It’s 2018 and the digital tide is higher than ever.
And with an innovation undertow more forceful than ever before, swimming against the current of progress will inevitably get you pulled under… Digital transformation is, put simply, the only way to stay afloat in today’s digitized marketplace.
The good news? AssureSign®s one of the best lifeguards in the business… and enterprises like AAA and FireHouse Subs have found our digital transaction management—electronic signature—to be one heck of a life raft.
Yet, with a growing number of companies—ranging from large corporations to SMBs—using eSignature to digitize current processes and accelerate workflows, many wonder about the legality of using electronic signature (or digital signature) around the world…
“Electronic signatures and their legality will often come up when I speak with prospects. Fortunately, I can assure them that using AssureSign® enables them to send and receive documents for signature with nearly anyone in the world, both conveniently and legally.”
-Anna McDonald, Sales Manager for Nintex AssureSign®
The international coast guard may not be the experts on electronic signature law, so we’ve taken our eSign raft around to the world’s largest economies to define how eSignature can be used in the countries and jurisdictions where you do business.
Key Terms: eSignatures and Laws
Before we dive in, here are some key terms you’ll need to know or can reference back to.
It’s important to note that “virtual signatures,” is terminology purposed with grouping the different types of signatures rendered via a computerized program, software or device.
Types of virtual signatures:
- Electronic signatures: First, let’s answer the obvious… “What is electronic signature?” Most commonly, electronic signatures refer to a “sound, symbol or process” logically associated with (1) a document or set of documents and (2) a party’s consent or agreement to the document’s content. An electronic signature can range from capturing a traditional longhand signature on a digital device to an “I accept” or “complete checkout” button.
- Digital signatures (also referred to as qualified, certified, or advanced signatures): Digital signatures differ from their “electronic” counterparts in that they require all signing parties to obtain and use a valid digital certificate. A digital certificate (1) utilizes public key infrastructure; (2) unambiguously identifies its owner; and (3) can only be obtained from a certificate authority (CA).
Types of virtual signature laws:
- Permissive/Minimalist: Jurisdictions like the U.S. and Canada observe “permissive” or “minimalist” electronic signature law. This means all types of virtual signatures (electronic, digital, etc.) are legal, enforceable, and are considered equal.
- Tiered: In jurisdictions with “tiered” regulation—like the European Union (EU)—all virtual signatures are considered legal (unless stated otherwise). However, the law grants greater evidentiary weight to a digital signature (a.k.a. qualified, certified, or advanced) than it does an electronic signature. Businesses are free to use the type of signature they prefer, but digital signatures are likely more ideal for highly sensitive documents. The level of difference between the two types of signatures is highly dependent on the jurisdiction. Further, many jurisdictions with a tiered infrastructure subscribe to the United Nations Commission on International Trade Law (UNCITRAL) model law, which provides recommendations on the regulation and use of virtual signatures.
- Prescriptive: Jurisdictions with “prescriptive” regulations have unique law that govern the use of virtual signatures. Many times, language regarding basic electronic signatures is either absent from the law entirely or explicitly denied legal standing within the jurisdiction. Additionally, these countries may regulate which signature vendors or certificate authorities may be chosen if the signature is to be considered legal.
Where can I digitize the dotted line?
So, where will eSignature take you? Here’s what we know about the world’s 30 largest economies:
Permissive/Minimalist Electronic Signature Laws
Australia (Electronic Transactions Act of 1999)
Australia’s Electronic Transactions Act is similar to the U.S. UETA (1999) and ESIGN Act (2000). It recognizes any virtual signature as legal and enforceable when a signature is required. Electronic signatures and digital signatures are synonymous in terms of their legality. Australia does not permit virtual signatures for documents related to migration or citizenship. Some regions do not allow virtual signatures for power of attorney (POA), will documents, and some real estate transactions.
