New double tax convention between Singapore and France: when does the withholding tax apply to French companies for services performed in Singapore?

A foreign company providing services - including consulting services, software or web development services, cloud services, etc. to a company based in Singapore (i.e. a Singapore company or a foreign company with a permanent establishment in Singapore) is in principle subject to a withholding tax of 15% in Singapore. (1)

This withholding tax applies if the service is performed by the foreign company in Singapore. If the service is performed outside of Singapore, and the resulting work product is then sent to Singapore or made available to a Singapore company, then no withholding tax applies.

The withholding tax may be reduced, or even avoided if there is a tax treaty between Singapore and the country of the company providing services.

Singapore has signed several such double taxation avoidance conventions with foreign countries, including France.

A new convention for the avoidance of double taxation between Singapore and France entered into force on 1st June 2016, replacing the previous convention dated 9 September 1974. (2)

For example, for French IT companies providing services to Singapore companies, the application of the double taxation avoidance convention means that, provided that the French service company does not have a permanent establishment in Singapore (as defined in article 5 of the Convention), then the full revenue earned and invoiced by the French service company will be taxed in France and Singapore shall not tax this revenue. The Singapore company paying fees to the French company will not have to apply withholding tax, provided these conditions are met. (3)

Singapore is an important trading partner for France and a growing number of French companies choose Singapore, often as a hub and a gateway to the ASEAN market, to develop their activity into Asia. The renewal of this double tax convention between the two countries should be an incentive for bilateral business relationships to further develop and thrive.

For any specific questions about tax, withholding tax, VAT or GST, we recommend to consult a tax lawyer.


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Note: in this short article, we focus on service companies and withholding tax. However, the Convention encompasses many more tax issues, not addressed here.

(1) The applicable rate depends on the service provided and nature of payment. For more details, check the Inland Revenue Authority of Singapore at www.iras.gov.sg

(2) Convention between the Government of the Republic of Singapore and the Government of the French Republic for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, concluded on 15 January 2015 and entered into force on 1st June 2016. The previous convention was concluded on 9 September 1974 and entered into force on 1st August 1975.

(3) See article 7 §1 of the Convention (“Business Profits”)


Bénédicte DELEPORTE
Avocat

Deleporte Wentz Avocat
www.dwavocat.com

June 2016

Legal requirements applicable to importing or exporting encryption software and equipment in/from France

Cryptography is part of our daily digital life: from online communication, through e-commerce, to online banking. Encryption ensures secure data transfers and storage, with data confidentiality, authentication requirements and data integrity. However, data encryption is used in very diverse situations, whether for civil or for military purposes, for legal but also for illegal purposes.

In France, although the Digital Economy Act (“Loi pour la confiance dans l’économie numérique”, aka “LCEN”) of 21 June 2004 introduced more flexibility for the use and supply of means of cryptography, importing or exporting encryption software or services in or from France remains regulated. (1)

The law distinguishes between the use and provision (including transfer, import and export) of means of cryptography and the provision of cryptography services. Means of cryptography are usually classified a dual use encryption products, i.e. technologies which can be used for both civil and military purposes. The provision of means of cryptography and of cryptography services remains regulated, even if certain areas are now exempted from any form of declaration or authorisation.


1. The provision of means of cryptography

The law defines “means of cryptography” as follows: “a means of cryptography (moyen de cryptologie) includes any hardware or software designed or modified to alter data, whether information or signals, through secret conventions (keys or encryption algorithms) or to proceed to the reverse operation with or without a secret convention. The main purpose of such means of cryptography is to safeguard the security of data storage or of data transmission to ensure its confidentiality, authentication or integrity check.” (art 29 of the Digital Economy Act)

The law states the general principle of freedom to use means of cryptography.

The law distinguishes between:
    - the provision of means of cryptography ensuring exclusively functions of authentication and integrity checks. Such means may be provided without restriction, including if the means of cryptography are exported to or imported from an EU member state or to/from third countries; and
    - the provision of means of cryptography not ensuring exclusively functions of authentication and integrity checks (including means ensuring data confidentiality). The provision of such means and their import is subject to a prior declaration to, or authorisation from ANSSI (Agence nationale de la sécurité des systèmes d’information - the government agency in charge of cybersecurity).

Declarations are acknowledged within one month from submission to ANSSI, and within four months for requests for authorisation. These timeframes may be extended if the submitted file is incomplete or if ANSSI has additional questions on the filing.

