Home ›› 21 Sep 2022 ›› Editorial
Bangladesh has adopted a number of policies, strategies and action plans to support the development of the national e-commerce sector. Vision 2021 which has been termed ‘Digital Bangladesh’ remains a significant policy drive for Bangladesh utilizing ICT-led growth to promote socio-economic development. It goals for establishing digital government services that benefit the poor and connect citizens through equitable internet access.
The ICT Act of 2006 was the legal support for establishment of e-government networks. The Act was put in place as a legal foundation for digital transactions in Bangladesh and the forming of a complex e-government network that supports e-commerce development. The ICT Act also recognizes online contracts and digital signatures, and provides for dispute resolution mechanisms. The Act, amended in 2013, included provisions for imprisonment and/or fines for cyber-crimes. The enactment of the Act has had significant implications for e-commerce and mobile commerce users and companies in Bangladesh. Another law - The digital Security Act 2018 has provision of establishment of Digital Security Agency and punishments for forgery and fraudulence with the use of computers.
The government issued The National Digital Commerce Policy of 2018 to facilitate development through a joint partnership with public and private sector and to protect consumer rights through co-operation. It has broadened financial access to permits for developing digital commercial SMEs, establishment and growth of businesses within the digital commerce space. The policy has created accountability in digital commerce operations by ensuring enhanced transparency in digital business practices.
By this time, Ministry of Commerce has issued e-commerce guideline 2021 and updated the operational procedure of digital market places. Digital marketplaces will also need to display (sec 3.1.2) detailed information of sellers or merchants, i.e., third-party users providing goods or services online. It gives detailed explanations about displaying product and services information in the marketplace, general rules, presentation of sale of goods or services in the marketplace, product delivery, advance payment price adjustment etc. As per guidelines, products presented online to the buyers should have a clear description for the consumer to have a realistic idea of what they are buying.
According to the new guidelines, an agreement must take place between the marketplace authority and the seller or merchant before the sale of goods or services through the marketplace (sec 3.1.16). Besides, the terms and conditions regarding the purchase of the product, such as return policies (sec 3.5.1,2,3), potential price change policies, delivery method and time, or product change policies should also be displayed by marketplaces.
According to the guideline, marketplace authorities will have to take appropriate action for complaints about products and services and appoint a compliance officer who can coordinate with other agencies, including the Department of Consumer Protection (sec 3.4.1).
Furthermore, the guideline has provided directives for perishable goods to be delivered as soon as possible and prohibited the sale of expired or adulterated goods (sec 3.3.8). If there is any special software or cookies on the seller’s website, the buyer needs to be informed in advance, the guidelines say (sec 3.1.6).
As per the guidelines, if any personal information needs to be collected the consumer’s prior consent must be obtained stating what information will be collected, where the information will be stored, and how it will be used (sec 3.1.7).
Digital marketplaces have been asked to get at least one trade licence that has to be displayed in the marketplace or social media page. A Unique Business Identification Number (UBIN) will be made mandatory for all digital commerce organizations in phases as per the guideline (sec 3.1.12). Market places will have to collect a licence from the Department of Drug Administration for the purchase and sale of medicines and medical supplies through digital means (3.1.5).
A certificate from a quality controlling authority also needs to be obtained in all cases where there is an obligation Sec 3.2.5). All the instruction and details of the products must be mentioned in the level in Bangla language and may be additionally in any other language (sec 3.1.17). This may through a challenge for the goods imported from other countries.
The guidelines also say, foreign marketplaces have to obtain a local license (sec 3.1.18) but there are no details of the procedure. The presence of overseas players usually takes a dominant rule in any market. Bangladesh must promote overseas investment with 100% FDI and by balancing the policy to look into interest of local players and consumers. Bangladesh yet to have an effective e-commerce policy of investment mentioning the such as marketplace model and inventory based model. Preference should be given to the marketplace model of ecommerce. The pure market place e-commerce company can only provide a platform for local third party buyers and sellers to come together and trade goods.
The e-Commerce guidelines finalized keeping 5-day delivery time and for buyers based in a different city from the sellers, e-commerce companies would have a maximum of 10 days to deliver goods after advance payment (sec 3.3.2). According to the guidelines, e-commerce platforms will hand over ordered products for delivery within 48 hours of receiving advance payment and they will also notify the customers via sms, email or phone calls (sec 3.2.10). In the next 72 hours, the delivery person or companies will supply the items to the clients.
For purchase with advance payment, the guidelines say e-commerce companies must already have the showcased items ready to ship – either in their own stock or with a registered third party. If a product is not ready for handover within 72 hours of the payment, the companies will not take more than 10% of the price in advance. A 100% advance payment can be charged in this case only through the Bangladesh Bank's escrow service (sec 3.2.10).
All types of digital wallets, gift cards, cash vouchers or any other medium which can be used as an alternative to cash cannot be launched (sec 3.1.9), used, bought or sold without the permission of Bangladesh Bank."
Bangladesh Bank has issued a directive that the advance payments will remain with the gateways, and will enter e-commerce platforms' accounts only after delivery. The cashback offers or discounts must be effective immediately after the sales as the e-commerce companies will not be allowed to keep the cashbacks in their wallets.
The growth of the industry has been inhibited by low usage of credit and debit cards (cash remains the major payment method) and the unavailability of or restrictions on major online transaction sites such as PayPal. There exist financial limitations procedure is a challenge to increasing e-commerce penetration rates. In particular, digital businesses are faced with limits for outbound payments in foreign currency for international transactions. In March 2017, Bangladesh’s central bank gave permission to state-owned Sonali Bank to launch online money-transfer services with PayPal in the country. But the policy should be relaxed further up to global level.
There should be Insurance policy for the protection of the businesses and consumers from larger accident and fraud incidents. Government yet to form e-Commerce Cell in the Ministry of Commerce as per e-Commerce Policy 2018. The e-commerce guideline 2021 has been issued by WTO Cell at Ministry of Commerce. Both e-Commerce policy 2018 and guideline 2021 is lacking redressal procedure. There should be a provision of Alternative Dispute Resolution (ADR) to resolve the dispute between market place and supplier, career and consumers etc. Dispute Resolution Mechanism should be clearly stated and communicated properly to the stakeholders. Bangladesh has Arbitration Act and allow cross border implementation of arbitral judgement.
Bangladesh has now enough laws and policies. These may be updated and improve support services especially digital transactions from home and abroad.
The writer is Non-Government Adviser, Bangladesh Competition Commission. He can be contacted at [email protected]
