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DEA graphic 1

What are Digital Economy Agreements (DEAs)?

 

 

A Digital Economy Agreement (DEA) is a treaty that establishes digital trade rules and digital economy collaborations between two or more economies. Through DEAs with key partners, Singapore hopes to develop international frameworks to foster interoperability of standards and systems and support our businesses, especially SMEs, engaging in digital trade and electronic commerce.

 

The DEAs aim to build on Singapore’s extensive network of free trade agreements and other digital cooperation initiatives. They also complement Singapore’s leadership role at the World Trade Organisation (WTO) as the co-convener (together with Australia and Japan) of the Joint Statement Initiative on E-Commerce (JSI).

 

Singapore has concluded negotiations on two DEAs:

 

  1. Digital Economy Partnership Agreement (DEPA) – with Chile and New Zealand; and
  2. Singapore-Australia Digital Economy Agreement (SADEA).

 

Singapore has also launched negotiations with the Republic of Korea on a Korea-Singapore Digital Partnership Agreement (KSDPA). 

 

We hope to conclude further agreements with other like-minded economies in the future.

 

 


"Digital trade is a key source of our economic growth. Businesses that are able to navigate and tap on international markets in the new digital environment will have a competitive advantage. Singapore is a strong proponent of an integrated, global digital economy.”

- Mr. Chan Chun Sing, Minister for Trade and Industry


"Digital Economy Agreements herald a new era of global digital connectivity. With like-minded partners establishing clear and harmonised interoperability rules, and working together to address new issues brought about by digitalisation, we can create new possibilities for digital economies."

- Mr. S Iswaran, Minister-in-charge of Trade Relations and Minister for Communications and Information

 

DEA graphic 2 

Why are DEAs important for Singapore?

 

 

 

The digital economy is the future. Digitalisation and technological disruption, accelerated by the impact of the COVID-19 pandemic, have transformed consumer behaviours and business models considerably and created new opportunities. For example, e-commerce has enabled manufacturers to reach consumers directly. The rise of platforms and apps with multiple integrated services from transport to finance and telemedicine have changed how services are consumed. Businesses are also increasingly reliant on electronic transactions and digital solutions, from sourcing to invoicing and payments. Secure and seamless cross-border data flows are essential to the growth of the digital economy and to ensure that consumer’s interests are safeguarded.

 

The digitalisation of trade has also brought greater attention to regulations which require the forced localisation of data or disclosure of source code. Fragmented rules on data protection has also led to varying restrictions for personal data transfer and increased compliance costs. 

 

The DEAs aim to address these challenges to better enable our businesses, including SMEs to connect internationally with partners overseas.

 

The DEAs will:

 

  1. Align digital rules and standards, and facilitate interoperability between digital systems;
  2. Support cross border data flows and safeguard personal data and consumer rights; and
  3. Encourage cooperation between Singapore’s economic partners in nascent areas such as digital identities, Artificial Intelligence (AI) and data innovation. This gives organisations the scope to trial use-cases and technologies across different countries.

 

DEA graphic 3 

How can businesses benefit from the DEAs?

 

 

 

The DEAs establish common frameworks and rules for digital trade that will enable companies in Singapore to connect digitally with their overseas partners more seamlessly. The goals of the DEAs are ultimately to lower the cost of operations, increase business efficiency and create more seamless and easier access to overseas markets.

 

As a start, businesses in Singapore can participate in the following digitalisation initiatives. These are aligned to modules in the DEAs, which will help extend their benefits to their cross-border businesses and transactions when the DEAs enter into force.

 

 

AGREEMENTS / COLLABORATIONS 

AGREEMENTS / COLLABORATIONS 

MODULES 

MODULES 

Here are select modules, which can be found in some or all of our DEAs. 
1-Artificial Intelligence    


The DEAs promote the adoption of ethical AI governance frameworks, which set out principles to harness AI responsibly. This would help create consensus on governance and ethics principles and build trust in AI systems used across borders. Singapore organisations developing AI systems will find it easier to adopt and use AI technologies responsibly across the countries’ jurisdictions based on the common principles set out in the governance frameworks, and to align their governance practices with these frameworks.

