Singapore’s Electronic Transactions Laws: Digitalization of Legal Documents Proposed

Recent proposed changes to the Singapore Electronic Transactions Act would allow for the digitalization of cross-border trade documents and other important legal documents.

The Singapore Parliament introduced various amendments to the Electronic Transactions Act[1] (ETA) on 4 January 2021. The ETA aims to facilitate electronic transactions in Singapore and provides for the legal recognition and use of electronic signatures and records, thereby giving predictability and certainty to electronic transactions. The recent amendments to the ETA allow for the digitalization of cross-border trade documents such as bills of exchange, promissory notes and bills of lading to be legally recognized and aim to reduce the time and money required to process a huge amount of paperwork. The changes will take effect on a future date appointed by the relevant ministry.

As part of the government’s broader digitalization journey, the Ministry of Social and Family Development (MSF) has also proposed to digitalize the lasting power of attorney (LPA), which allows an appointed person to make medical and financial decisions on another’s behalf should the latter lose mental capacity.

Amendments Introduced to Electronics Transactions Act

Broad Adoption of Model Law

Several new provisions have been introduced to the ETA for the purpose of adopting the UNCITRAL Model Law on Electronic Transferable Records (Model Law). The Model Law aims to enable the legal use of electronic transferable records both domestically and across borders. It applies to electronic transferable records that are functionally equivalent to transferable documents or instruments.

Transferable documents or instruments are paper-based documents or instruments that entitle the holder to claim the performance of the obligation indicated therein and that allow the transfer of the claim to that performance by transferring possession of the document or instrument. Examples of transferable documents or instruments typically include bills of lading, bills of exchange, promissory notes, and warehouse receipts.

Digitalization of Cross-Border Documents Added to ETA’s Scope of Operation

Currently, most of maritime trade involves the use of physical bills of lading, which are legal and commercial documents providing evidence for the contract of carriage, receipt, and ownership of goods for a cargo shipment. With the intricacies of maritime trade, the paper trail typically runs up to hundreds of pages for a single transaction, which consumes a lot of time and money.

Following the amendments to the ETA, electronic versions of cross-border documents such as bills of exchange, bills of lading, and promissory notes will have legal effect.

Proposed Amendments to Mental Capacity Act: Digitalization of Lasting Power of Attorney

Parliament also seeks to digitalize the LPA with proposed amendments to the Mental Capacity Act.[2] Currently, only hard copies of LPAs are accepted.

The proposed amendments to the Mental Capacity Act will do the following:

• Allow LPAs to be made and registered electronically through a new system, the Office of the Public Guardian Online (OPGO) electronic system. LPAs made via OPGO will be an electronic deed. Singaporeans will no longer need to print and submit hardcopy documents or physically affix their wet-ink signatures and seals, which are steps currently required for hardcopy LPA deeds. With the new OPGO system, the time needed to register an LPA is expected to be reduced to an average of eight working days (in addition to the three-week mandatory waiting period). The time taken for LPA registration under the current manual process varies, and averages three weeks (in addition to the three-week mandatory waiting period).
• Allow deputies to file their deputy reports online through the OPGO. In addition to a step-by-step guide to assist deputies, OPGO will provide information for newly appointed deputies to better understand their roles and responsibilities.
• Allow an electronic copy of an LPA to be treated as the LPA. The Office of the Public Guardian (OPG) will keep an electronic copy of all new and existing LPAs in OPGO. Upon a donor losing mental capacity, donees may make a request to the OPG for an electronic copy of the LPA to be sent to any transacting third party (e.g., a bank). This will give third parties greater confidence in transacting with donees as they will directly receive the most up-to-date electronic copy of the LPA from the OPG. The proposed amendments will allow (1) all updates to an LPA to be made to the electronic copy in OPGO; and (2) for the electronic copy to prevail in the event of any inconsistency with a hardcopy version. If the amendments are passed in Parliament, existing donors and donees need not keep a physical copy of their hardcopy LPAs if they do not wish to.

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers, who are solicitors of Morgan Lewis Stamford LLC, a Singapore law corporation affiliated ‎with Morgan, Lewis & Bockius LLP:

Singapore
Wai Ming Yap

[1] Cap 88, 2011 Rev. Ed.

[2] Cap 177A, 2010 Rev. Ed.