New Electronic Transactions Bill: Major Changes for Digital Contracts, E-Signatures and Trust Services

New Electronic Transactions Bill: Major Changes for Digital Contracts, E-Signatures and Trust Services

A major overhaul of the legal framework for electronic transactions is underway. A new Electronic Transactions Bill has been submitted to the Cabinet with the objective of replacing the existing Electronic Transactions Act and modernizing the rules governing electronic documents, electronic signatures and seals, automated contracts, electronic transferable records, electronic stamp duty, and electronic transaction service providers.

The Bill is not yet law. If it completes the legislative process and is published in the Government Gazette, it is intended to take effect 180 days after publication. The existing Electronic Transactions Act and its amendments would then be repealed. The government has also indicated that 26 pieces of subordinate legislation are being prepared—two Royal Decrees, three Ministerial Regulations, and 21 notifications—to support implementation of the new regime.

Electronic transactions as the principal mode, without eliminating paper:

The Bill reflects a broader policy shift toward making electronic transactions a principal means of conducting transactions rather than treating electronic methods merely as alternatives to paper. This does not mean that paper transactions will become invalid or prohibited. Instead, the proposed framework strengthens the principle of functional equivalence between electronic and paper-based processes.

Electronic information and electronic printouts may therefore satisfy requirements traditionally associated with documents or evidence, subject to the applicable reliability requirements. An important practical consequence is that disputes concerning electronic evidence are likely to focus increasingly on the reliability of the process and system used to create, transmit, authenticate, and preserve the information, rather than simply on whether the information exists in electronic form.

Electronic signatures and electronic seals:

The Bill strengthens the framework for electronic signatures and expressly addresses electronic seals. Where a reliable electronic method is used, or a method specified by the Electronic Transactions Development Agency (ETDA) is followed, an electronic signature or seal may satisfy the corresponding legal requirement for a physical signature or seal.

The express recognition of electronic seals is particularly relevant to juristic persons and organizations that need to authenticate the origin and integrity of documents without requiring an individual to sign every document personally. In practice, businesses should review not only the technology used for electronic signing, but also authorization procedures, identity verification, audit trails, document integrity, and record retention.

Contracts formed by automated systems:

The Bill expressly addresses contracts formed through automated systems, an increasingly important issue for digital commerce.

A contract would not be denied legal effect merely because an automated system performed the relevant transaction without an individual reviewing or intervening in each step. The proposed framework recognizes legal effect where the system operates in a manner that the parties could reasonably expect from its normal operation. It also provides greater clarity concerning the sending, receipt, and acknowledgment of electronic information.

This provision has potentially broad application. It is relevant not only to conventional e-commerce platforms but also to automated procurement, payment systems, algorithmic transaction processing, and other business systems capable of initiating or completing transactions without contemporaneous human intervention.

For businesses, the important issue will therefore increasingly be who bears the legal consequences of the operation of an automated system, and whether the system’s operation falls within what the parties could reasonably have anticipated. Contract terms dealing with system errors, unauthorized transactions, allocation of risk, authentication, and system-generated records may consequently become more important.

Electronic transferable records:

Another major development is the introduction of a framework for electronic transferable records, including bills of exchange, promissory notes, and checks in electronic form.

The proposed regime allows such instruments to have legal effect equivalent to their paper counterparts, while translating concepts traditionally dependent on physical possession—such as possession, delivery, and endorsement—into an electronic environment. The framework therefore addresses control of an electronic record, identification of the person exercising control, transfer, endorsement, and alteration of information through reliable electronic methods.

This is potentially significant for banks, financial institutions, exporters and importers, logistics operators, and businesses involved in trade finance. The legal recognition of electronic transferable records could facilitate end-to-end digitalization of commercial and trade documentation that has historically remained dependent on original paper instruments.

Electronic stamp duty:

The Bill also expressly recognizes electronic stamp duty, with electronic stamping to be carried out in accordance with the criteria and procedures prescribed by the Revenue Department.

This is an important practical component of electronic contracting. Moving a contract to an electronic format does not by itself eliminate tax or stamp duty requirements. Businesses designing digital contracting workflows should therefore integrate execution, authentication, stamping, and record retention rather than treating these as separate processes.

