Latest rules on electronic transactions designed to help businesses save costs

Singapore

THE Electronic Transactions (Amendment) Bill, which was passed in Parliament yesterday will help businesses significantly reduce costs but it is ultimately up to businesses to choose if they adopt the use of electronic transferable records (ETRs) said Minister for Communications and Information S Iswaran at the closing speech of his second reading of the bill.

Mr Iswaran, who is also Minister-in-charge of Trade Relations, was addressing concerns raised by Members of Parliament (MPs) on Monday which were mostly focused around how to ensure businesses, in particular small and medium-sized enterprises (SMEs), can digitalise in a sustainable and effective manner.

Asked what help is being extended to businesses as they make the transition, Mr Iswaran noted that the Infocomm Media Development Authority (IMDA) works with trade associations and chambers to reach out to SMEs through industry events and webinars, and that IMDA's SME Digital Tech Hub provides specialist digital technology advisory to SMEs that have advanced digital needs such as data analytics and cybersecurity.

He added that SMEs stand to benefit from TradeTrust, the digital global trade platform that uses blockchain technology to digitalise international commerce, given that the software is distributed for free under open source licence.

"This is a good starting point for tech firms in the business of providing products or services around ETRs while enabling them to be interoperable without additional costs."

But, he stressed that "ultimately, individual businesses must weigh the costs and benefits for themselves".

Research by container shipping giant Maersk and tech firm IBM in 2014 showed the cost of processing trade documents made up as much as 20 per cent of the cost of moving goods.

But beyond replacing paper documents with ETRs, businesses that wish to unlock the full potential of digital solutions will have to invest resources into reviewing their existing operations in IT, digital infrastructure and systems, and their business processes, he said.

In response to a question raised by MP Louis Ng on how the amendments ensure that Singapore continues to be interoperable within the global trade ecosystem especially since many countries have yet to adopt the use of ETRs widely, Mr Iswaran said that the new amendments not only require both parties to consent to the use of the ETR, but also enable the change of medium from an ETR to a physical transferable document or instrument and vice versa.

"This enables parties to decide to use an ETR with the assurance that the ETR can be converted to a physical transferable document or instrument at some later stage in the life cycle," said Mr Iswaran.

He also noted that Singapore has been actively promoting the adoption of the Model Law on Electronic Transferable Records (2017) (MLETR) citing the examples of the two digital economy agreements signed with Australia, and Chile and New Zealand respectively.

Tackling the question raised by various MPs on future plans to digitalise other transactions, Mr Iswaran said: "We do not have a specific estimated time of arrival for the Electronic Transactions Act exclusion list to be reduced or removed completely, but as a general move as part of the government's larger effort, we are seeking to remove as many of these exclusions as possible by 2023."

He cited the example of the Ministry of Social and Family Development's upcoming amendments to the Mental Capacity Act which will allow for the digitalisation of the Lasting Power of Attorney (LPA) which could reduce the time needed to register an LPA from an average of three weeks to eight working days. This excludes the three-week mandatory waiting period during which a person can withdraw his application, and the person appointed to act on his behalf can raise objections.

Tackling the question of whether deeds can be signed electronically, Mr Iswaran said it is necessary to consider whether the safeguards that have developed over time are still needed "if in fact we want to migrate these deeds to the electronic domain". He added that this is an area of law that the Ministry of Law and other relevant ministries are studying.