5 May 2020
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The COVID-19 pandemic impacts all aspects of our daily lives. Government authorities around the world have imposed various measures to reduce physical contact among people, including travel bans and movement restrictions (i.e., stay-at-home orders). Nevertheless, business transactions can still be performed by electronic means, including electronic communication/transmission and execution by e-signature. Reflecting changing needs, Myanmar also allows electronic signature documents to be exhibited as evidence in its courts and recognizes the legal validity of electronic signatures inserted onto commercial documents. Still, questions remain about the validity of electronic signatures for important transactions.
Electronic Transactions Law 2004
Section 19 of the Electronic Transactions Law 2004 (“ETL”) specifies that documents to be signed under any existing law may be made by electronic record, electronic data message or electronic signature. Under the ETL, an electronic signature is defined as “any symbol or mark arranged personally or on his behalf by electronic technology or any other similar technologies to verify the authenticity of the source of the electronic record and the absence of amendment or substitution.”
Nevertheless, in our view, certain provisions of the ETL may have to be revisited and amended to enable increased usage of electronic signatures in Myanmar. For instance, inter alia, Section 16 of the ETL, requires the authentic signer of an electronic signature (defined as “Subscriber”) to obtain a “Certificate” from a “Certification Authority” (i.e., licensed service provider) who may refuse the Subscriber’s application at its discretion.
Note: Under the ETL, “Certificate” is defined as “the certificate issued to the Subscriber by the Certificate Authority as an electronic data message or other record identifying the relationship between the signer of an electronic signature and the electronic data message.“ “Certification Authority” is defined therein as “a person or an organization that has been granted a license by the Control Board under this law for services in respect of the electronic signature.”
It is also important to note that the ETL does not apply to documents as set forth in Section 5 of the ETL, which include wills, negotiable instruments, trusts, power of attorney, documents relating to title and instruments that are required to be registered under existing laws.
Amendment of Evidence Act 2015
Section 67A of the Evidence Act, as amended in 2015 (“EA”), specifies that an electronic record constitutes a valid signature for the purposes of evidence if the identity of the person and the person’s intention concerning the information in the document can be established. This is a great leap whereby electronic signatures are now recognized as evidence and are enforceable in Myanmar courts.
Conclusion
Investors doing business in Myanmar may sign off and transmit a document by electronic means during the COVID-19 pandemic. However, we recommend that necessary precautions be taken in commercial transactions to mitigate the risks. In particular, investors should be aware that the legal system in Myanmar is still in a state of flux and there may be complicated perfection requirements (depending on the nature of the documents) for ensuring enforceability from a Myanmar legal perspective.
Notes
Under the ETL, “Certificate” is defined as “the certificate issued to the Subscriber by the Certificate Authority as an electronic data message or other record identifying the relationship between the signer of an electronic signature and the electronic data message.“ Certification Authority” is defined therein as “a person or an organization that has been granted a license by the Control Board under this law for services in respect of the electronic signature.”
For further information, please contact:
Krishna Ramachandra, Partner, Duane Morris & Selvam
kramachandra@duanemorrisselvam.com