Canada, like Australia and the U.S., allow for both electronic signatures and digital signatures to fulfil a signature requirement. As long as both signing parties consent to conduct business electronically, virtual signatures are considered valid unless a party can prove otherwise. Some minor nuances exist in the electronic signature law among the provinces. Canada does not permit virtual signatures for some real estate agreements, wills, estate agreements, POAs.
New Zealand (Electronic Transactions Act)
All parties may freely agree to conduct business electronically. While all virtual signatures are considered equal, all signing parties must agree on the type that will used. New Zealand does not explicitly prohibit virtual signatures for any type of transaction, though real estate, wills, and other sensitive agreements have additional requirements.
In Thailand, a virtual signature is referred to as a “data message,” which is held as equally valid to that of a hand-written signature. All “data messages” are presumed to be valid unless proven otherwise. Thailand does not explicitly prohibit any documents from being signed via an electronic or digital signature.
Thanks to the UETA and ESIGN Act, electronic signatures and digital signatures are considered equal, valid, and 100% legal in the eyes of the reigning electronic signature law. All parties must consent to conducting business electronically. According to the United States electronic signature laws, virtual signatures for real estate transfers, wills, and some legally required notices to consumers are not permitted.
Tiered electronic signature laws
Argentina (Digital Signature Law 25, 506)
Argentina law subscribes to the tiered method of legalizing virtual signatures we described above. Additionally, the laws pertinent to virtual signatures in Argentina are parallel to UNCITRAL model law. Under Argentina’s tiered infrastructure, electronic signatures are considered legal and enforceable, but digital signatures (a.k.a. qualified, certified, or advanced signatures) are considered to have greater evidentiary weight. Civil Code, Section 1197 binds all parties to an agreement after they consent to conducting business electronically. Argentina does not permit virtual signatures for documents regarding death, family law, or “other highly personal matters.”
Bermuda (Electronic Transactions Act of 1999)
Bermuda law subscribes to a tiered method of legalizing virtual signatures, permitting both electronic and digital signatures. Electronic signatures are automatically considered valid unless proof to the contrary is presented. Bermuda does not permit virtual signatures for some real estate agreements and wills.
Chile law subscribes to a tiered method of legalizing virtual signatures, permitting both electronic and digital signatures. Electronic signatures are automatically considered valid unless proof to the contrary is presented. Chile does not permit virtual signatures for matters related to family law or for acts and contracts where the law requires attendance of one or more of the parties.
Regulations pertinent to electronic signature law in China model a combination of EU’s directive, UNCITRAL model law, and the United Nations Convention on Electronic Communications in International Contracts. Law subscribes to a tiered method of legalizing virtual signature, permitting both electronic and digital signatures. While electronic signatures are presumed valid unless proven otherwise, some judges have hesitated to honor their validity as the law demands. For this reason, it may be advisable to obtain longhand signatures for extremely sensitive documents. China does not permit virtual signatures for documents related to personal relationships (marriage, adoption, inheritance, etc.), some real estate agreements, or documents related to the suspension of public utilities
Colombia (Law 527 of 1999) (Law 962 of 2005-Electronic Invoice) (Law 964 of 2005- Electronic Securities) (Law 1150 of 2007- Public Procurement)
Columbia’s laws regarding virtual signatures are not clear cut. While technically a tiered model, court rulings have been somewhat ambiguous on defining the difference between electronic and digital signatures. Nevertheless, while a distinction between the two is not explicit, a Columbian Supreme Court decision on December 16, 2010 removed any doubt of electronic or digital signatures being recognized as valid, enforceable and legal signatures. Columbia does not permit virtual signatures for conveyance of real estate rights, aircraft, ships, corporations, or other business associations; bylaws; mortgage agreements; unlimited agency agreements; or incorporation of branches.