Declarations of means of cryptography are also valid for the intermediaries of the supplier (party having filed the declaration), i.e. the distributors of the means of cryptography. A single declaration is therefore sufficient and can be used by the supplier’s distributors.

The provision and export of means of cryptography not ensuring exclusively functions of authentication and integrity checks is subject to an authorisation from ANSSI filed by the supplier of the means of cryptography and to an export license from SBDU (Service des Biens Double Usage) filed by the party exporting the means of cryptography. (2)

Authorisations are granted for a maximum term of five years, at the end of which, a new request must be filed.

Certain categories of means of cryptography may be exempted from prior declaration if their technical characteristics or conditions of use are such that their provision, transfer from a member state or import doesn’t challenge the interests of national defense or of the internal and external security of the State. These categories are identified by decree. They include the provision of equipment to the public, the provision of broadcasting or television equipment, mobile radio communication, mobile telephone equipment which cryptographic coding or encryption is not accessible by the user. The provision of cryptography services not consisting in delivering electronic certificates is also unrestricted. (3)

The Prime Minister can prohibit the release and distribution of a supplier which does not comply with the requirements listed under article 30 of the Digital Economy Act (i.e. prior declaration or request for authorisation). Such prohibition would also include the distributors of the means of cryptography and the equipment used with the means of cryptography.

Suppliers not complying with the prior declaration or request for authorisation requirements may incur criminal penalties, including a maximum fine of €15,000 and one year imprisonment.

Exporting a means of cryptography without the required authorisation is subject to a maximum fine of €30,000 and two years imprisonment.


2. The provision of cryptography services

The law defines “cryptography services” as follows: “a cryptography service (prestation de cryptologie) includes any process used to implement a means of cryptography, on behalf of a third party.” (art 29 of the Digital Economy Act)

The provision of cryptography services must be declared to ANSSI. The exemptions to such declaration are similar to the exemptions for means of cryptography (see above).

The entities providing cryptography services are subject to a duty of professional secrecy (“secret professionnel”). Professional secrecy is defined in article 226-13 of the French criminal code, which provides that “the disclosure of secret information by a person who is entrusted either because of his status or his profession, because of a function or a temporary mission, is subject to one year imprisonment and a maximum fine of €15,000.”

These entities are fully liable for damages caused to the entity or person on behalf of whom they manage the secret conventions in case of breach of the integrity, confidentiality or availability of the encrypted data.

The entities providing electronic certificates are liable for the damages caused to the persons who relied on the certificates presented as “qualified” (art. 33 of the Digital Economy Act). These entities must contract an insurance policy sufficient to cover the risks related to their activity.

Pursuant to article 31 of the French Digital Economy Act, the provision of cryptography services for confidentiality purposes without the required prior declaration is subject to two years imprisonment and a maximum fine of €30,000.


Importing or exporting encryption software or services in/from France remains a complex matter. The supplier must first check whether the means or service is exempted or subject to a regulatory prior declaration or authorisation from ANSSI, then take into account the delays in obtaining a declaration certificate or an authorisation to distribute the software or application, or to provide a cryptography service. Suppliers or importers who breach these legal requirements may incur severe criminal charges.

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(1) Loi n°2004-575 pour la confiance dans l’économie numérique, 21 June 2004 - LCEN (French Digital Economy Act). The provisions regarding cryptography are enacted under articles 29 et seq.

(2) The supplier filing a declaration or requesting an authorisation must submit a file to ANSSI. The format and content of the file are listed in an administrative ruling (Arrêté) dated 29 January 2015

(3) Decree No 2007-663 dated 2 May 2007

Bénédicte DELEPORTE
Avocat

Deleporte Wentz Avocat
www.dwavocat.com

April 2016

Software license audits challenged in French court

Software vendors (licensors) have increased the number of software license audits over the past few years to chase intellectual property infringement through illegal use of software. Infringing users (licensees) are required to pay additional licensing fees or else they will be sued. Even if the user is duly licensed to use the software, only limited rights are granted by the licensors. The purpose of license audits is to ensure that the licensee complies with the rights granted by contract.

However, licensees tend to challenge software license audits more often. Their claims are often legitimate: increased complexity of the license agreements, difficulty for the licensees to keep track of the licensing rights actually used, or even bad faith by certain vendors who would threat to launch an audit to pressurize the client at the time of contract renewal.

