

• There is no exclusivity in CA services

• Number of CAs in Hong Kong to be determined by the market

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Legislative Programme

• Passage of the ETO by LegCo in January 2000

• Commencement of provisions in stages to tie in with enactment of subsidiary legislation

• The last batch of provisions of the ETO has come into operation on 7 April 2000

• Review of legislation in 18 months

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Situation Elsewhere

• UK, Canada, Australia, Singapore and South Korea have enacted comprehensive legislation on electronic transactions

• Germany, Malaysia and some states of USA, e.g. Utah, have enacted legislation on digital signature

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The End