China Passes E-Commerce Legislation, Cracks Down On Content

by Mary Swire, for LawAndTax-News.com, Hong Kong

01 September 2004

President Hu Jintao of China signed the Law on Electronic Signature on Saturday at the end of a Standing Committee meeting of the National People's Congress, meaning that electronic signatures will carry the same legal weight as seals and handwritten signatures in business transactions on the mainland from April.

E-commerce has been growing rapidly on the mainland, amounting to US$60 billion last year. The legislation establishes criminal penalties for people convicted of forging electronic signatures, falsely using another person's signature or stealing passwords containing e-signatures; infringements resulting in financial loss will be subject to civil law. Certification agencies must be approved by the government. There are said to be more than 4,000 mainland e-commerce websites and more than 70 online certification centres.

In Hong Kong, the Electronic Transactions Ordinance was passed in 2000, authorising the use of electronic and digital signatures, and electronic records. It provides for the legal validity of digital signatures and electronic records, as well as for the retention of electronic records and their admissibility in any legal proceeding. Additionally, the Ordinance delineated the requirements for the formation of an electronic contract, and established regulations for the licensing of certification authorities.

Meanwhile, the mainland government continues with its crack-down on 'inappropriate' web content, as Minister of Information Industry Wang Xudong recently announced the setting-up of an inter-departmental committee to launch a nationwide sweep against pornography and other inappropriate content on web portals and mobiles. Local regulators, operators and law enforcement bodies will work together to root out illegal content at web portals and wireless services providers, said Mr Wang.

Xi Guohua, the Vice-Minister of Information Industry, said last week that the regulator had recently ordered all six telecommunications operators, including China Mobile, Unicom and fixed-line carriers China Telecom and China Network Communications Corp, to closely monitor internet and mobile content providers and report violations to regulators.

Large numbers of mobile and wireless content providers have already been sanctioned or closed down, say the operators, who have taken the government's threats quite seriously.

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