The amounts at stake are usually quite high for both parties, vendors and licensees.

Two recent French cases, both involving Oracle Corporation, illustrate the tension between vendors and licensees, especially at the time of renewing - or not - the existing licenses. (1) These cases raise the issue of the purpose, scope and limitations of a software license audit, and of the legal grounds on which a case may be brought when challenging the non-compliance between the rights granted and actual software use.


1. Purpose, scope and limitations of a software license audit

Software is protected by intellectual property law. (2) The author, or software publisher, enjoys exclusive rights over his/its work and is free to decide how to distribute it, including the scope of the rights granted and the licensing fees charged.

The rights granted to the licensees are provided in the software license agreement. The scope of the rights granted is different depending on the vendors. The licensing rights can be limited according to the type or number of terminals, or servers, number of named users or of CPUs, user volume, etc. Limitations can also be territorial, per location, facility, country or region.

Each vendor is also free to set its own fee system: through the payment of a one-time licensing fee, through a recurring subscription assessed according to the number of terminals or user volume, or through fees evolving with the software (upgrades), etc.

To ensure that the software is used in accordance with the rights granted, software vendors usually include software license audit clauses in their contracts.

However, one of the fundamental principles of civil law is that contracts must be performed in good faith (art. 1134 of the French civil code). Under this principle, software audits must not be carried out for a purpose other than the original objective or be used as a threat against the licensee at the time of renewing the contract, in order to put financial and operational pressure on the licensee or to overreach and access licensee’s proprietary confidential data.

Both examples were raised in the cases examined here.

- The Oracle vs. Carrefour judgment of 12 June 2014 (Summary judgment)
In this first case, Oracle sued Carrefour after the latter had resisted Oracle’s request to run its data collection scripts on Carrefour’s systems during the software audit process.

Two Carrefour affiliates, Carrefour SA and Carrefour Organisation et Systèmes Groupe had entered into a framework license agreement to use the Oracle Database Management software. On 27 January 2012, after the agreement had expired, Oracle France notified Carrefour its decision to conduct a software license audit to check the compliance of the software used with the rights granted under the license agreement. The notification included a request to run scripts allowing to assess the number of licenses used and to check the documents provided by Carrefour regarding the use of the software.

Carrefour didn’t resist the audit but refused the process imposed by Oracle, i.e. to run Oracle’s auditing tools. Carrefour considered that the scripts used by Oracle gave them access to Carrefour confidential information, which was unnecessary for the purpose of the audit and which imposed a security risk on its IT systems.

In a summary judgment rendered on 12 June 2014, the Civil court of Nanterre (Tribunal de grande instance de Nanterre) held that Oracle could not compel Carrefour to run Oracle’s scripts to collect data for the audit since this process was not imposed by the agreement nor by law.

The judges held that Oracle did however justify a legitimate reason to be granted an expert assessment to establish evidence of potential contractual breaches and intellectual property violations by the defendants. On the other hand, Carrefour was not compelled to run Oracle’s data collection scripts, but the judges confirmed that Oracle could use all necessary data collected during the expert assessment to check Carrefour’s compliance of the use of the software programs with the licenses granted.

- The Oracle vs. AFPA decision of 6 November 2014
In a second case opposing Oracle to the AFPA (Adult professional training association) before the Civil court of Paris (Tribunal de grande instance de Paris), the AFPA claimed that Oracle had overreached its software auditing right to put pressure on them at the time of their license renewal with the intent to limit competition and to abuse its right to bring legal action against the AFPA if they didn’t renew the licenses.

The AFPA claimed that Oracle was using their audit right abusively “by distorting its purpose” to put pressure on the AFPA to deter them to migrate to a competitor’s software at the time of the license renewal. This method allegedly resulted in limiting competition (per art. L.420-2 of the commercial code) on the SGF and RDBMS solutions markets.

The judges were not convinced by the AFPA’s claim regarding an abuse of dominant position by Oracle, as they considered that in this case, Oracle’s dominant position on the RDBMS market was not ascertained.

Regarding the abuse to bring legal action, the judges recalled that engaging legal proceedings is a right. If this right is used abusively, then the claimants must prove that a fault was committed, under article 1382 of the civil code (fault, damages and causality between the fault and the damages suffered).

However, although Oracle threatened the AFPA to launch an audit at the time of license renewal, in the present case, the AFPA didn’t demonstrate having suffered specific damages, other than the cost incurred in this legal procedure.


