LC: Second Reading of Electronic Transactions (Amendment) Bill 2003

Following is a speech by the Secretary for Commerce, Industry and Technology, Mr Henry Tang, in moving the Second Reading of the Electronic Transactions (Amendment) Bill 2003 (in PDF) in the Legislative Council today (June 25):

Madam President,

I move the Second Reading of the Electronic Transactions (Amendment) Bill 2003.

The purpose of the Bill is to update and improve the Electronic Transactions Ordinance in order to facilitate the use of electronic transactions.

The Ordinance, enacted in January 2000, provides a clear legal framework for the conduct of e-business. It accords electronic records and digital signatures the same legal recognition as that of their paper-based counterparts. A voluntary recognition scheme for certification authorities has also been set up under the Ordinance to enhance public confidence in the use of digital signature in electronic transactions.

We have committed to the Legislative Council to review the Ordinance 18 months after its enactment to ensure that Hong Kong has the most up-to-date legislative framework for e-business. Accordingly, we started an internal review in 2001 and, in the light of operating experience, international e-business development and technological advancement, drew up a set of preliminary proposals for public consultation in early 2002. After careful consideration of the public comments received, we have formulated a set of proposed amendments to the Ordinance to improve and update it, as contained in the Bill. I would now like to briefly highlight the major proposed amendments.

First, to facilitate electronic transactions, we propose to adopt a technology-neutral approach in the use of electronic signature for satisfying signature requirement under law. Such an accommodating approach will enable the legislative framework and future development of e-business within it to better keep pace with technological advancement. We propose to amend the Ordinance such that, except for transactions involving Government entities, a signature requirement under law can be met by any form of electronic signature if it is reliable and appropriate for the purpose and agreed by the parties concerned. As for transactions involving Government entities, we propose to maintain the status quo that only digital signature is accepted for practical reasons and for the sake of clarity and certainty to citizens and businesses. In the case of contract formation, we propose to clarify that, if the contract contains a signature, the contracting parties may use electronic signature.

Second, we seek to remove unnecessary legal impediments to electronic transactions and E-government created by some legal provisions that contain references to or requirements of serving documents on the parties concerned by post or in person. These legal provisions were enacted at the time when electronic transactions were not prevalent, and there are now no justifications to exclude the electronic means for serving the documents. We therefore propose to accept the service of these documents by electronic means in specified cases. The list of specified cases will be expanded over time through an ongoing process.

A third major amendment aims to streamline the operation of the voluntary recognition scheme for certification authorities under the Ordinance. At present, a certification authority has to engage an independent and qualified assessor to prepare an assessment report on its compliance with the Ordinance. We propose to simplify this procedure so that the requirement to engage an independent assessor will only apply to the assessment of a certification authority's operation relating to trustworthiness, while other operational aspects can be dealt with by a statutory declaration made by a responsible officer of the certification authority. We also propose to enhance the voluntary recognition scheme by empowering the Director of Information Technology Services to require a recognised certification authority to furnish an assessment report or a statutory declaration, or both, as appropriate, when there are major changes to its operation that could have a bearing on its suitability for continued recognition.

We believe that the proposed amendments in the Bill will facilitate the adoption of electronic transactions and help promote the wider use of e-business in the community.

Madam President, I commend the Bill to Honourable Members.

Wednesday, June 25, 2003

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