Malaysia’s Digital Signature Law to Take Effect in October

Posted on August 28, 1998 
Filed Under AsiaBizTech, Julian

By Julian Matthews

August 28, 1998 (KUALA LUMPUR) — Malaysia’s Digital Signature Act 1997 will be implemented on Oct. 1, paving the way for the use of digital certificates in various e-commerce applications in the country.

Energy, Telecommunications and Posts Minister Leo Moggie said that Certification Authority providers may apply for licenses from the Department of Posts as soon as the law goes into force.

Moggie said the director general of posts Nasaruddin Che Abu has been appointed as Controller of Certification Authorities, and will be responsible for regulating and authorizing licenses. Also, he will oversee the implementation of the act, formulate relevant guidelines and regulations, and maintain a publicly accessible database of disclosure records of each licensed Certification Authority.

The new law opens the doors for branded Certification Authority providers to sell their systems in the country if they satisfy prescribed requirements of the controller. Moggie added that the criteria for selecting Certification Authorities would be made public soon.

Malaysia is among the first countries in Asia to formulate laws governing the use and application of digital signatures as a means to propel the country into the digital economy.

The Digital Signature Act 1997 was passed by the Parliament last year to address security and legal issues pertaining to electronic business transactions, especially those conducted over the Internet.

The Act says that a document signed with a digital signature shall be as legally binding as one signed with a handwritten signature, a thumb print or any other appropriate mark. Digital signatures created with public/private key cryptography systems are allowed to be used to authenticate data or messages transmitted over computer networks.

The Act provides for penalties consisting of fines and jail terms for those who purport to hold Certification Authority licenses or operate as such without licenses. Those operating illegally can be fined a maximum of 500,000 ringgit (about US$125,000) or jailed for 10 years, or both.

Nasaruddin said his office has had discussions with several agencies and companies involved in electronic transactions, including the National Central Bank, the Securities Commission, the Malaysian Electronic Payment System Sdn. Bhd., the national oil company Petronas Bhd. and the standards research body Sirim Bhd.

He said that the talks were focused on issues like consumer fees, application processes and the responsibilities of the certificate-issuing office.

Earlier, Moggie launched the establishment of a local company, Digicert Sdn. Bhd., which is one of the first to indicate its interest in becoming a certification authority. The startup company, which is funded at 15 million ringgit, is a joint venture of Pos Malaysia Bhd., which holds a 40 percent interest; Mimos Bhd., 30 percent; and GITN Sdn. Bhd., 30 percent.

Published in Asia BizTech, Aug 28, 1998

by Julian Matthews, Asia BizTech Correspondent

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