Introduction

Since the subject matter of this report is fallen within the international trade scope,
it is important to mention about international trade.
International trade refers to cross border economic activities
involving the exchange of goods, services, technology, and
capital between independent countries, trading blocs, and
their trading persons, bodies and corporations.
1
nter nter
Internet is becoming the focal point for the global village of tomorrow. !herefore,
e"commerce tric#les in to international trade too. !hat is why Sri $an#a enacted
lectronic !ransactions %ct &o. 1' of ())*, which was turning point of Sri $an#an
I+!
(
industry. It is innovative piece of legislation.
!his report analy,es the Sri $an#an legal framewor# relating to e"commerce. -irst,
it describes application of "commerce in Sri $an#a during the past five years.
Secondly, it mentions law reforms needed to encourage future international trade.
What is e-commerce?
"commerce is the sale of goods and services over the internet that gives
opportunity to buy and sell things available all over the world. %ctually, it
coordinates the international trade via electronic medium. !his is good time for the
people who were limited to own country.
1
Islam, .rafi/ul . International !rade $aw of the 0!1, shec# wah tong printing press ltd, ())* .p1
2
Information +ommunication !echnology
1
!rad
e
2uyer
32uying4
Seller
3Selling4
Contract
2oth parties are getting
legal protection
5ay today life, business done at particular time. -or example, shops open at ' am
to ' pm and close due to holidays. &ot as usual life, through e commerce we can
access to goods and services at any time through out the year.
0hen people need goods and if they could fulfill them easy and cost effective
way, they tend to use it. !his is best method to increase business in developing
country li#e Sri $an#a. !o go parallel with the 0orld and to be competitive we
should lin# with the e"commerce.
!he Sri $an#a initiative uses information and communication technology to,
5evelop the economy of Sri $an#a
6educe poverty
Improve the /uality of life of the people
!o fulfill above objectives government have strategies li#e private sector
development, "society, I+! investment etc.
E-commerce in Sri Lanka during the past five years
History of electronic transactions act
!he drafting of electronic transactions legislation enabled through a joint cabinet
memorandum.
%s a follow"up to the enactment of the lectronic !ransactions %ct, Sri
$an#a became one of the first three countries in the %sian 6egion 3and first
country in South %sia4 to sign the 7nited &ations +onvention on the 7se of
lectronic +ommunications in International +ontracts 3commonly #nown as
the e"+ontracting convention4. !his was conse/uent to a +abinet decision
initiated by the .inistry of Science and !echnology.
8
+abinet of ministers decided that
legislation on electronic transactions
3
$aws and 9olicies, http:!!!"gov"lk!e#inde$"php?
option%com&content'vie!%article'id%()*'Itemid%*(+'lang%en
2
(( September
()):
); .arch ())*
should be prepared through the legal
drafter<s department in conjunction with
I+!%
9resented to the 9arliament.
2rought in to operation
:
!his act based on standards established by 7&+I!6%$ 1''* and model laws on
electronic signatures ())1.
,undamental provisions of the act
-
!his act has certified that e"commerce is a formal and legally accepted in Sri
$an#a. %ct,
-acilitate electronic commercial and financial activity by removing
barriers to e"transactions.
9reserving the rights of individuals to engage in freedom of contract
unimpeded by government regulation and bureaucracy
$egislation ensured that transactions conducted electronically are
regarded as of e/ual validity and legislating as normal paper
transactions.
9rovide framewor# of rules and regulations regarding online contract
formation
+an enhance the economic development.
5evelop commercial and free enterprise activity.
-lourish free mar#et economy in Sri $an#a.
4
=a,ette &o 1>1*?(> of (;
th
September ());
5
lectronic !ransactions %ct &o. 1' of ())*
3
)1 1ctober ());
.ct/s significance for the country/s emerging e-commerce activity
"commerce is important to protecting the global image of the country. Sri $an#an
S.
*
should use e"commerce to grow their industries. ven a small company can
tap the customers all over the world and reach across geographical boundaries
via e"commerce.
In ())', Sri $an#an e"commerce mar#et was very limited. @owever, Sri $an#a
had made strategies li#e e"laws to overcome this problem, passed the internet
penetration rate over 1)A first time in ()1(, and placed (:
th
in %sia. %ccording to
world fact boo#, internet users in Sri $an#a are 1.;;;;million in ()1(. +ountries
among the world, Sri $an#a ran#ed 18* place.
!here was an expectation that in 1ctober ()18 Sri $an#a will become a
global hub for excellence in e"content
;
0ith the increase of phone usage, internet access increased. Increase of the
credit card and +15
B
system, Sri $an#ans used internet to purchase things
online.
commerce in Sri $an#a had small
share comparing with retail mar#et.
@owever, there is an expectation that e
commerce mar#et in Sri $an#a will
increase *)A within
next five years since e"commerce is the fastest growing mar#et in %sia.