 

Found in: DEPA, SADEA

 

To find out more about Singapore’s Model AI Governance Framework and how other companies have successfully aligned their AI practices, please click here.

 

2-Cross-Border Data Flows  

 

Cross-border data flows are increasingly important to the growth of the digital economy as it supports electronic commerce and other digitally-enabled activities, such as data analytics and AI. Under the DEAs, parties agree to allow data to flow freely across borders and prohibit the localisation of data except for legitimate purposes such as personal data protection. This facilitates a conducive environment where businesses can:

 

  1. Serve their customers regardless of where they are located, with new business models (e.g. software-as-a-service) and digitally native products and services (e.g. online games and video streaming);

  2. Develop new products and services from data-driven innovation across borders; and


  3. Choose where they can store their data. 

 

Found in DEPA, SADEA

 

3-Personal Data Protection

The protection of personal data is key to maintaining trust in the digital economy and the development of cross border trade. As businesses carry out electronic transactions across borders, personal data is being transferred as part of these transactions. They would also have to navigate the different policies and legislations on the handling and transfer of personal data across borders, depending on the countries’ data protection regimes.

 

Singapore will develop mechanisms with its DEA partners to promote compatibility and interoperability in their respective legal approaches, to facilitate cross border data flows and provide safeguards for such data.

 

An example is the mutual recognition of certification frameworks and national trustmarks for organisations.

 

To find out more about the Data Protection Trustmark Certification, please click here.
To find out more about APEC Cross Border Privacy Rules (CBPR) System, please click here.

 

For organisations based in Singapore, obtaining the APEC CBPR certification helps to provide assurance and validation of their personal data protection standards. It also increases business competitiveness, as the APEC CBPR is a visible badge that recognises an organisation’s robust data protection policies and helps the organisation build trust with consumers and partners.

 

The APEC CBPR System requires participating businesses to implement data privacy policies consistent with the APEC Privacy Framework. The APEC CBPR System benefits organisations as it can reduce cost and time with a single consistent set of privacy standards that facilitates international data flows. In addition, it helps to bridge differing national privacy laws of the DEA Parties who are also participants of the APEC CBPR System.

 

This means that a CBPR-certified organisation will be able to seamlessly and securely transfer and exchange data with other similarly certified organisations, across Singapore’s DEA partners and jurisdictions that have adopted the APEC CBPR System.

 

 

 

Found in DEPA, SADEA

 

 

4-Data Innovation

With DEAs, organisations can receive better support to develop new products and services as Governments promote data-driven innovation across borders. For instance, data regulatory sandboxes can be established to create safe environments where companies can innovate in consultation with Governments; and resources such as the Trusted Data Sharing Framework, which helps organisations to collaborate with their overseas counterparts and share data.

 

Companies exploring the development and commercialisation of data-driven products and services with their overseas partners will be able to pilot their services, in consultation with government policy makers. This helps the companies address their cross-jurisdiction data flow issues and accelerates cross border data innovation.

 

Interested companies can approach IMDA on how they can participate.  For more details, please click here.

 

Found in DEPA, SADEA

 

5-Digital IDs

 

 

 

Digital IDs (e.g. Singapore’s CorpPass) provide data from government-verified sources to form a digital user profile. Among other benefits, digital IDs significantly streamline business processes, including company registrations and opening of corporate bank accounts. Cumbersome processes such as Know-Your-Client (KYC) checks and invoicing can also be performed swiftly. Through the DEAs, we hope to work with partners to facilitate initiatives that promote compatibility between different digital identity regimes.

 

Building trusted company identities for the world

 

Current Know-Your-Business (KYB) and KYC processes across countries typically require companies to manually submit organisational information and documents. This is a major pain point for banks and other services as it can take as long as three months to complete their due diligence in electronic KYB/KYC of overseas companies.