European Union (EU Member States) (Electronic Identification and Authentication Services Regulation (eIDAS))
The EU is very much a tiered jurisdiction. In fact, many of the modern tiered infrastructures model their regulation after that of their electronic signature law, eIDAS. The defining difference between the EU and other tiered jurisdictions is the existence of three definitive types of virtual signatures:
- Simple electronic signature (a.k.a. basic electronic signature or electronic signature): Data in electronic form (signatures) which are attached to or logically associated with other electronic data (documents, agreements, etc.) and which serve as a method of authentication. Must signal the signer’s intent to sign, be initiated by the signer, and appropriately associated with the document being signed
- Advanced electronic signature: Must meet the requirements of the Simple Electronic Signature in addition to being: (i) uniquely linked to the signer; (ii) capable of identifying a signer; (iii) created using eSignature creation data that the signer can, with a high level of confidence, use under his/her self control; and (iiii) enabled with detecting alterations to a document(s) after its completion.
- Qualified electronic signature: Qualified Electronic Signatures (QES) are parallel to digital signatures. However, the qualified digital certificate must be issued by a vendor (certificate authority) that meets the requirements of the eIDAS and that is accredited and supervised by designated authorities in the EU.
In the EU, all three types of virtual signature are considered legal and enforceable, although certain types of sensitive documents may require an advanced or qualified signature. Parties are free to choose the type of signature appropriate for the mode and sensitive nature of their business.
Hong Kong (Electronic Transactions Ordinance)
Hong Kong law subscribes to a tiered method of legalizing virtual signatures, permitting both electronic and digital signatures, and parallels UNCITRAL model law. In Hong Kong, all parties must consent to conducting business electronically. However, consent does not necessarily need to be explicit and may be inferred by a party’s action of electronically or digitally signing a document(s). Hong Kong does not permit virtual signatures for POAs, wills, government leases, or some real estate transactions.
India law subscribes to a tiered method of legalizing virtual signatures, permitting both electronic and digital signatures. Consent to conducting business electronically is not necessarily required, but is recommended. Additional technical and legal requirements exist when using digital signatures. India does not permit virtual signatures for POAs, wills, or real estate transactions. Further, some transactions require completion on officially stamped paper.
Japan law subscribes to a tiered method of legalizing virtual signatures, permitting both electronic and digital signatures. eSignatures are legal and enforceable in Japan; however, the use of “red seal stamps” are commonly used alongside signatures. It’s advised to refrain from using virtual signatures with documents related to real property transfers and wills.
Malaysia law subscribes to a tiered method of legalizing virtual signatures, permitting both electronic and digital signatures, and parallels UNCITRAL model law. While a court may request supporting evidence for electronic signatures falling below the standards of a “Qualified Electronic Signature” as defined in UNCITRAL, all virtual signatures are deemed permissible and legally binding in a court of law. Malaysia does not permit virtual signatures for the creation of wills, trusts, negotiable instruments, and other sensitive documents.
Mexico (Code of Commerce, Federal Civil Code, Federal Civil Code, Federal Code on Civil Procedures, and other laws contain amendments and provisions governing the use of virtual signatures)
Mexico law subscribes to a tiered method of legalizing virtual signatures, permitting both electronic and digital signatures. Mexico does not prohibit virtual signatures for any type of document, but may require certification of official documents and tax related documents to be completed with a digital signature.
Norway (Electronic Signatures Act of 2001)
Norway law subscribes to a tiered method of legalizing virtual signatures, permitting both electronic and digital signatures. Norway does not permit virtual signatures for debt certificates, per-marital agreements, or other select transactions.
Republic of Korea (Digital Signature Act)
The Republic of Korea subscribes to a tiered method of legalizing virtual signatures, permitting both electronic and digital signatures. All parties must consent to conducting business electronically. Further, if the consent, signer’s identity, or originality of the documents are questioned, then the validity of the signature must be determined by interpreting the party’s intent to sign in correlation with the context of the document(s). The Republic of Korea does not explicitly prohibit any specific type of document from being completed with virtual signatures.
Singapore (Electronic Transactions Act of 2010)
Singapore subscribes to a tiered method of legalizing virtual signatures, permitting both electronic and digital signatures. Per Singapore law, the type of virtual signature used must either be “(1) as reliable as appropriate for the purpose for which the electronic record was generated or communicated, or (2) proven in fact to have identified the signatory and to indicate signatory’s intention with respect to the information by itself or together with further evidence. Singapore does not permit virtual signatures for wills, negotiable instruments, POAs, or some real estate transactions.
