New e-commerce laws major boost to Sri Lankan trade and commerce

November 30, 2017

The Electronic Transactions Amendment Bill was approved by the Sri Lankan parliament on Monday, providing a major boost to commerce, business and trade in the digital era.

It was presented to Parliament by the Minister of Telecommunications and Digital Infrastructure. The Digital Infrastructure Ministry took the lead initiative with 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 second country in Asia (after Singapore) to adopt UN ECC’,” said Jayantha Fernando, Director/ Legal Advisor of ICTA in a media statement.

Sri Lanka ratified the 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 Republic of Korea and Philippines are signatories to 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 Government and the courts in Sri Lanka.

Mr. Fernando said 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 UN ECC. In addition, it would also bring clarity and predictability to the legal value of the use of electronic communication in cross-border trade with other Contracting States.

He also noted that the amendment will also ensure legal validity for other international legal instruments as well as cross border funds 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 future arbitration awards can be enforced in paperless form with ratification of UN ECC, creating an opportunity for Sri Lanka to be a hub for electronic commerce and business dispute resolutions and arbitrations.

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.

Mr. Fernando said 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), who 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.

Section 8 of the Electronic Transaction Act has facilitated many state electronic transactions and helped improve efficiency (eg: 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 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.

He said 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 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 would enhance the ability to adopt e-filing in original courts, which are not governed by Supreme Court and Appellate procedure rules.

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