Digital signatures and electronic signatures are often used interchangeably. But these aren’t the same thing.
Electronic signature is a way of adding signature in PDF or word document. These are more popular compared to the digital ones as they are easy to use. With this, customers can sign documents online with just a few clicks. The only con of this type of signature is that these are not regulated like digital signatures.
Digital signature is a type of electronic signature that offers enhanced security compared to a traditional electronic signature. It is a secured signature that works with electronic signature and relies on public key infrastructure. When you sign a document with a digital signature, it links a ‘fingerprint’ of the document to your identity. Now, the information is embedded into the document, and it will show if the document is getting tampered with after you have signed it.
A combination of security of digital signature and the convenience of electronic signature is all you need.
Understanding Different Laws
On the occasion of ESIGN Day, Cygnature by Cygnet Infotech decided to share the types of laws and the laws surrounding eSignature.
There are total three types of laws considered worldwide. Let us learn about these laws in detail:
Prescriptive Laws are hardly available. These regulations require a specific technical method to sign the document electronically and it dictates the types of signature technologies that are acceptable. Only a few countries have prescriptive eSignature laws, including Brazil, India, Israel, and Malaysia.
As the name suggests, these laws allow a broad enforceability of eSignatures with few restrictions. These laws permit using eSignatures for all users and are not technology specific. Minimalist laws are like the shield and provide widest protection and work in most situations. These laws are common in countries such as the United States, Australia, New Zealand, and Canada.
Two-tier laws permit the use of eSignatures and provide greater evidentiary weight to digital signatures. This is a hybrid of minimalist as well as prescriptive laws. Two-tier laws accept all or most eSignatures on a technology neutral basis like minimalist laws, but they also create a class of approved technologies like prescriptive laws. Most European Countries, China, and South Korea have enacted two-tier eSignature laws.
eSigning Laws by Country
eSignatures are common and are regularly used for business transactions. Each State and Territory in Australia has its own electronic trans- actions legislation, which often reflect the Commonwealth ET Act, but include some specific exceptions.
The law does not require data related to eSignatures to be stored within the continent exclusively.
eSignatures are common in Belgium. However, they are subject to exceptions.
The use of certificate-based digital signatures is still evolving. It is law that no one can be obliged to contract electronically, thus the option for a handwritten signature must always be available.
The most important law to date is the July 21, 2016, Act, also referred to as the Digital Act, which states, “a set of electronic data attributable to a specific person and demonstrating the preservation of the integrity of the content of the document can be regarded as a legally valid signature.
As an EU member-country, Germany has legally recognized eSignatures since 2001, with the German Signature Law, established after the passing of the EU Directive in 1999. The EU Directive was replaced by the EU Regulation No. 910/2014 in 2014, also known as the eIDAS Regulation.
The key laws in Germany that regulate the use of eSignatures include: The Vertrauensdienstegesetz (VDG) or the German Trust Services Act which implements the eIDAS Regulation and facilitates the use of electronic trust services per the eIDAS Regulation. The Bürgerliches Gesetzbuch (BGB) or the German Civil Code which, among other things, dictates when the written form can be replaced by electronic form.
eSignatures are not common in Germany. However, their use is increasing in the business community.
Electronic and certificate-based digital signatures are regulated by the Information Technology Act, 2000 (ITAct). Both have the same status as handwritten signatures under this law. They are preferred for certain government transactions such as eFiling with the Ministry of Corporate Affairs, and goods and service tax filings.
Valid eSignatures must include an electronic authentication technique or procedure specified in the Second Schedule of the IT Act.
eSignatures have become common since the introduction of the Indonesian eSignature Regulations.
Regulating Laws include: Law 11 of 2008 on Electronic Information and Transactions, amended by Law 19 of 2016; Government Regulation 71 of 2019 on the Application of Electronic Systems and Transactions (GR71/2019); Minister of Communications and Informatics (MoCI) Regulation No. 11 of 2018 on Administration of Electronic Certification (“MoCI Regulation 11 of 2018”). These regulations accept two types of eSignatures: certified eSignatures, commonly known as digital signatures, and uncertified eSignature which do not involve a registered digital certificate provider.
The use of eSignatures are common, however, many contracts are verbal in nature, which are not required to be in written form or signed. The main policy supporting digital signatures are Section 13 of the Electronic Communications and Transactions Act 25 of 2002. Worth noting is the Accreditation Regulations issued under ECTA regulate the accreditation of authentication products and services in support of advanced eSignatures. Sections 27 and 28 of the ECTA allows a governing body to accept eDocuments, licenses, permits, and payments electronically.
Currently there are no laws prohibiting the storage and processing of electronic signature data outside of South Africa, but the Protection of Personal Information Act 4 of 2013 (POPIA), should be considered when processing, transferring, and storing personal information beyond South Africa.
United States of America
In 1999, the Uniform Law Commission drafted the Uniform Electronic Transactions Act (UETA) to provide a legal framework for the use of eSignatures. The Electronic Signatures in Global and National Commerce Act is a United States federal law passed by the U.S. Congress in 2000 to facilitate the use of electronic records and eSignatures in interstate and foreign commerce by ensuring the validity and legal effect of contracts entered electronically.
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