In ()1(, e"commerce mar#et growth in India was 1))A. Sri $an#a too can
anticipate this because,
Sri $an#an internet penetration is higher than India
6
Small and medium entrepreneurs
7
httpC??www.icta.l#?si?wsa()18.html
8
+ash on delivery system
4
Sri $an#a"()18
6etail mar#et
commerce mar#et
; 7SD billion (> 7SD million
Sri $an#an consumers are ready to spend more
0ith the spread of computer and internet all over the world, electronic contracts
has played significant role for not only commercial transactions but also daily
needs of the people. In Sri $an#a even for marriages, people use e"matchma#er.
&ot li#e past, e"commerce has developed today in Sri $an#a. %s surveys revealed
there was :))) deliveries of gifts via e commerce in 1: -ebruary ()1:.
=overnment initially involve in e"commerce at the present. =overnment advises,
2usiness establishments to visit Sri $an#a +6!E++ website and ta#e
preventing measures
If one<s business become a victim of I! based malicious act, he?she can call
Sri $an#a +6!E++ hotline to set technical assistance, which provide at a
reasonable fee.
I+!%
'
I+!% specially mandate to implement the "Sri $an#a development project.
"Sri $an#a project
!his initiative covers multiple sectors li#e I+! literacy and education, incentives to
promote the effective use of I+! for developing the private sector, and creating an
empowered #nowledge base society.
2y doing government eed to get competitive advantages. !arget =roup of Sri
$an#a project is0
.inistries
=overnment 5epartments
$egal F Gudicial Sector
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Information and communication technology agency which 5erives its authority from the information
and communication technology act no (; of ())8
5
+ommercial
2an#ing
Shipping and corporate sector
e-Law !ro"ect i intended to create the ena#ling legal
en$ironment for the de$elo!ment of I%& in 'ri Lan(a)
through the enactment of the re*uired law #y +arliament in
order to facilitate e-,o$ernment) e--uine a well a to
attract I%& related foreign direct in$etment.
1)
$an#a =ate
!his is first Sri $an#an governmental I+! payment gate, operated since ()1( very
successfully. Hisa issuing and payments can do through the internet.
5evelopment of information infrastructure
*'> &&%S%$%
11
are there under e"diriya project.
I+! training centers.
=overnment aim to increase computer literacy of Sri $an#ans unto ;>A in ()1*.
%lready there is setting up a data centre in @ambanthota.
2%S$
1(
, I+!% and %IG%
18
to host confab in -eb '"1)C promoting Sri $an#a as
legal outsourcing hub
1:
Sri $an#a export development project provides e"commerce facilities
!hey provide business credibility through a trade portal bac#ed by the State. !he
portal
1>
gives vendors a chance to display their company and products by
connecting them to hundreds of /ualified international buyers, distributors and
1/
1bjective of the 9roject, httpC??www.icta.l#?en?e"laws"project.html
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I+! centers for rural areas where people can access to computers, internet, and other digital
technologies.
12
&he -ar 0ociation of 'ri Lan(a
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International 0ociation of young lawyer
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IC1 !orkforce rises #y -+2 since (+3+0 4ational IC1 Workforce Survey (+3* reveals ,
httpC??www.icta.l#?en, 0ednesday, (> Ganuary ()1( 1(C:B
15
Sri $an#a export development website
6
agents. It
1*
said to buyers to follow their easy o nline 5egistration process and
find /ualified Sri $an#an companies who are ready to do business.
9ractical e commerce web sites in Sri $an#a
1. $21.$I
(. serendb 7I $td
%lthough past Sri $an#a tourist industry is comparatively behind e commerce,
*)A hotel boo#ing west today handle by e commerce. !here is e commerce
site call holiday Sri $an#a.com to boo# hotels through the internet.In ())8,
only 8A hotel boo#ings were in Sri $an#a through the commerce. In ()18 it
has increased up to B)A
8. ta#as.l#
-ounded in ()1(
:. Iapru#a.com " %cross Sri $an#a" %round the 0orld.
%t the time of starting this Sri $an#an people afraid to use credit card to pay
through the internet.
>. $a#sala
.cts0 5egulations0 Circulars0 6uidelines related to E-La!s and 7olicies of
Sri Lankan government
lectronic transactions act no 1' of ())*
Information and communication technology act no (; of ())8
Intellectual property act no 8* of ())8
+omputer crimes act no (: of ());
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Sri $an#a export development website
7
9ayment and settlement systems act no (B )f ())>
9ayment devices fraud act no 8) of ())*
laws project page of I+!% website
.obile payment guideline 18JmobileJpaymentJ()11J1e
lectronic payment to government institutions 9-::;
lectronic payments by government institutions )(J()18
La! reforms needed to encourage future international trade"
Issues relating to E commerce in Sri Lanka
1. $ac# of pay pal inward remittance facilities
!his was #ey problem for expanding internet based business that #eeps the Sri
$an#a out of global. 9ay pal is the preferred mode of payment that a country can
have. @owever, Sri $an#a recogni,ed this on ()1).
In ()18, Sri $an#a has ta#en steps to liberali,e inward payments through pay pal.
Sri $an#a is loo#ing to give the freedom of getting inward payments
through 9ay9al, a cost"effective global remittance and payments system
that has helped boost e"commerce in many countries, +entral 2an#
=overnor &ivard +abraal said
1;
(. Investors are lac# in Sri $an#a for technical companies
In other countries if someone wants to start a website, there is funding system.