2. Characterizing an alleged non-compliance to the license: intellectual property infringement or contractual breach?

The case opposing Oracle to the AFPA raised a second interesting legal issue regarding the characterization of the dispute over the alleged non-compliance to the software license.

- The facts
Oracle distributes an ERP solution called Oracle E-Business Suite, comprising over 70 software application programs dedicated to enterprise management and clustered into “suites” (“Financials” for accounting and finance software, “Procurement” for purchasing management and suppliers).

Unlike most enterprise software, the E-Business Suite licensing system doesn’t work with activation keys used to manage licenses (blocking and unblocking access to the software, managing the license term, etc.), but instead is delivered on a CD which includes all the programs. The client or its service consultant is then responsible for the installation of the licensed programs on the client’s systems.

Following an RFP launched in September 2001, the AFPA executed an agreement with Sopra Group (an Oracle distributor and consulting company) for the provision of the Oracle E-Business Suite - Finance, for an initial group of 475 users.

In July 2008, Oracle France notified the AFPA its decision to carry out a software audit. The audit was actually conducted in May/June 2009, when the AFPA launched a new RFP to roll out the Procurement solution. According to the audit results, the AFPA was using 885 Purchasing software licenses. This software program was part of the Procurement suite, which was not included in the license granted.

After failing to settle the matter amicably, Oracle decided to bring an action against the AFPA on the grounds of counterfeiting based on the unauthorized use of the Purchasing software suite. To this effect, Oracle claimed the AFPA (and Sopra Group, under the contractual indemnification terms) to pay 3,920,550 euros as lump sum indemnification for the unauthorized copy and use of the Purchasing software for 885 named users, plus 9,487,731 euros as indemnification for the unauthorized use of the technical support services and Purchasing software upgrades, i.e. a total of 13,408,281 euros.

The defendants claimed that Oracle knew that the Purchasing software suite was part of the solution proposed by Sopra to the AFPA under the contract, the solution having been approved with the purchase order issued by Oracle. Indeed, Sopra had invoiced the AFPA for the installation, use and support services for the Purchasing program. The AFPA also claimed that they had been using Purchasing in good faith since the beginning of the contract term and that they had committed no breach.

- Disagreement over the legal qualification of the audit conclusions
In this case, the parties’ claims were based on conflicting legal characterizations resulting in  distinct legal consequences: intellectual property infringement vs. breach of contract

Oracle claimed that since the AFPA wasn’t authorized to use the software under dispute, they were infringing (counterfeiting) Oracle’s intellectual property rights. Counterfeiting is a continuing offense, not subject to prescription, and the counterfeiter cannot claim good faith.

Contrary to Oracle, the AFPA claimed that this was a contractual issue. According to the AFPA, the Purchasing suite was included in Oracle’s licensed software programs. If not, the AFPA claimed that they had performed the contract in good faith since the software programs had been installed by Sopra. Contractual claims are prescribed after 5 years (art. 2224 of the French civil code). Indemnification is governed by the rules regarding contract performance set forth in the Civil code.

- The Court decision
To characterize the dispute, the judges recalled that the only existing issue between the parties was whether the license included the Purchasing suite. Oracle never claimed that the AFPA had used counterfeit software or rolled out software not supplied by Sopra, or that the number of licenses did not correspond to the number of users. The judges therefore held that the dispute was only focusing on the scope and performance of the contract and not on a counterfeiting issue. Therefore, the 5 year statute of limitation and contractual indemnification rules applicable to the damage suffered as outlined in the French civil code are applicable.

Regarding the performance of the contract, Oracle had delivered four CDs, including one containing the Oracle Applications/E Business Suite II i solution, with the Financial and Purchasing suites. Oracle’s position was that although the Purchasing software was on the CD, it was not included in the license.

Based on the documents disclosed during the proceedings, the judges held that Oracle maintained doubt and confusion on what was really included in the software solution licensed: either the Purchasing software program wasn’t included in the scope of the AFPA license, and then it shouldn’t have been delivered to them, or it was included in the license since it was actually delivered in execution of the purchase order.

The judges decided that the AFPA used the Purchasing software suite without fault since this program had been included in the CDs prepared by Oracle. Oracle must have always understood and admitted that the license included the use of that software suite.

