Stephen E. Blythe 1

Hong Kong is perhaps the “most wired” city in the world and has one of the best environments for e-commerce. Hong Kong's e-signature law is a major contributing factor to this environment. The Electronic Transactions Ordinance Act of 2000 (“ETO”) allowed the utilization of only one form of electronic signature-digital. This ran contrary to the trend in global electronic signature law; which encourages nations to give legal recognition to more than one. Accordingly, the ETO was amended in 2004 to allow for: (1) multiple forms of electronic signatures to be used in the private sector, with retention of the digital signature requirement for official electronic communiqués with the government; (2) electronic delivery whenever the law specifies that delivery is to be “by post or in person;” (3) bifurcation of the Annual Report of Compliance Assessment pertaining to certification authorities (“CA”), with one part to be performed by an independent auditor, and the other part to be achieved with submission of a sworn statement from the CA; and (4) a requirement that major changes in the CA's organization must be reported immediately to the government. Also in 2004, and pursuant to the ETO, the government issued the Code of Practice, a lengthy document meticulously specifying the standards and procedures for carrying out the functions of a CA. The Code of Practice includes detailed requirements for both the CA's Annual Report of Compliance Assessment, as well as the requirements for the contents of the CA's Certification Practice Statement. Both of these documents are required to be submitted to the government by the CA and play an important role in oversight of their activities. Therefore, while the amended ETO now recognizes the validity of more than one form of electronic signature, it is strengthening the degree of trustworthiness of digital signatures through more stringent regulation of CAs. However, consumer protections remain deficient; the author recommends that the ETO be amended again to rectify this oversight.

I. Made For Each Other: E-commerce and The World's “Most Wired” City

Hong Kong may be the “most wired” city in the world.2 With a state-of-the-art telecommunications infrastructure, Internet access is available to every business and household in Hong Kong.3 More than 90% of all households and business firms have broadband (DSL) connectivity;4 in early 2004, Hong Kong had about 1.5 million DSL subscribers, more than 35% of the total Internet subscriber base.5 More than 100 Internet Service Providers do business in Hong Kong, and ten of those are large and very-well-financed organizations.6 In survey results released by the International Telecommunications Union in 2003, Hong Kong finished in first place in Internet access affordability, with average Internet cost being only 0.19% of per-capita income.7

The government of Hong Kong aspires to make its city a global e-commerce leader.8 After the governor of Hong Kong declared that Information Technology (“IT”) was critical for business success, the number of students enrolled in IT-related programs doubled.9 The “Digital 21 Initiative” was launched in 1998, a “package of initiatives through which Government, business, industry and academia[10 ] can work together to make Hong Kong a 'leading digital city in a globally connected world.'”11 Digital 21 includes the following projects: (1) the creation of the “Cyberport” in 2002, the “Silicon Valley” of Hong Kong which contains office and residential space for more than 100 high-tech business firms and their employees;12 (2) the government's adoption of the multi-application “smart” identity card (using two thumbprints as the biometric identifier) for all Hong Kong citizens and residents-besides being used for “automated immigration clearance at border control points,”13 it can also store a digital certificate (with free digital signature service available at the Hong Kong Post Office for the first year of use)14 and can be used as a public library card;15 and (3) an emphasis on greater electronic delivery of public services (“e-government”)-by the end of 2003, most public services amenable to electronic delivery had become available online,16 with the most popular options being “payment of government bills, marriage appointment booking and submission of trade-related documents.”17

All of these thrusts are beginning to pay huge dividends. In April 2005, a worldwide survey sponsored by the Economist Intelligence Unit concluded that Hong Kong has the best e-commerce environment in Asia.18 In addition to its stellar infrastructure, Hong Kong's e-signature law is also state-of-the-art, providing a firm foundation for undertaking e-commerce transactions with confidence and assurance.19