The Electronic Signatures Law: China's First National E-Commerce Legislation

By Wendy Yan, Faegre & Benson, Shanghai

In the wake of the increased use of new electronic and information technologies in commerce, adoption of a modern legal framework to regulate electronic commerce is particularly important for China's economic reforms. The enforceability and security of electronic transactions and records, and specifically data messages, are the most fundamental issues to be addressed by China's e-commerce legislation. In this context, during the past few years China has made considerable progress towards the creation of a favourable legal environment to enable and facilitate the use of e-commerce by means of regulating data messages and electronic signatures. On August 28 2004, the National People's Congress passed the PRC Electronic Signatures Law (E-Signatures Law), and it becomes effective on April 1 2005.

Generally speaking, the E-Signatures Law deals with the following two key areas, which have seen the most activity and have generated the most legal work in e-commerce: (1) the enforceability and legal effect of data messages; and (2) electronic signatures and their verification.