Recently, the National Assembly’s law committee issued a draft of the new Electronic Transaction Law which is now undergoing comments from interested public parties. This is the first time that electronic transactions will warrant their own law as previous regulations on this subject matter have been limited to decrees of the government. This article will briefly overview the proposed elements of the new draft law.
First, the new draft law will apply to “agencies, organizations and individuals involved in or related to electronic transactions in Vietnam.” This is currently a broad application that can easily be interpreted to include both domestic and foreign actors and extend the sovereignty of Vietnam over electronic transactions considerably. I suspect that this will be revised and the application specified somewhat before the law reaches its final form.
As can be expected, electronic transactions are transactions conducted via electronic means. This is further enumerated as the scope expands to include automatic transactions (which contemplates smart contracts on the blockchain), mobile apps, and other forms of transactions that might currently be used to complete a transaction electronically. On the same note, there is an interesting concept included in the law about electronic signing programs. These are computer programs which are set up to automatically sign for a specific user digitally, and would suggest that the National Assembly is actually looking at NFTs in this law.
Data intermediaries are contemplated as well, or the idea that certain organizations may exist solely for the purpose of transferring data from one source to another. And electronic digital interchanges (EDIs) are also included as a means for implementing such data intermediary services.
The draft law seems to continue the previous methods for confirming an e-signature based on confirmation of a service that provides them such as a confirmed trusted source. It requires that data related to electronic transactions be able to be held integral from creation through the end of its validity, with exceptions for legitimate changes that are stored and displayed along with the original data.
The draft reiterates the fact that the results of electronic messages in the form of acceptable data messages have the same validity equal to text. Data messages include: electronic data exchange, electronic documents, e-mail, telegrams, telegraphs, faxes and other similar forms. There legal value is determined based on the reliability of the data message. Data messages are ranked with four levels of reliability depending on the method of formation, the confirmation of originator, etc. Ultimately, and most importantly, the law explicitly states that data messages may be used as evidence in court. This issue, despite seemingly obvious pronouncements in previous decrees, has flummoxed litigators in Vietnam for several years. It will be good for it to finally be resolved.
Documents that must be stored pursuant to legal requirement may now be stored as data messages so long as certain requirements are met for the accessibility and integrity of the data. Specifics of identifying the originator of a data message are set out: who can act as originator and what steps in the process of transmission do not alter that identity. Time and location of data messages are also specified. And obviously, who, when, and where data messages are received.
The law expresses the legitimacy of electronic certificates and diplomas so long as they meet minimum requirements of integrity and the certification of emails in which they are sent. Emails in general are treated, their use and certification. Electronic trading accounts are enumerated and provide for the use of recognized proof of transactions and payments. The creation, use, storage, and treatment of data related to such accounts are also covered. As are electronic signatures and related procedures including regulations governing electronic signature certifying service providers, including technical and other requirements for authentication and for licensing of such services.
For the first time, the law covers the signing and execution of electronic contracts. Electronic documents are contracts, proposals, notices, confirmations or other documents in the form of data messages issued by the parties in connection with the conclusion or performance of contracts. Electronic documents are treated as documents based on their level of reliability. And smart contracts on the blockchain are, indeed, included, allowing for automatic actions to be taken on the occurrence of a payment or other triggering act. The draft law sets out principles for creating and signing electronic contracts, and what must happen for them to be recognized as legally binding. The process of offer and acceptance so vital to the idea of contract is set forth in its order for contracts created via electronic means.
Digital credit rating services are outlined in form and substance. These are services to assess the safety and reliability of electronic trading systems and websites. What is required to operate such a service and how to license one is also explained. The setup and operation of electronic trading systems which are systems set up to serve electronic trading including e-commerce. Digital systems and services are set forth and these include all the digital and electronic infrastructure for e-commerce and services from the owner of digital platforms to data intermediaries, et al. There obligations and rights are listed. And individual requirements are enumerated for specific types of digital platforms from e-commerce to advertising to communications and e-banking to cloud computing and online operating systems.
Finally, the Ministry of Information and Communications (MOIC) will be responsible for implementing and monitoring the electronics transaction law.
(I apologize if this is somewhat scattered. This summary is based on a machine translated version of the draft law. Once the law is promulgated I’ll examine it in more detail for comparisons between the English and Vietnamese versions.)