First of its kind: EU and Singapore enter into digital trade agreement

What is the objective of the DTA?

The DTA aims to ensure further predictability and legal certainty for online trade between Singapore and the EU, by seeking to find a common ground between both parties for a framework of uniform principles for digital trade. For this reason, it applies to all types of trade enabled by electronic means, including services, goods, and public procurement, among others. However, it specifically excludes any audio-visual and broadcasting services and governmental services or activities from its scope of applicability.

In the context of the DTA, a transaction enabled by electronic means is considered any transaction initiated and received via electronic equipment and is therefore not limited to only transactions made via the internet. However, this does not mean that the entire transaction has to be carried out via electronic means. For example, a physical product purchased via electronic means may subsequently be sent by post.

What is the legal effect of the DTA?

The DTA itself does not have any direct effect, meaning that it does not confer rights or impose obligations on any natural or legal persons directly. It only confers such rights and obligations on the parties to the DTA themselves. Therefore, for any of the provisions of the DTA to take effect, they will need to be further developed and implemented by the EU and Singapore first.

Whilst this DTA does not impose any specific obligations or rights natural or legal persons, it may lay the groundwork for further legal, regulatory, and policy initiatives in the respective jurisdictions. It is therefore expected that this DTA will set the scene for further alignment of digital trade principles between the EU and Singapore.

What are the key digital trade principles identified in the DTA?

The DTA aims to enhance digital connectivity and facilitate end-to-end digital trade between the EU and Singapore, and it does so through setting multiple digital trade principles, including, amongst others, the following:

Cross border data flows

The DTA facilitates cross border data flows between both parties through prohibiting unjustified data localisation requirements, and by prescribing the maintenance of a personal data protection legal framework.

Cybersecurity

Threats to cybersecurity are recognised as undermining the confidence in digital trade, therefore both parties are encouraged to identify and mitigate such threats by building their cybersecurity incident response capabilities, and collaborating with each other to identify and mitigate malicious intrusions or dissemination of malicious code.

Source code

The DTA protects natural or legal persons from being subject to the mandatory disclosure of the source code of software as a condition for the import, export, distribution, sale or use of such software, or of products containing such software. This provision further clarifies that such mandatory disclosure may be required only when necessary for legitimate purposes in the context of regulatory or legal proceedings, in accordance with local laws not inconsistent with the DTA.

Consumer protection and access to the internet

The DTA promotes and aims to guarantee the consistent application of consumer protection measures across the EU and Singapore, including the protection of consumers from misleading, fraudulent and deceptive commercial activities. It furthermore contains provisions unsolicited commercial electronic messages, prescribing the requirement to obtain consent from natural persons prior to sending such messages, in accordance with local laws.

The DTA further emphasises the benefits of ensuring that end users have access to the internet, subject to reasonable network management (e.g. network subscriptions) that does not block or slow down traffic for a competitive advantage.

Prohibition on customs duties and prior authorisations

The DTA contains an absolute prohibition on customs duties for any electronic submissions. It furthermore provides for a prohibition on prior authorisation requirements specifically targeting online services (with the exception of telecommunication, broadcasting, and gambling services, and certain professional legal or notarial services), as these services are considered key enablers of cross-border trade.

Open government data

The DTA encourages both parties to facilitate access to government data, without imposing conditions or requirements that may unduly prevent or restrict the use thereof for the purpose of:

1. reproducing, redistributing, or republishing the data;
2. regrouping the data; and
3. using the data for commercial and non-commercial purposes, including in the process for producing a new product or service.

Electronic contracts, signatures, payments, and invoicing

The DTA further aims to facilitate digital trade by promoting the validity and legal effect of electronic contracts, the use of electronic authentication measures, signatures and invoicing, and by recognising the importance of enabling secure, interoperable, and accessible electronic payment products. 

In line with this focus on a paperless environment for the trade of goods, both parties recognise the importance of eliminating paper forms and documents required for the import and export of goods, including by aiming to maintain single window systems to facilitate the electronic submission of all information and documents required for customs proceedings.

Cooperation

The DTA sets out further provisions on the cooperation between parties, including for the cooperation and collaboration on regulatory matters related to digital trade. In addition, parties are encouraged to identify and cooperate on joint initiatives in the field of standards, technical regulations and conformity assessment, and to co-operate with the private sector in both jurisdictions to further develop a greater understanding of these fields.

Concluding remarks – what’s next?

Now that the DTA has been signed, the formal next step will be for both parties to move forward with their ratification procedures, and for the EU this means obtaining the consent of the European Parliament. Once this ratification process have been finalised, the DTA will officially enter into force.

Once the DTA has entered into force, it is expected that the EU and Singapore will use it to further cooperate and find common ground in their approach towards digital trade.

Authored by Charmian Aw, Joke Bodewitz, and Femke van der Eijk.