Explore the Electronic Transactions Act (ETA) and its associated IMDA regulations, which provide a robust legal framework for electronic transactions in Singapore.
About the Electronic Transactions Act (ETA)
The Electronic Transactions Act (ETA) was first enacted in July 1998 to provide a legal foundation for electronic transactions, and to give predictability and certainty to contracts formed electronically. It does not mandate the use of electronic signatures or transactions and facilitates their use where parties choose to transact electronically. In March 2021, the ETA was amended to ensure that Singapore’s legal and regulatory infrastructure keeps pace with international trade law and the latest technological developments so that Singapore remains globally competitive.
Recognising the growing importance of electronic transactions, especially e-commerce, Singapore was the first country to adopt the Model Law on Electronic Commerce of 1996 (MLEC) by the United Nations Commission on International Trade Law, or UNCITRAL. In 2010, the ETA was repealed and re-enacted to adopt the United Nations Convention on the Use of Electronic Communications in International Contracts (ECC).
In 2021, the ETA was amended to adopt the UNCITRAL Model Law on Electronic Transferable Records (MLETR), which enables the creation and use of transferable documents or instruments such as electronic bills of lading (eBLs), which are key documents for international trade, including digital payment processes. Please see the infographic (171.64KB) for more information about the 2021 ETA amendments. The adoption of eBLs will result in faster processing, lowered fraud risks, cost savings, and will enable innovative business models. The Electronic Transactions (Amendment) Bill was introduced in Parliament on 4 January 2021, and passed on 1 February 2021. The amended Act came into force on 19 March 2021.
The ETA addresses the following issues:
- Commercial code for e-commerce transactions: The ETA supports the use of electronic signatures and almost all agreements used in typical business functions can be signed electronically, including sales, procurement & sourcing, human resources, and finance and accounts. In these instances, there is no real distinction made under the ETA between “wet-ink” signatures and electronic signatures.
- Use of electronic applications for public sector: In order to facilitate the use of electronic transactions in the public sector, the ETA contains an omnibus provision through which government departments and statutory boards can accept electronic filings and electronic versions of documents without having to amend their respective Acts. It also allows public bodies to issue permits and licences electronically.
- Liability of network service providers: Singapore recognises the importance of network service providers in providing information infrastructure and content. The government also realises that it is impractical for network service providers to check all the content for which they merely provide access. To create a transparent legal environment conducive to the growth of network service providers, the ETA specifies that network service providers will not be subject to criminal or civil liability for such third-party material, in relation to which they are merely the host. The clause, however, will not affect the obligations of a network service provider under any licensing or other regulatory regime established under the law.
- Provision for the development of security procedures such as Public Key Infrastructure (PKI): the ETA provides for the appointment of a Controller and regulations for the voluntary accreditation of certification authorities (CAs) providing PKI based electronic signatures.
What is an Electronic Signature?
An electronic signature, like a wet-ink signature, is a record of a person’s intention or consent, and can include:
- Pasting a digitised image of their manuscript signature
- Signing using a stylus or finger on a touch screen
- Ticking a check box or clicking ‘I accept’ on an online form
- Selecting an option in an electronic signature software
How to adopt e-signatures?
With the wide acceptance of e-signatures and policies in place to support it, businesses in Singapore are encouraged to digitalise by adopting e-signatures.
Examples of commercial electronic signature solutions# include:
- Adobe Sign
#The listing of companies should not be taken as a form of endorsement or recommendation by IMDA. Businesses should obtain their own professional and/or independent legal advice and conduct all necessary due diligence in respect of any decisions or actions they intend to take.
The information above is published as general guidance and should not be construed as legal advice.
The Evidence Act (Cap 97) was also amended in 1997 to allow the use of electronic records as evidence in the courts.
If you have further queries, feel free to drop us an email at email@example.com.