Law to provide legal status of electronic transactions proposed

July 22, 1999

The Government aims to enact the Electronic Transactions Bill by the end of this year so as to provide a favourable environment for electronic commerce to flourish in Hong Kong as soon as possible.

Addressing a gathering of the Association of Engineers in Society this (Thursday) evening, the Secretary for Information Technology and Broadcasting, Mr K C Kwong, said the Bill sought to establish a clear legal framework to enhance certainty and security in the conduct of electronic transactions.

"When enacted, the Bill will provide legal recognition to electronic records and digital signatures in electronic transactions in the same way as the legal recognition given to their paper-based counterparts. It will also provide a framework to facilitate and promote the operation of certification authorities," Mr Kwong said.

To give legal recognition of electronic records and digital signatures, he continued, the Bill provides that -

* where a rule of law requires or permits information to be provided in writing or to be presented or retained in the original form, the legal requirement is met by presenting or retaining the information in the form of electronic records;

* where a rule of law requires a signature of a person, a digital signature will meet the legal requirement;

* contracts shall not be denied legal effect just because electronic records are used in their formation; and

* electronic records are admissible as evidence in court proceedings.

To provide a secure and trusted environment for the conduct of electronic transactions, the Government will take the lead and will, through the Hongkong Post, provide public certification services to individuals as well as businesses by the end of the year. Other bodies in the private sector may also establish certification authorities to serve the needs of the community.

Mr Kwong said the Government did not consider it appropriate to introduce a mandatory licensing system for certification authorities. Instead, a voluntary scheme whereby trustworthy certification authorities could apply to Government for recognition under the law would be set up to protect consumers' interest.

"With the use of public/private key encryption mechanism, digital signatures and the issue of digital certificates by certification authorities, we will be able to verify the identity of the counter parties to electronic transactions, ensure that the integrity and confidentiality of messages exchanged in the transactions would not be compromised, and safeguard against repudiation after transactions are made," he added.

Mr Kwong also told the gathering that the Government was developing a Chinese language interface based on the International Standards Organisation (ISO) 10646 standard.

This new international standard is intended to help all users of ideographic languages to overcome the difficulties in data conversion arising from different computer coding schemes for their characters, a problem of which users of Chinese software in Hong Kong should be acutely aware.

"We are actively working with our counterparts in both the Mainland of China and Taiwan, as well as other Asian countries and have submitted the updated set of Hong Kong supplementary characters to the ISO for consideration for inclusion in the extensions to the ISO 10646 standard," he said.

"We are also in close liaison with software vendors in the IT industry, some of whom are already supporting the ISO 10646 standard through the Unicode product platform, to further enhance their products so that when the extensions to ISO 10646 are progressively adopted by the ISO starting next year, there will be products in the market to support their implementation on an expanded Unicode platform."

Mr Kwong believed that the establishment of a common Chinese language interface and the promotion of a unitary coding system would facilitate the development of Chinese-language based software and content.

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