 

Through interoperability of digital identities and business information, a Singapore company could, in future, register the company overseas or open a new corporate bank account in a DEA partner country via its CorpPass.

 


Found in DEPA, SADEA

 

6-E-Invoicing

E-invoicing is the automated creation, exchange and processing of requests for payment between suppliers and buyers using a structured digital format. The DEAs enable interoperability of e-invoicing systems between countries, allowing an e-invoice generated in Singapore to be accepted directly by another country’s e-invoice system. Businesses can enjoy shorter invoice processing time and potentially faster payment, leading to significant cost savings from not having to generate and track physical invoices.

 

Companies can participate in the Nationwide E-Invoicing Network by adopting Peppol-ready e-invoicing solutions and will be able to transact with their overseas partners seamlessly. In addition, SMEs can come on board through the SMEs Go Digital programme, where they can adopt Peppol ready e-invoicing solutions and receive grant support.

 

To find out more about the Nationwide E-Invoicing Network, please click here.

To find out more about SMEs Go Digital Programme, please click here

 

Found in DEPA, SADEA

 

7-Fintech and E-payments

 

 

 

E-payments provide a convenient alternative to cash and cheques as payment modes. They offer consumers a swift and efficient way to pay, helping businesses to enhance productivity. The DEAs enable interoperability of payment systems and promote acceptance of e-payment solutions provided by non-bank players.

 

Businesses will benefit from the increased ease and acceptance of digital payments, which will lead to faster payments, reduced transaction costs and enhanced trade. Businesses will also find it easier to navigate the payment regulations of foreign markets if they are compatible with Singapore’s, which will generate opportunities for our e-payment start-ups and players.

 

Found in DEPA, SADEA

 

8-Open Government Data

 

Businesses can also look forward to tapping on more publicly accessible government data as we explore ways to expand access to open government data to generate new opportunities for businesses. An example would be jointly identifying sectors where open data sets can be used to facilitate business innovation.

 

Found in DEPA, SADEA

 

9-Paperless Trade

 

 

Connecting National Single Windows: When established, a seamless, trusted and secure connection with our partners’ Single Window systems will enable businesses to digitally exchange trade data and reduce the time and cost of doing business. This allows data to be reused, improving the efficiency of business operations when preparing trade documentations for both commercial and regulatory purposes. The digital exchange of trade data also improves data accuracy as compared to the need for multiple data entries using manual documents. 

 

Electronic Trade Documents: Using electronic trade documents for customs clearances (e.g. e-Certificate of Origin, e-SPS certification, etc.) helps reduce the costs of handling paper documents. It also reduces the waiting time for trade documents that are required at the destination, and it would also be possible to use technology to assure document authenticity and provenance, which improves the efficiency of the trade process.

 

TradeTrust: The DEAs provide a platform to collaborate on promoting and developing data exchange systems that facilitate paperless trading. Such data exchange systems will bring about benefits like a more efficient and secure trading environment for our businesses and trading partners. TradeTrust is a multi-lateral, standards-based framework that enables solutions to inter-operate with one another. Studies have shown that paper processing costs in international trade can be up to as much as 20% of the cost of moving the goods.



Speed up international trade by doing away with paper

 

According to Maersk and IBM’s Paper Trail Research, the costs of processing paper trade documents can add up to as much as 20% of the cost of moving the goods, with the shipment taking about 34 days from farm to retailers, including a 10-day waiting time for documents to be processed. Digitalised trade documentation flows will help to reduce the costs of handling paper and waiting time for trade documents that are required at the destination.

 

A Singapore exporter can simply apply for an e-Certificate of Origin and e-SPS certificate for his shipment of products through TradeNet. These trade documents will be sent electronically through the National Single Window to the Customs and relevant authorities of the end-destination country. The exporter need not fill in physical forms or present hardcopies of the trade documents at the border.

 

 

Found in DEPA, SADEA

 

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