As a consequence of this legal characterization, the judges held that the AFPA didn’t infringe Oracle’s intellectual property rights since the software was presumably included within the contractual scope of the license. The judges therefore decided that Oracle’s claims against the AFPA were prescribed and Oracle’s claims of 13,408,281 euros were unfounded. In addition, Oracle had to pay procedural fees to the AFPA and to Sopra amounting to 100,000 euros (art. 700 of the procedural code). This decision is pending appeal.


    Based on this case law, software license audits are indeed legitimate tools for vendors to check that the licenses are performed within the contractual boundaries. However, audits should not be used outside and beyond their original purpose. As shown with these two cases, given the amounts claimed by the vendors, users no longer hesitate to challenge such practice, claiming bad faith or abuse from the vendors (although such claims much be proved legally). Another potentially valid claim could be the complexity of certain types of licensing rights which can be extremely difficult for licensees to manage effectively.

Although these cases didn’t raise the issue of license complexities, but were brought essentially because of misunderstandings and communication issues between the parties, we recommend that software vendors ensure that licensing rights are set forth in clear terms and that licensees can easily keep track of the rights used.


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(1) Nanterre civil court of first instance (Tribunal de grande instance de Nanterre), summary judgment, 12 June 2014, Oracle Corp., Oracle International Corp., Oracle France vs. Carrefour, Carrefour Organisation et Systèmes Groupe ; Paris civil court of first instance (Tribunal de grande instance de Paris) 6 November 2014, Oracle Corp., Oracle International Corp., Oracle France vs. Association Nationale pour la Formation Professionnelle des Adultes (AFPA) & Sopra Group

(2) Article L.112-2 of the Intellectual property code

 

Bénédicte DELEPORTE
Avocat

Deleporte Wentz Avocat
www.dwavocat.com

December 2015

Drone use regulation: legal perspectives from France and Singapore

 

In January 2014, an 18 year-old used a drone (or unmanned aircraft system - UAS) equipped with a GoPro camera to fly over and record a video of the city of Nancy, in eastern France. He then posted his video on the internet. The video received more than 400,000 views! Unfortunately, this young man didn’t realize that the use of a drone with a camera over a populated area is regulated in France.

The video was identified by the authorities, who contacted the young man. The regional department of civil aviation (Direction régionale de l’aviation civile - DRAC) notified the rules applicable to the use of a UAS and required him to get all necessary authorizations. The young man was then subpoenaed before the criminal court for endangering third parties’ lives.(1)

A few weeks before in the US, Amazon had announced its drone delivery project, engaging a battle on flight regulation and safety with the Federal Aviation Administration (FAA).(2)

Earlier this month in Singapore, SingPost announced the first 2km test flight using an unmanned aircraft to deliver mail and a small parcel to an identified recipient.(3)

Although the drone market is developing fast not only in Europe, but in many other regions in the world, there are still few drone-specific laws regulating their use and the level of skills requested to operate these aircrafts. Issues with public safety and privacy are also surfacing with the increasing use of drones. France was the first country to issue a regulatory framework for the use of civilian drones in 2012. Singapore enacted its own drones regulation in May this year.

In this article, we review the issues of public safety and privacy, followed by the French and new Singapore UAS regulations.


1. The development of drone use: public safety and privacy concerns

Drones are commonly defined as aircrafts without on-board pilots that are operated by remote control or with a smartphone.

There are many types of drones, from lightweight devices of a few hundred grams with limited flight radius and battery life, usually used for recreational activities, to larger, professional, aircrafts which can weigh up to a few hundred kilos and are able to fly long distances at high altitudes (several hundred meters).

Drones can be equipped with photo or video cameras, temperature or air sensors, or be used to launch pesticides or other types of loads.

Unmanned aircrafts have been used for many years for a wide variety of purposes, including for public safety (surveillance of demonstrations in public areas, firefighting, securing areas after industrial accidents - such as the Fukushima nuclear disaster -, monitoring infrastructures and buildings, filming or for recreational purposes). New uses are also emerging, such as parcel or medication delivery in emergency situations or to remote areas, or simply to cut costs.

The use of civil drones has soared in recent years, with a whole new market open to consumers. However, their use raises a number of legal issues in areas such as public safety and privacy.

    - Public safety : uncontrolled use of drones can interfere with other categories of aircrafts, such as ultralights, helicopters and airplanes at take-off and landing. No actual accidents have been reported so far, but several drones have been reported flying around airports, in restricted areas, in the past months.