South Africa subscribes to a tiered method of legalizing virtual signatures, permitting both electronic and digital signatures. All parties must consent to doing business electronically, but do not necessarily need to consent on the type of virtual signature used. No matter the type of virtual signature used, it must (1) identify the party and indicate their intent/approval and (2) be reliable and appropriate for the context and content of the document(s). South Africa does not permit virtual signatures for the execution, retention and presentation of wills; long-term leases; transfers of property; or bills of exchange.
Switzerland (Federal Law on Electronic Signatures)
Switzerland law subscribes to a tiered method of legalizing virtual signatures, permitting both electronic and digital signatures, and parallels UNCITRAL model law. Switzerland does not explicitly prohibit any specific type of document from being completed with virtual signatures, but caution should be exercised for documents related to real estate, forms requiring notary, wills, trusts, and other sensitive documents.
Taiwan (Electronic Signatures Act 2001-11-14)
Taiwan law subscribes to a tiered method of legalizing virtual signatures, permitting both electronic and digital signatures, and parallels UNCITRAL model law. Expressed consent is of particular importance in Taiwan. While Taiwan has not excluded any type of document from its laws governing virtual signatures, many government agencies have announced they will not accept documents that are electronically or digitally signed.
While now separate from the EU, the U.K. has enacted electronic signature law nearly identical to eIDAS through its Electronic Identification and Trust Services for Electronic Transactions Regulation (2016 No. 696) and Section 7 of its Electronic Communications Act (2000).
Prescriptive electronic signature laws
Brazil (Provisional Measure 2200-2)
Brazil follows the UNCITRAL model law, but only legally recognizes virtual signatures that utilize the Brazilian PKI. So long as the Brazilian PKI is used, all virtual signatures are considered legal and enforceable. Brazil does not explicitly prohibit any specific type of documents from being completed with a virtual signature.
Indonesia law only recognizes digital signatures using a digital certificate provider that’s registered with the country’s Ministry of Communication and Information Technology. Further, the digital signature vendor must have all its data centers and disaster recovery centers located within Indonesia’s borders. Indonesia does not permit virtual signatures for notarial deeds, letters of court summons, or bond certificates.
Israel (Electronic Signature Law 5761-2001)
Israel law will only legally recognize a “certified signature” (digital signature). Israel follows a similar model to the EU apart from recognizing basic electronic signatures on documents which require a signature. Israel does not explicitly prohibit any specific type of documents from being completed with a digital signature.
Peru (Digital Certificates and Signatures Law, Law No. 27269)
Peru only legally recognizes digital signatures issued with a digital certificate and vendor that meets the law’s specified minimum digital signature requirements. While Peru issues approved certification providers, it will legally recognize those outside its jurisdiction so long as it meets the same standards. Peru does not explicitly prohibit any specific type of documents from being completed with a digital signature.
Russian Federation (Federal Law No. 63-FZ “On Demand Signature (July 1, 2011) (Federal Law No. 149-FZ “On Information, Information Technology and Protection of Information” (July 27, 2006)) (Part Four of Civil Code of the Russian Federation (Art. 160))
In Russia, all parties must consent to doing business electronically. Only digital signatures are recognized as legal and valid. Under Russian law, a digital certificate and signature vendor must be certified by the Russian government (despite courts often upholding basic electronic signatures as enforceable). Russia does not explicitly prohibit any specific type of documents from being completed with a digital signature.
Turkey (Electronic Signature Law (No. 5070))
Turkey mirrors the UNCITRAL Model law. Basic electronic signatures are not addressed by Turkey law. Digital signatures are recognized as legal and valid so long as the digital certificate is issued by a qualified services provider. Should a party challenge the validity of a digital signature, that party is burdened with proving it is invalid or forged. Turkey does not explicitly prohibit any specific type of documents from being completed with a digital signature.
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