The Electronic Transaction Proclamation No. 1205/2020 has come to effect as of 30th June 2020. This legal update highlights the key provisions included in the Proclamation relating to electronic messages and electronic transactions.
1. Raison d'être of the Proclamation
The preamble of the Proclamation provides three reasons that necessitated its enactment. The first is “to provide equal treatment to users of paper and computer-based information” and by doing so, the Proclamation intends to create a more secure legal environment, which enables and facilitates the use of electronic transactions.
The second is “using electronic commerce positively affects market opportunities, thereby empowering citizens to be included in the economy and also to enable Ethiopia to be part of the digital era”. The third is “deploying electronic government service in support of good governance is essential for building effective, accountable and inclusive institutions at all levels”.
2. Definition of Electronic Transaction
The Proclamation has defined electronic transactions as “the conducting of businesses over computer-mediated networks including mobile phones and other devices” and it includes but not limited to “electronic commerce and electronic government services” [Article 2 (19)].
Electronic commerce is also defined by the Proclamation as “transaction of goods and services through the Internet and other information networks” [Article 2 (12)]. Although no explicit definition is given to electronic government services, from the readings of the provisions of Articles 35 to 37 of the Proclamation, it can be deduced that these services include “issuance of permits, licenses or approvals or making or receiving payments by government agencies, in the form of electronic message or by electronic means”. Publication of laws in the Federal Electronic Negarit Gezeta and the publication of directives of the Federal executive bodies in the Federal Electronic Register of Laws is also included in electronic government services.
3. Applicability of Electronic Transaction
The provision of Article 3 of the Proclamation shows that it is applicable to all government institutions, which have the power and function to provide services to the public, and on electronic commerce, electronic government services, electronic messages, “et” domain name administration and related matters.
However, the Proclamation will not be applicable to:
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transactions and matters relating to personal status such as marriage and divorce;
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transactions related to the making, execution, or revocation of a will or testamentary instruments;
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court procedures, judicial summons, search orders, arrest orders, and judicial decrees;
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transactions related to the transfer of any interest in immovable property; and
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the creation, performance, or enforcement of power of attorney.
It should be noted that it is not mandatory for a person to use, provide or accept any electronic message in any commercial transaction or dealings with government bodies unless such a person consents to using, providing, or accepting the electronic message [Article 4].
4. Legal Effects and Admissibility of Electronic Message
As stated in its preamble, the Proclamation has given legal effect to the information contained in an electronic message. Article 7(1) provides that “information shall not be denied legal effect solely on the ground that it is in the form of an electronic message”. Similarly, writings, signatures (of the concerned persons as well as that of the witnesses), and seal that is included in electronic messages are given legal effects as long as they fulfill the requirements of Articles 8 to 11 of the Proclamation. Please note that the provision of Article 2 (21) has defined information to include “text, message, data, voice, sound, database, video, signals, software, computer programs, including object codes and source codes.”
As stated in Article 13 (1), electronic messages will be legally acceptable and admissible as evidence in any legal proceedings. Article 13 (2) mandates courts to use the factors that are stated from Article 13 (2) (a) to (d) in assessing the evidentiary value of the electronic message.
5. Formation of Contracts Through Electronic Message
Article 17 of the Proclamation allows contracting parties to agree so as they partially or wholly use the electronic message as an instrument to an offer, to the acceptance and revocation of the offer, or to any revocation of acceptance or to any of their communications relating to the formation of contracts.
6. Electronic Publication of Laws
Article 18 of the Proclamation makes it legally acceptable the publications of laws electronically. To this effect Article 36 (1) of the Proclamation has established Federal Electronic Negarit Gazeta. Similarly, Article 37 (1) of the Proclamation has established the Federal Electronic Register of Laws in which directives of the Federal executive bodies will be published. sub-articles 2 of Articles 36 and 37 requires all persons to take legal notice of the laws and directives to be published in an electronic form.
7. Protection of Consumers
A supplier who offers goods and services by way of an electronic transaction is required to include to its consumers the information that is listed under Article 28 from sub-article 1 (a) to sub-article 1 (o) on the website on which such goods and services are offered. Most of this information enables the consumer to identify the supplier, the goods and services to be supplied, and the terms and conditions of such supply.
Article 28 (2) requires a supplier of goods and services to give a consumer an opportunity to review the entire electronic transaction, to correct any mistakes, and to withdraw from the transaction, before finally placing any order. As provided under Article 28 (2), in the case where the supplier fails to comply with the provisions of Articles 28 (1) and (2), the supplier is entitled to cancel the transaction within 14 (fourteen) days of receiving the goods or services and where such cancellation occurs, the consumer is required to return the goods or stop using the services and the supplier is required to refund all payments it has received less the direct cost of returning the goods. A broader cancellation right is also given to the consumers as can be seen from the provision of Articles 29 and 31 of the Proclamation.
The consumer protection provisions that are included in the Proclamation are applicable irrespective of which country’s law is applicable to the transaction and excluding the applicability of any of the provisions relating to consumer protection by agreement is made null and void [see Articles 32 and 33].
Finally, a consumer is also given the right to complain to the Ministry of Innovation and Technology, where the supplier fails to comply with the provisions of the Proclamation that are aimed at protecting the interest of consumers.
8. Recognition of Operators as Commercial Entities
Electronic commerce operators, electronic commerce platform operators, and electronic commerce intra-platform operators are recognized as “commercial entities” and all laws applicable to commercial entities will be applicable to them [see Article 41(1)].
As can be seen from Article 2 (13), an electronic commerce operator is “a person that engages in the business activities of selling commodities or providing services through the Internet or other information network”, while electronic commerce platform operators are “legal entities who, in electronic commerce, provide two or multiple parties with online sites for business operations, match-making, information release, and other services, for the latter to carry out trading activities independently” [see Article 2 (14)]. Intra-platform operator is “any entity which aggregates electronic commerce operators that sell commodities or provide services through electronic commerce in different categories” [see Article 2 (24)].
Please see the attached Proclamation No. 1205/2020 for further details.
Posted on November 16th, 2020
| File | Description | File size |
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 Electronic Transaction Proclamation No. 1205_2020.pdf | 21002 kB |