Knowledge Highlights 20 November 2024
Revised Vietnam Law on Electronic Transactions to come into effect 1 July 2024
On 22 June 2023, the Vietnam National Assembly passed into law the amended Law on Electronic Transactions (“New Law”). The New Law will come into effect on 1 July 2024 and supersedes the current Law on Electronic Transactions 2005 (“2005 Law”).
The 2005 Law came into effect on 1 March 2006 and is based on the Model Law on E-Commerce of the United Nations Commission on International Trade Law.
The scope of the New Law is wider than that of the 2005 Law and seeks to provide an updated legal framework for electronic transactions (“e-transactions”).
This article highlights some of the key points of the New Law.
Scope of New Law
Article 1 of the New Law provides for the conduct of transactions by electronic means but does not provide for the content, conditions and forms of transactions. Where other laws are silent on whether transactions can be carried out by electronic means, the provisions of the New Law will apply. Where other laws stipulate that certain transactions cannot be carried out by electronic means, those laws will prevail.
The scope of the New Law is wider than that of the 2005 Law which explicitly excludes certain areas including the issuance of land use right certificates, real estate ownership certificates, inheritance documents, marriage certificates, decisions on divorce, and birth/death certificates. The Ministry of Information and Communications (“MIC”) has previously explained that the scope has been widened to reflect advances in technology in all sectors since the inception of the 2005 Law.
The New Law specifies that the use of electronic means to conduct transactions is voluntary, unless otherwise provided for by law.
E-signatures
The New Law retains the 2005 Law definition of “digital signatures” as signatures generated by asymmetric key encryption only. What is new in the New Law is the classification of electronic signatures (“e-signature”) based on their purposes as follows:
- Specialised e-signature: E-signature to be established and used by a specific organisation for specialised activities;
- Specialised digital signature for public service use: Digital signature to be used in public service activities and guaranteed by a digital certificate specialised for public service; and
- Public digital signature: Digital signature to be used for public activities and guaranteed by public digital certificates.
In addition to generally applicable requirements, each classification of e-signature will be subject to separate specific conditions to ensure authenticity. Notably, under the New Law, common types of e-confirmation that present the consent of stakeholders, such as a scan or an image of wet signatures, one-time passwords (OTP), or text messages, seem unlikely to qualify as e-signatures. In such cases, the New Law paves the way for other relevant laws to set the legal framework.
The New Law recognises the legal validity of foreign e-signatures and foreign e-signature certificates, subject to compliance with specific requirements such as it being provided by a foreign e-signature certification service provider that meets stated criteria including having a representative office in Vietnam. The use and recognition of foreign e-signatures will help to reduce cross-border transactions expenses for businesses as well as promote international electronic transactions.
The New Law stipulates that data messages are used and have the same validity as the original if (i) the information in the data message is guaranteed to be intact since it was first initialised as a complete data message and (ii) the information in the data message is accessible and used in a complete form.
E-transactions
The New Law retains the key principles of the 2005 Law and sets out detailed provisions to facilitate e-transactions in all sectors. It also regulates information systems serving e-transactions, e-identification accounts, e-transaction accounts, responsibilities of information system owners, and responsibilities of state agencies in management of e-transactions.
Information system owners and administrators serving e-transactions are subdivided by scale which then attract varying compliance requirements.
A fully-fledged framework for e-transactions would assure their validity, which would hasten the move from the physical to the digital across all industries.
E-contracts
The execution and performance of e-contracts must still comply with the New Law (among others, such as contract laws). However, parties to e-contracts can agree on the technical requirements, verification, and conditions to ensure integrity and confidentiality. It should be noted that specific industries may be subject to additional legal requirements in relation to e-contracts. While MIC will be the State management authority regarding e-contract certification, other Ministers or Heads of Ministerial Agencies are responsible for promulgating regulations on conclusion and performance of e-contracts in the sectors within the scope of their Ministries.
Prohibited acts in e-transactions
The New Law also provides the following list of prohibited acts in relation to e-transactions:
- Abusing e-transactions to infringe upon national interests, ethnic interests, national security, social order and safety, public interests, legitimate rights and interests of agencies, organisations and individuals;
- Illegally obstructing or preventing the process of creating, sending, receiving, storing data messages or committing other acts aimed at sabotaging information systems serving electronic transactions;
- Illegally collecting, supplying, using, disclosing, displaying, distributing or trading in data messages;
- Forging, falsifying or illegally deleting, destroying, copying or moving part or all of a data message;
- Creating data messages for the purpose of committing illegal acts;
- Fraud, forgery, misappropriation or illegal use of e-transaction accounts, electronic certificates, electronic signature certificates and electronic signatures;
- Obstructing the selection of electronic transactions; and
- Other acts prohibited by law.
