Rami Olwan

All About CyberLaw, Copyright and Developing Countries

Critical review of the proposed Palestinan electronic commerce and signature laws

This research paper critically reviews two draft laws prepared by the Palestinian Legislative Council (PLC), namely the Electronic Transactions (E-Commerce) Law and the Electronic Authentications (E-Signatures) Law. It also provides recommendations to improve the draft laws and create a favorable legal environment to facilitate e-commerce in Palestine.

The paper first defines the various aspects of electronic commerce, highlighting its importance and advantages. It concludes that there are currently no true e-commerce activities in Palestine, despite the existence of several companies involved in the field. Reasons for this include the fact that the market is not apparently being developed to deal with such activities, that companies do not have the necessary international expertise and skilled staff, and that legal institutions in Palestine are undeveloped. In addition, the poor legal infrastructure, and current absence of any law that regulates e-commerce, discourages companies and customers from engaging in it.

The study explores and identifies the main reasons that induce countries like Palestine to create laws regulating e-commerce and electronic authentications. These include the protection of national security, the privacy of individuals, consumer protection, recognition of e-business transactions, and regulating Certification Authorities (CA) or Trusted Third Parties (TTP).

The study presents different methods of regulating electronic authentications and e-signatures, including government intervention, industry or self-regulation, and co-regulation. The author prefers the co-regulation model, already adopted in certain countries, under which the government drafts its e-commerce laws in discussion with the private sector. This cooperation between the public and the private sector result in laws being drafted in accordance with the needs of the Certification Authorities, which will result in increased certification services and thus increased e-commerce activities. The paper also explores different approaches to drafting such laws, including the digital signature (or prescriptive) approach, the minimalist, and the two-tier approach. The approach adopted in the Palestinian draft laws is the minimalist approach, where the provisions of the law do not specify a particular technology that may become outdated later on. This sensibly corresponds with the speed of technological innovations and the changing dynamics of e-commerce.

Model e-commerce and digital signature laws prepared by UNICITRAL (United Nations Commission on International Trade Law) were examined in this paper. It also gives an overview of e-commerce laws in the United States, the European Union and South Africa, as well as in the Arab countries including Tunisia, Jordan, the United Arab Emirates, Bahrain, Egypt, Kuwait and Lebanon. The researcher argues that most Arab countries have failed to establish a favorable legal environment for e-commerce due to the fact that they have not issued any regulations for the implementation of e-commerce laws, which results in making these laws ineffectual. Also, most Arab laws issued so far concentrate on electronic contracting, electronic signatures, and evidencing contracts in cyberspace, but they do not specifically deal with many of the other issues that need to be regulated as well. These include domain names and their conflict with trademarks, internet piracy and cyber-crimes, privacy, modernizing administrative laws to facilitate electronic exchange between government departments, allowing companies to use the internet and other technologies to communicate with shareholders to simplify the process of corporate governance, etc.

In addition to the legal issues, there are other prerequisites that must be met for e-commerce to develop successfully in any country, especially developing countries, including the following:
1. Advanced telecommunications infrastructure.
2. Advanced banking system that facilitates e-commerce and paying online (e-payments).
3. Advanced information technology that guarantees the security, integrity, and non- repudiation of information transmitted over the internet.

The study concludes with several recommendations for improving the legal e-commerce environment in Palestine and the proposed draft laws. Among the most important are the following:

1) Integrate the two draft laws into one single e-commerce law, since they deal with the same issues and the integration of the two would reduce the financial burdens on the PNA associated with implementing such laws.
2) Expand the law to cover other legal e-commerce issues that were not dealt with in the drafts.
3) Clear, specific and detailed e-commerce policies should be established by the PNA in order to improve and develop this sector.
4) A specialized e-commerce committee consisting of technical and legal experts should be created to be responsible for preparing further legal studies and reviews.

The full research paper is available here.

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