Revamped Electronic Transactions Act to boost FDI

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By 2017-03-17

By Nishel Fernando

Amendments to the Electronic Transaction Act 2006 later this month will boost Foreign Direct Investments (FDI) to the country, according to a senior official of the Information and Communication Technology Agency (ICTA).
ICTA Programme Director and Legal Advisor Jayantha Fernando made these remarks while addressing a Consumer Rights Day Forum on Wednesday.

He said that, following the ratification of the UN Electronic Communications Convention (ECC) in 2015, the government plans to bring necessary amendments to the Electronic Transaction Act in late March, which will boost FDI.

He added that ICTA has already made recommendations as to the necessary revisions and modifications to the government and that the government plans to present the proposed amendments to Parliament later this month.

"These revisions and modifications would also provide the legal basis for the Singapore-Sri Lanka Free Trade Agreement (FTA) in terms of E-commerce, and help Sri Lanka attract more FDI efficiently."

Explaining the significance of UN Electronic Communications Convention 2015, which the upcoming amendments are based on, Fernando said, the proposed amendments would provide greater legal validity for e-Commerce and e-Business providers who wish to use Sri Lankan law as the applicable law, and ensure international validity of such e-Contracts.

Further adding he said the amendments would ensure the legal validity for other international legal instruments as well as cross border funds transfers, enhancing the ability of Sri Lanka to fast track its move towards paperless trade facilitation.
Fernando pointed that the Sri Lankan e-commerce industry has immense potential to grow by attracting FDI as Sri Lanka has the highest internet penetration in the South Asian region.

The annual consumer sales in Sri Lanka were valued at Rs 300 billion in 2015, while online sales constituted a mere one per cent of it.

According to the Central Bank report, IT related economic activities experienced a growth of 21 per cent in 2015. A survey carried out by Takas, a leading local e-commerce firm found that while the overall retail market in Sri Lanka is forecasted to expand by 5 per cent annually until 2020, E-Commerce would rapidly expand by 71 per cent to reach $4 billion by 2020.

Early this year, Chinese e-Commerce company Alibaba showed interest in investing in Sri Lanka and building an e-Commerce platform to further promote its e-commerce business ventures.

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