Government in two minds over framing new e-commerce law

Confusions have arisen over whether a new law will be formulated or the existing ones should be amended to regulate the e-commerce sector.

With the government pressing for a new law, entrepreneurs insist a reform to the existing ones would do.

The committee, formed by the government to formulate an e-commerce law and also establish an authority for the sector, held its first meeting at the commerce ministry on Tuesday.

At the meeting, e-commerce entrepreneurs proposed amending the existing laws instead of formulating a new one.

They think if a new law comes with strict rules, new entrepreneurs will be under pressure.

They also think controlling e-commerce companies using the existing laws is possible in the same way other businesses are regulated.

Responding to the entrepreneurs’ proposal, the committee formed a nine-member sub-committee.

The sub-committee will review the proposal and also the government’s plan to formulate a new law.

The sub-committee, which will hold a meeting every week, will submit their recommendations within 30 days.

Representatives from the commerce ministry, the Legislative and Parliamentary Affairs Division, the e-Commerce Association of Bangladesh, the Directorate of National Consumer Rights Protection, Bangladesh Competition Commission, the Bangladesh Association of Software and Information Services (BASIS), the Bangladesh Financial Intelligence Unit under the central bank, and a2i are in the sub-committee.

Commerce Secretary Tapan Kanti Ghosh told The Business Post on Tuesday a decision would be made after getting the sub-committee’s recommendations.

He said escrow services would be introduced to solve financial transaction problems in this sector.

“An online registration form required to run e-commerce operations has been drafted, and all entrepreneurs in this sector have to register once it is finalised. Otherwise, they will not be allowed to do business,” he said.

He also said forming an authority for the sector would take time and that is why the c-commerce cell would be strengthened for now.

Additional Secretary of the commerce ministry AHM Safiquzzaman said whether a new e-commerce law would be formulated could be known in a month.

“We currently have the consumer rights protection act, the competition act, and the Digital Security Act. We can add a few new sections or sub-sections to those,” he said.

“But it will take time. Also, the finance ministry and the public administration ministry should be included in forming an e-commerce authority.”

E-Commerce Association of Bangladesh President Shomi Kaiser told The Business Post the existing laws could not be applied properly to regulate the e-commerce sector.

“We do not need any new law. We just need to strengthen our monitoring cell.”

The e-commerce committee was earlier asked to make recommendations within 15 days about what to do to solve the problems in this sector.

It was also asked to draft a law to manage and control e-commerce businesses and take effective steps to create the structure and determine the functions of a digital commerce authority within two months.

It was decided that after the law is passed and the e-commerce authority is formed, the authority will start its journey within six months.

Currently, an online business can be legally launched in two ways – by taking a trade licence from city corporations, municipalities, or union councils, or registering the company with the Registrar of Joint Stock Companies and Firms.

But no licence is usually taken in case of F-commerce.

At present, e-commerce businesses are regulated by the e-commerce policy 2020, the Digital Commerce Operation Guideline 2021, and the consumer rights protection act.

Under the consumer rights protection act, the punishment for fraud in business is a one-year imprisonment or a fine of Tk 2 lakh.

Besides, the failure to provide the promised goods and services is punishable by a one-year imprisonment or a fine of Tk 50,000.

If the same crime is committed more than once, the punishment will be doubled.

Under the Digital Security Act, a fraud is punishable by a five-year imprisonment or a fine of Tk 5

lakh.

Besides, the Bangladesh Bank has issued multiple circulars to control the e-commerce sector.

In addition, the Penal Code, the Companies Act, and other laws are applicable to e-commerce.

But punishments under these laws are much less compared to the severity of the crimes. Due to this, frauds committed by e-commerce companies could not be stopped.

AKM Fahim Mashroor, former vice-president of BASIS and chief executive officer of Ajkerdeal.com, told The Business Post amending the existing laws would solve many problems in some cases, but there is no need to make new laws.

He said imposing more restrictions through new laws would hamper small businesses.

“Even if a big company does business according to the rules, small traders will be in trouble. Millions of entrepreneurs are engaged in small businesses in this sector.”

Recently, Attorney General AM Amin Uddin said e-commerce businesses should be brought under new laws to protect consumers from

frauds.