A drone flying over a crowded area may crash down and injure people in the public. And one cannot ignore the possibility of using drones for illegal or terrorist activities. In 2014, drones were detected flying over nuclear plants and military facilities in France and over the presidential Elysée palace in Paris. In January 2015, a drone landed on the lawn in front of the White House in Washington DC.

Although these areas are no-flight zones, the operators are seldom identified and it is hard to know whether these incidents were merely provocative, or test cases for future attacks.

Patrick Ky, Executive director of the European Aviation Safety Agency (AESA) has expressed concerns regarding the use of drones in Europe and the increasing number of incidents. After collating the comments of a public consultation closed a few days ago, AESA should publish a “technical opinion” by the end of 2015. This document should then be used as preliminary work for a future regulation of drones under 25kgs (currently, AESA is only comptent for aircrafts above 150kgs).(4)

    - Privacy : drones can be used to invade one’s privacy if equipped with high performance cameras or video recorders, challenging the right to privacy and personal data protection.

Right to privacy
French law has a strict regulation regarding the right to privacy, whether one is an “anonymous” person or a celebrity. In theory, the publication of photographs taken with a photo camera placed on a drone is subject to the prior consent of the person concerned. However, consent is usually impossible to collect when using a drone.

The right to privacy is waived when people are in a public setting (e.g. attending a concert, a tennis or a football game) and when the photograph or the video doesn’t focus on a single person, but is a global photograph of the public, is not degrading and is within the scope of the right to inform the public. Unless these general principles are applied, the person appearing on a photograph or a video made via a drone may sue the aircraft operator (or the company employing the operator) for violating his/her right to privacy.

So far, Singapore has no laws regulating the use of drones invading people’s personal spaces (such as a drone video-recording a person in his/her garden or at a private party without that person’s knowledge).

Personal data regulation
The act of taking a photograph or a video of a given person is deemed personal data collection under French and European personal data regulation. Under French law, personal data treatments, i.e. the collection of data relating to a natural person, who is either identified or identifiable, must be filed with the French data commission (“Commission de l’informatique et des libertés” or CNIL). Such data treatment is subject to the French data protection law (Loi informatique et libertés).(5)

Drone use was unforeseen when the French data protection law was first enacted in 1978, and again with the European directive of 1995. Applying these legal requirements to the use of drones is therefore quite problematic. However, the European data protection authorities are starting to tackle this issue: the French CNIL has been working on the issue of drones and privacy since 2012 and last June the European G29 working group issued a list of recommendations on this topic.(6)

The recent Singapore Personal Data Protection Act doesn’t provide any drone-specific provisions either.(7) The Personal Data Protection Act requires the subject’s consent before taking photographs or a video for commercial use. However, this applies to private space only and not public space.

The use of drones for civil purposes is not prohibited but is beginning to be regulated.


2. French law and the use of civil drones in the airspace

France was the first country to issue specific regulation for the use of unmanned aircrafts. Two administrative orders (“arrêtés”) were published on 11 April 2012 relating respectively to the design, use and capacity required to operate such devices, and to the use of the airspace by unmanned aircrafts.(8)

These two complementary texts have a common purpose: to guarantee public safety. They classify unmanned aircrafts in different categories, define the types of authorized activities, and provide rules regarding the use of the airspace based on the different purposes for operating unmanned aircrafts.

Although these rules don’t solve all the legal issues raised by the use of drones, they provide a useful framework for the companies designing and distributing new aircraft models and for users to operate the drones within the legal boundaries.

Civil drones are classified (categories A to G) according to weight, type of propulsion, limitations, and types of activities contemplated. The resulting obligations depend upon the proposed use of the drone: speed, altitude (in-sight flights or out-of-sight flights), zones flown over and purpose.

Only category A aircrafts, i.e. drones weighing less than 25kgs, with a single propulsion system, without a camera and only flying in-sight are exempted from the airworthiness document and are therefore authorized to fly without any restrictions regarding the capacity of their operator.

All other unmanned aircraft categories are subject to a preliminary authorization issued by the Minister in charge of civil aviation, and to the following requirements: the installation of specific devices to allow the operator to monitor the altitude of the aircraft and a fail-crash system for forced landing, a minimum skill level of the operator and the possession of specific documents (user and maintenance manuals, airworthiness document, etc.).

Finally, the operator of an unmanned aircraft is responsible for implementing all necessary safety procedures to ensure third party safety and for complying with all applicable regulations.

