China's top legislature on Saturday passed the Law on Electronic
Signature to boost electronic business, which for the first time
legalizes increasing electronic deals.
The law was approved after three deliberations by the Standing
Committee of the 10th National People's Congress (NPC).
The law grants electronic signatures the same legal effect as
handwritten signatures and seals in business transactions, and set
up the market access system for online certification providers to
ensure the security of e-commerce.
According to the law, the contracts signed via the Internet have
the same legal authority with the paper ones, which is expected to
clear some institutional barriers among the current e-commerce
across the country.
A legal electronic signature should identify the signer and
confirm file content. As Internet trade requires a reliable third
party to identify the signers, the credibility of online certifying
organizations is significant for the transaction security.
"Considering the weakness of China's social credibility system,
the law regulates that the online signatures certification
providers should be approved and administered by governments," said
Cao Kangtai, director of the Legislative Affairs Office of the
State Council, in his report to the top legislature.
The law stipulates that the providers of online signature
certification should be approved and supervised by governments
while both of them should be responsible for their faults. It also
details the responsibilities of supervision departments and
certification providers.
Besides the punishment to the departments and companies making
mistakes, the officials and managers who are found faults also
should be punished, according to the law.
The law also grants the legal effect to the electronic contracts
with public utility, which were once excluded by the former draft.
The only exception is the unilateral electronic notice to the
public canceling service like water, electricity, gas.
The State Council started the lawmaking process in April last
year, pooling experience from experts and legislation from
developed nations.
Statistics show that China has some 4,000 websites dealing with
e-commerce and over 70 online certifying centers. China's Internet
Data Center (IDC) estimates that domestic revenue from e-commerce
amounted to US$60 billion in 2003.
(Xinhua News Agency August 29, 2004)