Singapore Digital Economy Partnership Agreement 2021
The Digital Economy Partnership Agreement (DEPA) between Singapore, Chile and New Zealand is the first digital economy partnership concluded by Singapore. The DEPA is a first of its kind agreement that establishes new approaches and collaborations in digital trade issues, promotes interoperability between different regimes and addresses the new issues brought about by digitalisation.
Through DEPA, Singapore aims to develop international frameworks to support businesses engaging in cross-border digital trade and e-commerce. Further, digital economy agreements (DEA) will encourage greater cooperation in nascent areas, such as artificial intelligence (AI), and facilitate interoperability between digital systems, providing organizations the capacity to trial new technologies across different countries.
Digital Economy Partnership Agreement will facilitate seamless end to end digital trade, enable trusted data flows and build trust in digital systems. In addition to DEPA, Singapore has signed a DEA with Australia through the Singapore-Australia Digital Economy Agreement (SADEA), which has been in force since December 2020. The country is also in negotiations with South Korea to develop the Korea-Singapore Digital Partnership Agreement.
DEAs are part of the government’s strategy to strengthen underlying infrastructures to build up Singapore’s footprint as a global tech and e-commerce hub, as well as adding to the country’s extensive free trade agreement (FTA) network. DEPA will establish new approaches to digital trade issues, ranging from data innovation to ease of cross border data flow to promote AI. The digital economy agreement will ultimately help businesses lower the costs of operations and improve access to each other’s markets.
Key Features of The Singapore Digital Economy Partnership Agreement
A key feature of DEPA is that it will encourage paperless trade, thus reducing time for cargo clearance and any document transits. Technology can be used to assure document authenticity and provenance, which improves the efficiency of the trade. A Singapore exporter, for instance, can simply apply for an e-certificate of origin and an SPS certificate for their shipment. These trade documents will then be sent digitally to the customs of the destination country.
DEPA will encourage greater acceptance of e-payment solutions due to greater interoperability between payment systems. This will also enable secure cross-border payments and support more non-financial institutions, such as fintech firms, to offer such services. Moreover, to complement this digital trade agreement, Singapore approved the country’s first digital banking licenses in early December 2020, enabling non-bank entities to offer the same services as traditional banks except they operate without a physical setup.
The Agreement will allow e-invoices in Singapore to be recognized in Chile and New Zealand in addition to increased accuracy, efficiency, and reliability of commercial transactions. Singaporean SMEs can also participate in the country’s e-invoicing network by adopting the Pan-European Public Procurement On-Line (PEPPOL) e-invoicing solutions. Through PEPPOL, e-invoices are generated, transmitted, and processed digitally, without requiring manual inputs. PEPPOL is in use in over 30 countries and as of December 2020, over 27,000 local businesses are connected to the system.
DEAs like DEPA will enable countries to develop safe and secure digital identities. This can significantly streamline business processes from opening bank accounts to company registration. Partners within DEPA can facilitate initiatives that promote the compatibility of different digital identity regimes. In doing so, procedures such as Know-Your-Client (KYC) checks by banks can be done more efficiently and in any DEPA partner country, since the bank only requires the company’s digital identity. This due diligence process currently can take over three months to complete.
Parties in DEPA will allow data to flow freely across borders which, in turn, facilitates a conducive environment for businesses to develop new products and services from data-driven innovations. This includes the use of AI for which there will be the adoption of an ethical AI governance framework. This will ensure that DEPA partner countries harness AI in a responsible manner. Furthermore, this digital agreement means businesses can pilot and commercialize their data-driven products and services with overseas counterparts from DEPA, therefore accelerating cross-border innovation.
DEPA will ensure greater personal data protection, particularly as data will be transferred across borders. Businesses in Singapore can currently apply for APEC Cross Border Privacy Rules (CBPR) certification. If they secure this certification, it will demonstrate the company’s robust data protection policies consistent with the APEC Privacy Framework. Further, CBPR certified businesses can exchange data with similarly certified companies from across Singapore’s DEA network, as well as with other jurisdictions that have adopted the APEC CBPR System.
How Can We Help
At Valsen Fiduciaries Group, our experienced staff, combined with our global network, allow us to provide the ongoing support you need – wherever you need it, at home and abroad, whatever the size of your organisation. We are at your disposal to help you further clarify and understand the benefits you can derive form the Digital Economy Partnership. Please contact us through firstname.lastname@example.org or +248 2 525 217