Proposed Legal Framework for e-Commerce
Police Call for Tighter Laws
Compensation for Computer Pains

New International Arrangements

Proposed Legal Framework for e-Commerce

On July 14 1999 the Electronic Transactions Bill was introduced into the Legislative Council. The bill seeks to provide a clear legal framework to promote the wide adoption of electronic transactions in Hong Kong. To this end, the government proposes to give most electronic records and digital signatures used in electronic transactions the same legal status as that of their paper-based counterparts. The government further proposes to establish a framework to promote and facilitate the operation of certification authorities (CAs).

According to the bill, certain types of transactions should continue to be conducted by conventional means. As a result:

  • certain generic items such as wills, trusts, statutory declarations, affidavits, powers of attorney, court orders, warrants, bills of exchange, and documents or instruments concerning land or property transactions are exempted;

  • a mechanism is provided to exempt by means of subsidiary legislation specific rules of law;

  • judicial proceedings are exempted and the authorities who make court rules are empowered to apply the relevant provisions of the bill to such proceedings when the relevant courts/tribunals are ready; and

  • a mechanism is provided to specify format and procedural requirements if necessary in respect of cases whereby electronic information is accepted under a rule of law.

To address public concerns about the security and certainty of electronic transactions, the government has spearheaded the establishment of a public key infrastructure in Hong Kong, supported by certification authorities. Taking a lead in this direction, Hongkong Post will start to provide public certification services on a non-exclusive basis by the end of this year. Apart from Hongkong Post, the private sector is also free to set up CAs in Hong Kong.

To protect consumer interests, the government will introduce a voluntary system of recognition, whereby trustworthy CAs may apply for recognition from the director of Information Technology Services. To encourage CAs to seek government recognition, it is proposed that legal recognition of digital signatures will apply only to those digital signatures supported by certificates issued by recognized CAs. In addition, it is further proposed that recognized CAs will be allowed to limit their liability when they have complied with all the requirements of the legislation and have not acted negligently.

However, the proposed legislation is only the first step in this legal minefield. The rush towards electronic commerce throws up other formidable legal challenges for business. The following are just some of the issues that will need to be addressed:

  • How many countries will you do business with?

  • Is your online contract valid in all those countries?

  • Is your promotional material legal in all of them?

  • Do you need to take legal advice in all destination countries?

Police Call for Tighter Laws

According to the Commercial Crimes Bureau, computer-related offences have increased significantly - from 25 reported incidents in 1997 to 89 in the first five months of 1999. Online publication of obscene material and computer hacking form the majority of offences. It is thought that the number of actual offences committed is significantly higher, but companies are reluctant to report incidents fearing damage to their corporate image and subsequent loss of business.

The Hong Kong police are calling for heavier fines for criminal convictions together with a review of current legislation to tackle cross-border jurisdictional issues.

Under the Crimes Ordinance, it is an offence to misuse a computer by, for example, altering, adding or erasing programs and/or data. However, the Crimes Ordinance does not cover the mere act of copying and using data contained on files. While this may be a criminal offence under the Theft Ordinance (eg, to the extent this constitutes dishonest use of telephone lines) and may also constitute a civil offence (eg, breach of copyright), other criminal sanctions against individuals are limited.

Compensation for Computer Pains

The Labour Department is considering proposing Occupational Safety and Health (Display Screen Equipment) Regulations later in the year. The regulations would allow employees to claim compensation for damaged eyesight and other health problems arising from the use of computers. The legislation is aimed at protecting employees' working environments and practices. A study conducted in 1997 found that 74% of computer operators interviewed suffered from eye discomfort, while a significant number of others suffered neck, shoulder and back pains. Employers are advised to keep a watchful eye on the progress of this proposed legislation and ensure that their systems, office environment and procedures are of the appropriate standard.

New International Arrangements

On June 22 1999 Hong Kong and the United Kingdom signed a memorandum of understanding (MOU) with the objectives of fostering and promoting cooperation in information technology, information services and telecommunications. The MOU envisages cooperation through commercial and industrial exchanges, investment and technology partnerships, and educational and learning exchanges, as well as through the sharing of policy and regulatory information. Hong Kong has signed two other MOUs on information technology - with Canada and Australia.

The memorandum signed with the United Kingdom followed an earlier MOU signed with the Mainland on June 19 for reciprocal enforcement of arbitral awards. While this MOU will have general application, undoubtedly it will be used to enforce awards relating to infringement of rights relating to information technology

For further information on these topics contact Vivian Crook at Bird & Bird by telephone (+852 2248 6000) or by fax (+852 2248 6011) or by e-mail ([email protected]).

The materials contained on this web site are for general information purposes only and are subject to the disclaimer