Seven categories of electronic transaction service providers:

One of the most substantial regulatory changes is the introduction of a broader framework governing electronic transaction service providers. The Bill identifies seven categories:

1. identity proofing or authentication services;
2. electronic signature services;
3. electronic date and time-stamping services;
4. electronic information receipt, transmission, or storage services;
5. website or domain name registration or certification services;
6. electronic transferable record system services; and
7. other services prescribed by Ministerial Regulation.

The significance of this framework extends beyond classification. The Bill moves toward a risk-based regulatory approach, under which the duties and responsibilities imposed on service providers can reflect the risks associated with their services. Providers are expected to use reliable methods when creating, sending, receiving, storing, or processing electronic information and to maintain information capable of serving as evidence of transactions. Failure to comply with statutory duties may also result in liability for resulting damage.

The proposed framework therefore represents a broader conception of digital trust infrastructure. Electronic signatures, identity verification, timestamps, transmission and storage services, domain-related services, and electronic transferable record systems are treated as components of an ecosystem supporting reliable electronic transactions.

From licensing toward risk-based certification:

The Bill also changes the regulatory architecture applicable to service providers. Rather than relying exclusively on the existing licensing model, the proposed regime introduces certification mechanisms administered or recognized by ETDA, while allowing the level of regulatory intervention to correspond to the risks associated with particular services. The government’s description of the Bill indicates that certification may be obtained through ETDA or through certification bodies recognized under the statutory framework.

This distinction will be important once the subordinate legislation is available. Businesses currently providing—or procuring—electronic signature, identity, timestamp, electronic storage, or similar services should determine whether their activities fall within one of the seven categories and what certification or technical standards may ultimately apply.

Transitional arrangements:

The Bill contains transitional provisions intended to prevent disruption to existing regulated services.

In particular, providers of digital identity proofing and authentication services already licensed under the existing legal regime are intended to be treated as certified providers under the new legislation. This should facilitate continuity when the new regulatory framework replaces the existing regime.

Importantly, the existing Royal Decree governing digital platform services subject to notification requirements will continue to apply notwithstanding the replacement of the existing Electronic Transactions Act. It will remain in force until separate legislation governing digital platform service businesses becomes effective.

Digital platform operators should therefore not interpret the new Bill as terminating their existing obligations under the current digital platform regime.

Implementation will depend heavily on subordinate legislation:

Although the Bill establishes the overall statutory architecture, much of its practical effect will depend on subordinate legislation. The government has indicated that approximately 26 subordinate instruments are being prepared, comprising two Royal Decrees, three Ministerial Regulations, and 21 notifications.

This will be particularly important for determining what constitutes a reliable electronic method, the standards applicable to particular service providers, certification requirements, technical requirements for electronic transferable records, and the operation of the risk-based regulatory framework.

Accordingly, businesses should not wait only for enactment of the primary legislation. Organizations that rely heavily on digital transactions may wish to begin mapping their current electronic processes—including contracting, electronic signatures and seals, identity verification, automated systems, time-stamping, document transmission and storage, electronic evidence, and stamp duty—against the structure contemplated by the Bill.

Key takeaways:

• The Bill represents a fundamental modernization of the electronic transactions framework rather than a limited amendment to the existing legislation. Most notably, it moves beyond the basic legal recognition of electronic documents and signatures toward a broader infrastructure for digital trust and end-to-end electronic transactions.
• The proposed recognition of automated contracts and electronic transferable records could remove significant legal uncertainty from transactions that previously depended on human intervention or original paper instruments. At the same time, the seven-category framework for electronic transaction service providers introduces a substantially broader regulatory architecture based on the risk associated with the relevant service.
• The Bill is not yet in force. The existing Electronic Transactions Act and applicable subordinate legislation therefore continue to govern electronic transactions. If the Bill completes the legislative process in its present form, it is intended to become effective 180 days after publication in the Government Gazette.
• Businesses should monitor both the progress of the Bill and, importantly, the 26 subordinate instruments being prepared. For many businesses and technology providers, those instruments may ultimately be as important as the Act itself in determining the technical, certification, and compliance requirements applicable to electronic transactions.

Author: Panisa Suwanmatajarn, Managing Partner.

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