!here is people call venture capitalist to fund them. &evertheless, no Sri $an#an
is li#e to invest in this area because they hope ( rupees benefit tomorrow if they
invest a one rupee today. !his situation should be change.
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httpC??www.lan#abusinessonline.com?news?sri"lan#a"loo#ing"at"freeing"inward"paypal"paymentsC"
cb"governor?11)18'B>1*
8
Inade8uate of e-commerce la!s in Sri Lanka
$aws are not ade/uate in Sri $an#a regarding certain areas that are essential to e
commerce li#eK
5igital contracts
Signatures
&otari,ations
!o engage with e"commerce there should be merchant account
1B
and payment
gateway provider
1'
. "laws in Sri $an#a should provide the necessary legal
environment for using electronic data and documents for officials and personnel
purposes and carrying out e transactions.
+entral 2an# =overnor &ivard +abraal said last month, that the regulator
was LseriouslyL loo#ing at liberali,ing 9ay9al inward remittances, which
had been bloc#ed in Sri $an#a.
()
!here are not enough policies to support e"commerce in Sri $an#a. "commerce
is in a very infant level yet. 9eople willing to engage with e commerce found it
difficult to
operate it smoothly.
9eople who do e commerce have to register as a retailer in Sri $an#a. !hey do
not have a category name commerce under the categories in company
registration act.
Intellectual property patterns also have very loose foundation in Sri $an#a.
6eason is there are no technical experts in the intellectual property offices in Sri
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Speciali,ed ban# account setup by a ban# that allows you to accept credit cards
19
It charges your customers credit cards via internet and sends the fund to your merchant account
2/
httpC??www.lan#abusinessonline.com?news?sri"lan#a"e"commerce"to"grow"exponentially"if"paypal"
liberali,edC"it"industry?()(B>8B;)8
9
$an#a. Since there are no enough laws to provide patent for e commerce issues,
people afraid to uncover their new ideas.
+yber security becomes more important, when government, business and the
citi,en are transition from physical world to e"world to meet their re/uirements.
%lso entrepreneurs in Sri $an#a has to change their attitude. Sri $an#a investors
are all about loo# in to return. !hose have to change in Sri $an#a because trust is
cornerstone of e commerce.
5ecommendations
=overnment canC
$aunch laws to promote consumerism relating to e commerce.
Improve infrastructure.
gC data centers
6etired people in Sri $an#a loo# for to engage with some wor# via
internet business. !hey need to give some education about scam sites
and online privacy. lse, people will spend thousands of rupees to fa#e
websites.
It will be good
If there have more funding opportunity
.ore technical experts< panels lin#ed with the government to support the
patent and intellectual property.
=overnmental institutions should ma#e foundation for e"commerce
=ive education to university students about e commerce
=overnmental officers should be trained to use I+! for perform their duty
%ll e"services should given (: hours
!here should be laws to protect personal data and information of citi,en
Increasing I+! usage among Sri $an#an will give effect to wide spread of e"
commerce.
1/
7ractical e$ample of e-commerce site operating Sri Lanka 9relating to its
legal frame!ork:
!his is about ta#as.l#, founded in ()1(
If a product offered through the Site itself is not described, and you are not
satisfied with the purchase, your sole remedy is to return it in its unused condition
to the Hendor concerned. It would be the Hendor<s responsibility to ensure
merchantability and fitness for a particular purpose of the products and services
they offer through the Site.
6ISI 1- $1SS
%ll items purchased from ta#as.l# are made pursuant to a delivery contract. !his
means that the ris# of loss and title for such items pass to you upon our delivery to
the carrier.
%99$I+%2$ $%0
!he Site and the !erms and +onditions herein contained shall be governed and
construed in accordance with the laws of Sri $an#a. 2y accessing the Site, you
agree that the laws of Sri $an#a will govern all matters relating to the Site without
giving effect to any principles of conflict of laws.
5IS97!S
Mou agree that any legal action, dispute or proceeding between !a#as and you for
any purpose concerning the !erms and +onditions or in relation to your visit to the
Site or the products you purchase through the Site or the parties< obligation
hereunder shall be governed by the %rbitration %ct &o 11 of 1''> in Sri $an#a.
%ny cause of action or claim you may have with respect to the Services must be
commenced within one 3)14 year after the claim or cause of action arises or such
claim or cause of action is barred.
(1
Conclusion
7ntil ()18, there is a /uestion in Sri $an#a that when is e commerce going to
ma#e an impact in Sri $an#a. +omparing with past years there is an increase of
the number of internet users. In ()18, four millions people had online access. Sri
$an#a has laws relating to e"commerce. 2ut those are not enough and cover the
most areas. !herefore, Sri $an#a needed to update laws relating e"commerce.
Security laws should be emerged. %de/uate remedies should introduce. If e"
21
httpC??ta#as.l#?terms"n"conditions?
11
commerce in Sri $an#a increases, it will really help to economic growth of Sri
$an#a as it has more benefits.
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