Barbados Has Entered The E-Commerce Fray

1. Barbados recently enacted The Barbados Electronic Transactions Act (ETA), 2001 relating to electronic signatures to enable it to remain among the most progressive and diversified International Financial Centres, and to establish itself also as an E-Commerce Centre as well. The ETA is part of a legislative package that includes the Evidence Act1 and the Interpretation Act2, with a third enactment on Consumer Protection promised shortly. There already exists the Fair Trading Commission Act3 to restrict unfair competition particularly with respect to Utilities. This legislation brings Barbados into line with OECD countries, and with a small number of Financial Centres in the Caribbean, including Bermuda and the Cayman Islands.

2. International financial services relate to the activities of individual corporate entities whose assets and liabilities attach to non-residents where the transactions are initiated abroad, and which are owned and controlled by non-residents. The services may be banking, funds management, insurance, trust business, and asset management and protection, and related areas, and the reason for their use of such centres and their choice of a particular centre, are a low and competitive tax regime, the existence of a facilitatory legal and regulatory regime, and a commodious infrastructure consisting of political stability, professional and skilled human resources, access to international communications, and other supporting characteristics.

3. E-commerce is essentially, the trading on the Internet, of goods and services normally delivered off line, such as financial services, and products that can be digitized, including computer software, books, music, and videos. The term E-commerce is sometimes used narrowly as relating to financial transactions, with E-business being used in relation to business processes. E-business of course, embraces E-commerce. With the Internet, transactions take place in the virtual environment in which national boundaries of tax jurisdictions are effectively dismantled.

4. Since both E-Commerce and Financial Services are based primarily on similar tax, legal and regulatory and other facilitating operating environments, and the nature and scope of their activities overlap, they bond easily, and complement and support each other. However because E-commerce is Internet based, its operations necessitate a review of the existing legal and regulatory framework which is paper based, and assume the physical limits of national and political boundaries. It also calls for the establishment of new or modified legislative and technical arrangements. ETA laws are therefore an element of that modified legal framework.

5. The enactment by Barbados of the ETA thus represents...