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Philippine Lawmakers To Pass E-Commerce Law

Senator Ramon Magsaysay Jr. last Friday talked about the proposed E-Commerce Law to members of the press and employees of various government agencies.

"This bill seeks to institutionalize e-commerce in the country," said Magsaysay.

International laws on e-commerce such the United Nations Commission on International Trade Law (UNCITRAL), the Organization of Economic Cooperation and Development (OECD), and the Singapore Electronic Transactions Act have been used as models in drafting the e-commerce law.

The Philippine business community is beginning to be aware of the benefits of e-commerce in trade. There are currently more than 300 companies implementing electronic data interchange (EDI) in the country in a very limited way.

Due to a lack of a clearly defined e-commerce policy, and the absence of an e-commerce legislation, Philippine businesses are now limited to activities involving only purchase orders and reporting forms.

Senate Bill No. 1523, the E-Commerce Law, will address legal issues to enable local businesses to maximize the capabilities of e-commerce.

With the passage of the bill into law, legal documents don't have to be in writing. The bill allows electronic documents to have legal effect, validity or enforceability as any other paper document.

Magsaysay added, "The bill will, therefore, allow electronic documents to be admissible as evidence in court and reduce, if not eliminate, the need for written or documentary evidence in cases heard in court. This is also considered as an environment friendly bill since it is also meant to save our trees and forest."

The bill likewise provides retention of electronic documents.

"The provision of law that certain documents be retained in their original form is satisfied by retaining them in the form of an electronic document. We will... minimize if not eliminate the accumulation of voluminous written records in government and in the private business sector," added Magsaysay.

Various banking and financial institutions in the country hope that this will lead to the full blown implementation of electronic payments.

To address the security needs of the industry , users of cryptography, subject to applicable and guidelines, shall be free to determine the type and level of electronic document security needed, and to select and use or implement appropriate cryptographic methods, including the key management system that suits their needs.

Additionally, the bill likewise provides government use of electronic documents and signatures as it require all agencies in government to adopt rules and guidelines in accepting, filing, retention of electronic documents; issue permits, licenses, approvals in the form of electronic documents; accept payments and issue receipts; transact government business or functions.

"A very good example is the Bureau of Customs (BOC)," said Magsaysay. "Althought the BOC has been engaging in business to business e-commerce, it still has to perform the actual paper transactions and undergo the normal procedure of signature paper flow. They also need to retain the actual documents as mandated by law."

In recognition of the potential hazard posed by hackers, the bill will declare hacking as a criminal offense and recommend penalties of not less than one hundred thousand pesos and mandatory imprisonment for a minimum of six months.

Third party providers including their current and ex officers, directors, and employees who commit forgery, alteration, infliction of damages, violation of secrecy, misuse, or other illegal use of electronic documents sent, received, stored, or compiled to penalized with a fine and a mandatory imprisonment.

The same penalties apply to government officials and employees who abuse their lawful access and violate the confidentiality of electronic documents and cryptographic keys.

As far as government authority within the E-Commerce Law, the Department of Trade and Industry shall direct and supervise the promotion and development of electronic commerce in the country in consultation and in coordination with the National Information Technology Council and National Computer Center.

"I am pleased to announce that the Philippine business community is supportive of the proposed E-Commerce Law and eagerly awaits its passage. Our investors realize the importance of an E-Commerce Law to enhance their business capabilities, efficiency, and competitiveness," said Magsaysay.

The E-Commerce Law is scheduled to be passed this year and, at the earliest, in June at the bicameral level.