Legal Briefing: The Electronic Transaction Amendment Act: A step to the digital future?
Digitalisation continues to assimilate itself into every aspect of everyday life, as almost everything requires a “digital equivalent”.
Singapore has acknowledged the importance of these “digital equivalents”, especially in documents, and has now taken steps to facilitate the digitalisation of categories of documents that have, until now, required only a physical document.
The Electronic Transactions Act (ETA) is the framework that provides legal certainty for digital transactions and puts a structure for secure electronic signatures in place.
According to legal firm Rajah & Tann, the ETA aims to facilitate e-commerce and the electronic filing of documents. It establishes legal recognition of selected electronic documents in specified circumstances and also establishes uniformity of rules and regulations and standards regarding the authentication and integrity of electronic documents.
On 19 March, the Electronic Transactions (Amendment) Act 2021 came into force. According to the Infocomm Media Development Authority (IMDA), this is the second comprehensive review of the ETA since it was first enacted in 1998.
With the Amendment Act, the ETA has now been modified to adopt the Model Law on Electronic Transferable Records of the United Nations Commission on International Trade Law (UNCITRAL). The UNCITRAL Model Law on Electronic Transferable Records allows the creation and use, domestically and internationally, of electronic forms of transferable documents or instruments or otherwise known as electronic transferable records.
Singapore is one of the first major trading hubs to adopt this model.
These transferable documents or instruments are mainly used in international trades in industries such as shipping, logistics, and finance.
In the amended ETA, the provision supporting the legal enforceability of electronic records and signature now applies to the following:
- Transferable documents or instruments such as bills of exchange, promissory notes, and bills of lading;
- Other documents such as consignment notes and warehouse receipts.
Amongst these, the Singapore government highlights the digitalisation of bills of lading which is a key document in maritime trade.
The adoption of electronic Bills of Ladings (eBLs) will enable the shipping industry to benefit from faster transactions, cost savings, and lowered fraud risks through the use of digital authentication systems). Singapore has been encouraging the adoption of eBLs and has conducted technical trials through the TradeTrust digital utility.
More digitisation to come
Certain kinds of documents are still excluded for digitisation in the amendment but Minister for Communications and Information S. Iswaran said the amendment to the ETA may soon let the government introduce ways to digitise documents, such as lasting powers of attorney (LPAs).
LPAs are important documents that allow an appointed person to make medical and financial decisions on behalf of someone else should they lose their mental capacity. The current laws only allow for LPAs in physical form.
The Ministry of Communications and Information (MCI), together with the IMDA, has consulted various industry stakeholders via two public consultations and a targeted industry consultation exercise for the ETA review.
“The Government will continue to work closely with the industry to study the feasibility of extending the applicability of the ETA to more types of items which are currently excluded,” the MCI advised. “When an item is ready to be removed from the exclusion list, the Government will work towards the implementation of the necessary legislative and regulatory frameworks and corresponding safeguards to protect the vulnerable and less digitally savvy.
“Together with close industry partnerships, the amendments will ensure the ETA continues to be progressive in the Digital Economy.”
The right direction
Rajah & Tann says that the amendment in the ETA is a step in the right direction for Singapore.
“In the areas of shipping and international trade, this represents an important development in the modernisation of the industry, allowing it to improve its efficiency and enhance Singapore’s position as a maritime and trade hub,” the legal firm said.