Starting on 1 July 2024, a new set of E-Transaction (“ET Law”) provisions will go into effect, resulting in significant changes to the digital landscape. These provisions address various aspects of electronic transactions, with the goal of improving security, simplifying processes, and fostering trust in online interactions. As digital transactions become more prevalent and people increasingly rely on electronic platforms, these provisions implement comprehensive measures to safeguard user data, ensure legal validity, and promote seamless online experiences. By embracing these new regulations, businesses and individuals can navigate the digital realm with greater confidence and efficiency, ushering in a new era of electronic transactions.
In brief
On 23 June 2023, the National Assembly passed the Law on E-Transactions (amended) (“New ET Law”), which replaced the current Law on E-Transactions No. 51/2005/QH11 (“ET Law 2005”). The New ET Law includes seven chapters and 54 articles that address various issues that will directly impact both onshore and offshore businesses that transact with consumers in Vietnam. The New ET Law came into force on 1 July 2024 and superseded the ET Law 2005.
Here are the highlight of some notable provisions that may have significant implications for the business.
Scope of application is extended
The ET Law 2005 explicitly excluded certain types of certificates, such as land use rights certificates and bills of exchange, from its scope of application. However, the New ET Law has broadened its reach to cover all aspects of life and business without exceptions. The focus of the New ET Law is solely on the use of electronic means in transactions, while other specific laws will govern their substance, conditions, and forms.
The principles of general provisions on e-signatures have remained relatively unchanged, although they have become more specific.
The ET Law 2005 only introduces a few changes compared to the New ET Law. So we observe that the old definition of “digital signature,” which is limited to signatures generated using asymmetric key encryption, remains unchanged in this new law. The most significant change is the classification of e-signatures based on their purposes of use: “specialized e-signature,” “public digital signature,” and “specialized digital signature for official use” (state digital signature). This classification aims to ensure the authenticity and reliability of each type of e-signature by imposing specific requirements in addition to the general ones.
It is worth noting that under the new law, common types of e-confirmation, such as scanned or imaged wet signatures, one-time passwords, or text messages, may not meet the qualifications for e-signatures. In such instances, the New ET Law opens the door for other relevant laws to establish the legal framework for these confirmation methods.
Furthermore, the new law has amended, supplemented, or introduced new definitions for key terms like “trust service,” “timestamp,” “e-contract,” “digital data,” “master data,” “e-environment,” “e-certificate,” and “digital signature certification service.”
New requirements are now in place regarding the recognition of foreign e-signatures and foreign e-signature certificates.
Recognition of foreign e-signatures and certificates will be granted if they are obtained from a foreign e-signature certification service provider that fulfills certain requirements, including of the presence of a representative office in Vietnam. The specific form of recognition, such as whether it will be in the form of a license as per the ET Law 2005, is yet to be determined. The recognition procedure will be regulated by the MIC.
Rules governing digital platforms and administrators of information systems.
The New ET Law introduces three new definitions:
+ Information system serving e-transaction:
An information system primarily designed to facilitate electronic transactions.
+ Digital platform serving e-transaction:
An information system enabling e-transactions and creating an environment for conducting them.
+ Intermediary digital platform serving e-transaction:
A digital platform facilitating e-transactions, where the platform administrator is independent of the transaction participants.
Additionally, the New ET Law imposes specific obligations on the administrators of information systems serving e-transactions, large-scale intermediary digital platforms serving e-transactions, and extremely large-scale intermediary digital platforms serving e-transactions. These obligations include providing information, as required by law, to competent agencies through electronic means for the purpose of state management.
Notably, the New ET Law mandates that extremely large-scale intermediary digital platforms must:
(i) disclose the parameters/criteria of their recommender system used to display suggested content and advertising to users, and
(ii) enable users to uninstall preinstalled applications without affecting the basic technical features and functionality of the system.
The government will provide further guidelines on the responsibilities of intermediary digital platforms based on the number of users in Vietnam or the number of users’ access in Vietnam.
Conclusion
In conclusion, the implementation of the new E-Transactions provisions starting from 1 July 2024 marks a significant milestone in the digital landscape. Hence, more specific government guidance is necessary for the effective compliance plan of businesses. Moreover, the government expects to issue the new ET Law guiding/implementing decree by mid-next year. These notable provisions bring about enhanced security measures, streamlined processes, and increased convenience for individuals and businesses engaging in electronic transactions. As technology continues to evolve, these provisions pave the way for a more efficient and secure digital future, fostering trust and facilitating seamless interactions in the online realm.
HMLF is always available to offer assistance in understanding the procedures with authorities.
Harley Miller Law Firm “HMLF”
Head office: 14th floor, HM Town building, 412 Nguyen Thi Minh Khai, Ward 05, District 3, Ho Chi Minh City.
Phone number: +84 937215585
Website: hmlf.vn Email: miller@hmlf.vn