Using a drone outside of these legal boundaries is subject to criminal penalties set forth in the French Code of transport, the Code of civil aviation and the Criminal code. For example, using an unmanned aircraft without the required airworthiness documents or with expired documents, or if the drone does not comply with the technical airworthiness document or with the general safety rules is subject to one year prison term and/or a fine of €75,000.(9)


3. The new Singapore Unmanned Aircraft Act

Drones are also becoming very popular in Singapore and the same concerns regarding public safety and privacy are being raised. Several incidents involving drones were reported in the past 12 months, including drones crashing on the MRT (metro) tracks and drones seen flying over prohibited or restricted zones.

Singapore enacted the Unmanned Aircraft (Public Safety and Security) Act 2015 in May, with an aim to clarify the rules regarding drone use. The unmanned aircraft act amended the existing Air Navigation and Public Order Acts.

Permits are required for drones used for professional or commercial purposes, usually equipped with a photo or a video camera, as well as for drones weighing more than 7kgs and drones to be flown over sensitive or restricted areas (“protected areas”).

Unmanned aircrafts used for recreational or private purposes and weighing less than 7kgs are exempted.

Two types of permits, an operator permit and an activity permit, are required for operating drones weighing more than 7kgs, for any purpose (private or professional), and for operating drones for commercial purposes regardless of the weight. An activity permit is required to operate an unmanned aircraft in a restricted area, or within 5kms of a military base.

A list of security-sensitive areas (special outdoors events, certain public facilities and government buildings, the Istana Presidential palace, military bases, etc.) is to be published.

Permits are issued by the Civil Aviation Authority of Singapore (CAAS).

Using a drone illegally in Singapore is subject to a fine of S$20,000 and/or one year prison term. However, if the drone carries dangerous materials (such as weapons or hazardous chemicals), the operator or the owner is subject to a fine of S$100,000 and/or five years prison term.

     Despite the growing interest of both the public and businesses in using drones for recreational purposes but also for more and more diverse commercial purposes, such as short distance delivery, there is no European or international concerted approach on drone use regulation (and on the related issues of privacy and personal data protection). A number of countries (including the United States and Japan) are beginning to regulate the use of drones, limiting or prohibiting their use. We may see a first effort at producing regional rules with the latest position of the European Aviation Safety Agency on this matter, and increased pressure from the commercial airline pilots.

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(1) “Poursuivi en justice pour avoir filmé Nancy avec un drone”, published on 13 February 2014 in le Figaro (http://etudiant.lefigaro.fr)

(2) “Amazon unveils futuristic plan: Delivery by drone”, published on 1st December 2013 on cbsnews.com

(3) “Mail sent to Pulau Ubin by drone in world-first SingPost trial”, published on 8 October 2015 on Channel NewsAsia (www.channelnewsasia.com)

(4) “Les drones volent n'importe où, n'importe comment en Europe" (AESA), published on 9 October 2015 in La Tribune (www.latribune.fr)

(5) French data protection law n°78-17 of 6 January 1978 referred to as “Loi informatique et libertés”. The law was amended in 2004 when the 1995 European directive on personal data protection was transposed into French law. The national data protection laws will be replaced by the future European data protection regulation, which should become effective by the end of 2015 and enforceable within 2 years thereafter.

(6) Article 29 Data Protection Working Party, Opinion 01/2015 on Privacy and Data Protection Issues relating to the Utilisation of Drones, 16 June 2015 (WP 231).

(7) Singapore Personal Data Protection Act (2012) ; see also the Personal Data Protection Commission of Singapore website, at www.pdpc.gov.sg

(8) Administrative order of 11 April 2012 regarding the use of the airspace by unmanned aircrafts (“Arrêté relatif à l’utilisation de l’espace aérien par les aéronefs qui circulent sans personne à bord”)  ; Administrative order of 11 April 2012 regarding the design of unmanned aircrafts, to the conditions of their use and to the required capacities of their operators (“Arrêté du 11 avril 2012 relatif à la conception des aéronefs civils qui circulent sans aucune personne à bord, aux conditions de leur emploi et sur les capacités requises des personnes qui les utilisent”) ; Articles R.133-1-2 and D.131-1 to D.133-10 of the French Code of civil aviation.

(9) Article L.6232-4 of the French Code of transport.


Bénédicte DELEPORTE
Avocat

Deleporte Wentz Avocat
www.dwavocat.com

October 2015