The legal landscape for digital transactions in the Maldives has been significantly modernized with the ratification of the Electronic Transactions Act (Law No: 2/2022) in April 2022. This landmark legislation provides the legal framework for the use and acceptance of electronic and digital signatures, aiming to foster greater trust and efficiency in the nation’s growing digital economy.
The Act formally bestows legal validity upon electronic signatures, ensuring that they hold the same weight and enforceability as traditional wet-ink signatures in most instances. This development is a crucial step towards reducing paperwork, streamlining administrative processes, and facilitating secure and swift electronic commerce.
Under the Act, an “Electronic Signature” is defined as electronic data that is incorporated into, attached to, or logically associated with other electronic data, and which serves as a method of authentication of the signatory in relation to the data and indicates the signatory’s approval of the information contained therein.
For an electronic signature to be considered reliable and legally valid, it must meet certain criteria, including:
- Being uniquely linked to the signatory.
- Being capable of identifying the signatory.
- Being created using means that the signatory can maintain under their sole control.
- Being linked to the data to which it relates in such a manner that any subsequent change in the data is detectable.
Key Provisions and Scope
The Electronic Transactions Act is comprehensive, covering a wide range of electronic dealings. Its primary objectives are to:
- Establish the legal validity of electronic transactions and communications.
- Promote the use of reliable electronic records and signatures.
- Ensure the security and integrity of electronic transactions.
- Facilitate e-government services and electronic commerce.
Exclusions from the Act
While the Act has a broad scope, it is important to note that certain documents and transactions are explicitly excluded from being executed electronically. These include:
- Wills and other testamentary documents.
- Trusts.
- Powers of attorney.
- Contracts for the sale or other disposition of immovable property.
- Negotiable instruments (such as promissory notes and bills of exchange).
For these specific legal acts, traditional physical documentation and handwritten signatures remain a requirement.
Implementing Regulations and the Path Forward
The Electronic Transactions Act mandates the formulation of detailed regulations to support its implementation. As of late 2024, the status of these regulations was a subject of inquiry within the Maldivian Parliament, indicating their critical role in the full enactment of the law. These forthcoming regulations are expected to provide further clarity on the standards for different types of electronic signatures, the accreditation of certification service providers, and other technical aspects.
In a related development, a draft Digital Identity Bill has also been in discussion, signaling a broader governmental push towards a comprehensive digital framework for citizens and businesses. While distinct from the Electronic Transactions Act, this bill, once enacted, is expected to complement the existing law by providing a secure and verifiable digital identity for individuals, which will further enhance the security and reliability of digital signatures.
The enactment of the Electronic Transactions Act marks a pivotal moment for the Maldives, paving the way for a more digitized and efficient future. Businesses and individuals are encouraged to familiarize themselves with the provisions of this new law as the nation continues to embrace the digital age.