Thailand Facilitates Key Digital Reforms Through Electronic Transaction Act Amendments

Over the years, Thailand has been characterized by its ability to adapt to upcoming developments in the digital sector which has made it an attractive investment destination for multinationals and startups alike. Part of this has been the willingness of Thai policy-makers to accommodate new and innovative digital trends and methods; including the enforcement of contracts and agreements that have been entered by digital means.

Following several iterations, the draft revisions made to the Electronic Transaction Act (“ETA”) was finally approved by the National Legislative Assembly and promulgated into law in 2019 with the aim of mitigating hindrances to the country’s ability to facilitate electronic transactions and aligning Thailand’s digital regulations with the United Nations Convention on the Use of Electronic Communications in International Contracts. The revisions to the Act have been extensive and have thus been summarized below:

Automated Electronic Data Exchange System (“AEDES”)

The latest version of the ETA defines AEDES as a computer program, electronic method, or any other digitally performed operation made in the absence of a natural person. Section 13 of the Act states that contracts made between a) a natural person and an AEDES or b) between two or more AEDES will be enforceable and therefore legally recognized under Thai law. The ETA also prohibits stakeholders from dismissing the validity or legal effect of contracts involving AEDES on the basis that no natural person was present during their inception. This has been done in order to facilitate automated digital transactions.[1]


Invitation to make offers

The ETA’s latest iteration includes the notion of an electronic invitation to make offers which is defined as a) an offer made to a non-specific person that is publicly accessible by means of electronic communication or b) an offer that permits automatic responses via electronic communication. What this entails is that contracts will not necessarily be concluded upon the receiver’s response as was implied in the old version of the Act. Rather, a contract will be formed only upon the acceptance of the recipient’s response by the sender.[2]


E-signatures

The previous ETA stipulated that anyone who inputs an e-signature is required to certify that the content of the electronic message is indeed their own.[3] However, the revisions made to the ETA now indicates that an e-signature can be signed without the need to verify all the contents of the electronic data, such as in the case where the signatory acts as a witness. Therefore, the amended version of the Act broadens the definition of an e-signature wherein signatories do not necessarily agree to the terms indicated in the electronic message, meaning they can simply sign as witnesses rather than being party to the conditions listed therein.


Digital IDs

Having incorporated concepts introduced in the 2018 Digital ID Bill, the latest ETA recognizes the authentication of digital identities made electronically, thereby allowing identity verification without the need to physically undergo KYC processes.[4]

E-service businesses

Last year’s draft of the ETA states that those wishing to conduct services related to electronic transactions must either have a branch office or representative office in Thailand as well as an established place of business unless they are specifically exempted by the Prime Minister under the guidance of the Electronic Transaction Commission. The latest amendments, however, scraps these requirements, but states that further regulations may be issued to govern these services where they will be required to notify and register the business with relevant agencies and obtain the necessary licenses on a case-by-case basis.[5]

Given the above-mentioned, the latest ETA is expected to facilitate a broader scope for conducting electronic transactions, making way for further regulations surrounding services that involve digital transactions. Silk Legal will continue to keep track of any developments regarding possible requirements for businesses that wish to facilitate digital transactions.

Over the years, Thailand has been characterized by its ability to adapt to upcoming developments in the digital sector which has made it an attractive investment destination for multinationals and startups alike. Part of this has been the willingness of Thai policy-makers to accommodate new and innovative digital trends and methods; including the enforcement of contracts and agreements that have been entered by digital means.

Following several iterations, the draft revisions made to the Electronic Transaction Act (“ETA”) was finally approved by the National Legislative Assembly and promulgated into law in 2019 with the aim of mitigating hindrances to the country’s ability to facilitate electronic transactions and aligning Thailand’s digital regulations with the United Nations Convention on the Use of Electronic Communications in International Contracts. The revisions to the Act have been extensive and have thus been summarized below:

Automated Electronic Data Exchange System (“AEDES”)

The latest version of the ETA defines AEDES as a computer program, electronic method, or any other digitally performed operation made in the absence of a natural person. Section 13 of the Act states that contracts made between a) a natural person and an AEDES or

  1. b) between two or more AEDES will be enforceable and therefore legally recognized under Thai law. The ETA also prohibits stakeholders from dismissing the validity or legal effect of contracts involving AEDES on the basis that no natural person was present during their inception. This has been done in order to facilitate automated digital transactions.[1]

Invitation to make offers

The ETA’s latest iteration includes the notion of an electronic invitation to make offers which is defined as a) an offer made to a non-specific person that is publicly accessible by means of electronic communication or b) an offer that permits automatic responses via electronic communication. What this entails is that contracts will not necessarily be concluded upon the receiver’s response as was implied in the old version of the Act. Rather, a contract will be formed only upon the acceptance of the recipient’s response by the sender.[2]


E-signatures

The previous ETA stipulated that anyone who inputs an e-signature is required to certify that the content of the electronic message is indeed their own.[3] However, the revisions made to the ETA now indicates that an e-signature can be signed without the need to verify all the contents of the electronic data, such as in the case where the signatory acts as a witness. Therefore, the amended version of the Act broadens the definition of an e-signature wherein signatories do not necessarily agree to the terms indicated in the electronic message, meaning they can simply sign as witnesses rather than being party to the conditions listed therein.


Digital IDs

Having incorporated concepts introduced in the 2018 Digital ID Bill, the latest ETA recognizes the authentication of digital identities made electronically, thereby allowing identity verification without the need to physically undergo KYC processes.[4]


E-service businesses

Last year’s draft of the ETA states that those wishing to conduct services related to electronic transactions must either have a branch office or representative office in Thailand as well as an established place of business unless they are specifically exempted by the Prime Minister under the guidance of the Electronic Transaction Commission. The latest amendments, however, scraps these requirements, but states that further regulations may be issued to govern these services where they will be required to notify and register the business with relevant agencies and obtain the necessary licenses on a case-by-case basis.[5]

Given the above-mentioned, the latest ETA is expected to facilitate a broader scope for conducting electronic transactions, making way for further regulations surrounding services that involve digital transactions. Silk Legal will continue to keep track of any developments regarding possible requirements for businesses that wish to facilitate digital transactions.

 

[1] Section 13, “Electronic Transaction Act B.E. 2544 (No. 3),” Thailand National Assembly (12 April 2019).

[2] Section 13/1, “Electronic Transaction Act B.E. 2544 (No. 3),” Thailand National Assembly (12 April 2019).

[3] Section 26, “Electronic Transaction Act B.E. 2544 (No. 3),” Thailand National Assembly (12 April 2019).

[4] Section 34/3, “Electronic Transaction Act B.E. 2544 (No. 3),” Thailand National Assembly (12 April 2019).

[5] Section 32, “Electronic Transaction Act B.E. 2544 (No. 3),” Thailand National Assembly (12 April 2019).