On 23 June 2023, the National Assembly passed the Law on E-Transactions (amended) ("New ET Law") No. 20/2023/QH15, replacing the current Law on E-Transactions No. 51/2005/QH11 ("ET Law 2005"). The New ET Law includes seven chapters and 54 articles addressing various issues that will directly impact on both onshore and offshore businesses that transact with consumers in Vietnam. The New ET Law came into force on 1 July 2024 and superseded the ET Law 2005.
On 17 July 2023, the Office of the President of Vietnam held a press conference on the official issuance of the New ET Law. At the press conference, deputy minister of the Ministry of Information and Communications (MIC) stressed that the new law aims to fully institutionalize the politburo's viewpoints and policies and overcome existing problems and inadequacies of the ET Law 2005. The New ET Law amended and supplemented 33 articles while adding regulations to 18 articles of the ET Law 2005.
Below we highlight the notable provisions that may have significant implications for your business.
1. Scope of application is extended
While the ET Law 2005 explicitly excluded certain types of certificates, such as certificates of land use rights, bills of exchanges or other valuable papers, from its scope of application, the New ET Law has broadened its reach to all facets of life and business without exceptions. The New ET Law only focuses on using electronic means in transactions whose substances, conditions and forms will be governed by other specific laws.
2. General provisions on e-signatures are more specific but have not changed significantly in terms of principles
The New ET Law only introduces a few changes compared to the ET Law 2005. We note that this new law keeps the old definition of "digital signature" — a form of e-signature — which is limited only to signatures generated using asymmetric key encryption. The most significant change is that the new law now classifies e-signatures based on their purposes of use, i.e., into "specialized e-signature" (used by a specific organization for its specialized activities), "public digital signature" (used for public activities and guaranteed by public certificates) and "specialized digital signature for official use" (state digital signature). The reason behind this classification is that, apart from the general requirements, each type of e-signature will be subject to a specific set of requirements to ensure its authenticity and reliability.
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, or text messages, seem unlikely to qualify as e-signatures. In such cases, the New ET law paves the way for other relevant laws to set the legal framework for these confirmation means.
In addition, the new law also amended, supplemented or introduced new definitions for key terms such as “trust service,” "timestamp," "e-contract," "digital data," "master data," "e-environment," "e-certificate" and "digital signature certification service."
3. The recognition of foreign e-signatures and foreign e-signature certificates is subject to new requirements
Foreign e-signatures and foreign e-signature certificates will be recognized if they are provided by a foreign e-signature certification service provider (among other requirements). Such service providers, in order to be recognized, must themselves meet multiple other criteria, including having a representative office in Vietnam.
At this stage, it is still unclear whether this recognition is still in the form of a license, as under the ET Law 2005. The MIC will regulate the recognition procedure.
4. Important aspects of e-contracts are subject to agreement
The execution and performance of e-contracts must still comply with the ET Law 2005 (among others, such as contract laws). However, the contracting parties can agree on the technical requirements, verification and conditions to ensure the integrity and confidentiality related to such e-contracts. Thus, while specific industries may be subject to additional legal requirements for their e-contracts, the New ET Law will be unlikely to restrict e-contract execution and performance. Under the New ET Law, the MIC is tasked with being the state management authority regarding e-contract certifying.
5. Regulations of digital platforms and information system administrator
The New ET Law provides three new definitions:
- Information system serving e-transaction: information system with the main function being to serve an e-transaction
- Digital platform serving e-transaction: information system serving an e-transaction that creates an environment to conduct e-transactions
- Intermediary digital platform serving e-transaction: digital platform serving an e-transaction in which the platform administrator is independent of those participating in the transactions
Further, the New ET Law also assigns specific responsibilities to the administrators of information system serving an e-transaction, large-scale intermediary digital platform serving an e-transaction and extremely large-scale intermediary digital platform serving an e-transaction. These include providing information (in accordance with the laws) via electronic means with competent agencies to service for state management purpose. Notably, the New ET Law requires the extremely large-scale intermediary digital platform to: (i) publish parameters/criteria of the recommender system used for displaying suggested content, advertising to users; and (ii) allow users to uninstall any preinstalled applications without affecting the basic technical features and keeping the system working correctly.
The government will provide further guidance on those responsibilities of intermediary digital platforms in accordance with the number of users in Vietnam or the number of users' accesses in Vietnam.
6. E-transactions among state agencies
The New ET Law identifies several types of e-transactions for state agencies including: e-transactions within a governmental agency, e-transactions between different governmental agencies and e-transactions between state agencies and agencies, organizations and individuals. In addition, The New ET Law provides notable principles regarding data connection, data sharing, public open data to which state agencies must adhere, e.g., open data will be widely publicized by competent state agencies for agencies, organizations and individuals to freely use, reuse and share.
Though the New ET Law is set to come into force on 1 July 2024, this law merely provides general provisions that seem to lack enforceability. Hence, more specific government guidance is necessary for the effective compliance plan of businesses. The government expects to issue the New ET Law guiding/implementing decree by mid-next year./.