Section D - Legal and Regulatory Requirements
Note: Information about the Legal and regulatory Requirements must be provided after consultation with the legal department of the government and it is recommended that a legal representative (someone who is familiar with the local legal framework) be consulted.
A certain minimum legal framework is required for the provision of electronic commerce services. The absence of the parties
meeting physically to transact implies that the local laws need to provide some protection and recognition for electronic commerce transactions and the use of some technology components for electronic commerce. In some countries, the existing legal framework fulfils the necessary environment for electronic commerce. This section deals with some issues that need to be addressed.
The type of information needed here is the status of the legal framework concerning these issues. Advice and practical
information could be provided to ECDC partner countries on how and where to get assistance in addressing the legal issues.
If you need further references, click on the following links to visit the sites which contain some useful information on how other countries are addressing these issues:
The ITU role (within the objectives of the ECDC Project) is limited to assisting its partners in identifying the legal issues necessary for establishing the environment for electronic commerce.
Privacy and data protection
Does your current legal framework provide the protection of personal and other forms of data collected via electronic means or using traditional forms of data collection? Normally such laws deal with who has access to this data and what can it be used for (can the names, phone number and profiles of users, consumers, business partners be sold?).
The Malaysian Government drafted a new legislation on personal data protection (December 2000) before presenting it to the Parliament in the middle of year 2001.
Existing legal frameworks on privacy and data protection issues in the EU.
Intellectual Property and Copyrights
Provide information on the status of the protection of intellectual property and copyrights. Indicate if there is a national
intellectual property organization in the country or if the country is a member of a world or regional intellectual property organization, such as the World Intellectual Property Organization (WIPO). This international organization has published a paper on "Primer on Electronic Commerce and Intellectual Property Issues".
For further information on Intellectual Property (IP) and Copyrights see the EU legislation.
Digital Signature and Electronic Contracts
Do your current local laws recognize digital signatures and electronic contracts? Is the medium used to establish a contract or to sign a document? What is the status of your current legal framework regarding digital signatures and electronic contracts?
The Internet Law and Policy Forum (ILPF) prepared a Survey of International Electronic and Digital Signature Initiatives that can be found here.
The UNCITRAL Uniform Rules on Electronic Signatures (Draft) (08.12.99) can be seen in several languages at this web site.
The American Bar Association (ABA), Section of Science and Technology Information Security Committee has prepared a Digital Signature Guidelines Tutorial that can be viewed here.
The United States (U.S.) legislation and regulations can be observed here.
Information on the EU Directive on Electronic Signatures (13.12.1999) in English, French, Spanish, and Portuguese can be viewed here.
The United Kingdom (U.K.) government has launched an Electronic Communications Bill (14.03.2000). For more
details see the House of Lords web site.
For more information on the validity of electronic contract, see the new Mexican legislation, which grants validity to the agreements expressed by electronic means (29.05.2000), and the Canadian Electronic Information and Documents Act, that aims to ensure that the same contractual principles that apply to off-line transactions will also be binding upon Internet transactions (16.05.2000) here.
The Indian Information Technology Act (17.10.00) is published on the web.
Malaysia’s Digital Signature Bill (1997), which is an Act to make provision for, and to regulate the use of, digital signatures and to provide for matters connected therewith can be seen here.
The Comité Maritime International (CMI), a non-governmental organization working towards contributing to
unification of maritime law, adopted the Rules for Electronic Bills of Landing (1990) in order to replace the traditional negotiable paper bill of landing with an electronic equivalent.
Encryption technology
The transmission of financial data in electronic commerce requires that such data be encrypted (scrambled) so that only
the intended recipient can understand the contents. Can technology used to scramble and unscramble data be legally imported and exported in your country? Does the government require that private keys (or methods used to generate them) for encryption be stored by a government agency? Is there a limitation on the encryption key size authorized for civilian use? If yes, what is the limit for symmetric and asymmetric encryption algorithms? Is your country a signatory of any agreements on the use encryption items for civilian (mostly commercial use)? What is the general position of the government regarding the use of encryption technologies?
The ILPFhas prepared a document on the International Consensus Principles for Electronic Authentication (23.04.99) that can be viewed at their website.
A survey conducted by the Electronic Privacy Information Center (EPIC) on the encryption policies of 100 countries could serve as a guide for understanding the issues related to
national encryption policies.
The OECD Cryptography Policy Guidelines and the Report on Background and issues of Cryptography Policy (March 1997).
Consumer Protection
Indicate if there are any local laws in your country to protect the rights of consumers in both traditional commerce and
distance selling systems. In some countries, the existing laws to protect consumers are applicable in electronic commerce.
A Report concerning policies and strategies on consumers protection issues in the Global Electronic Marketplace drafted
by the U.S. Bureau of Consumers Protection, Federal Trade Commission (FTC) (September 2000) can be found here.
See also the Recommendation of the OECD Council Concerning Guidelines for Consumer Protection in the Context of Electronic Commerce
Taxation and duties:
Indicate the position of your government and the legal framework regarding the -border goods or services sold vial electronic commerce transactions. Are there any additional taxes imposed on goods or services transacted via electronic commerce? Will the current tax regulations (VAT and corporate income tax) apply to electronic commerce transactions?
In June 2000 President Clinton made the "Internet Tax Freedom Act" and the U.S. House Judiciary
Committee approved legislation to extend the current moratorium on Internet taxes for an additional five years. More information on this and other countries taxation system can be obtained at KPMG consulting web site.
Tax issues, Legislation, and Regulations from all
over the world can be founded at Baker & Mc Kenzie’s web site
The Bureau of Internal Revenue (BIR) of Philippines has proposed a law (January 2001), which will allow transactions over the Internet to be taxed if one or both of the parties are based in the Philippines. Click here.
The government of China is drafting rules on Internet Taxes, which are aimed at preventing tax evasion as e-commerce, and online trading activities increase (12.06.2000) can be consulted at the following link http://www.chinaonline.com/topstories/000607/1/c00060753.asp
The OECD Progresses towards Achieving an International Consensus on the Tax Treatment of E-commerce (12.02.01). Click here.
Jurisdiction
See the Canadian Law on Jurisdiction in Cyberspace that is a project on the law relating to jurisdiction (April 1999) here.
Applicable Law
A paper on "The Internet—Jurisdiction and Applicable Law" can be reed at the WIPO’s web site
Regarding these two items, the ITU does not provide a forum for resolving disputes between business partners as a result of using electronic commerce services and does not define or propose national laws or legal advice on electronic commerce.
Liability of Intermediaries
What is the liability of the providers of information society services (ISC) when they act as intermediaries when they transmit or host third party information (information provided by the users of the service)? Does your country have adopted any Act,
Regulation, or Law that states the ISC provider’s liability?
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