INTERNET LAW - The EU Law on Electronic Signatures and its Recent Report

Martha L. Arias, IBLS Director
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Directive 1999/93/EC constitutes the legal framework for electronic signatures and certain certification services in the European Union (EU). Up to 2007, 25 EU countries have domestically adopted the general principles of this Directive and it has positively, although slowly, impacted the evolution of electronic commerce among them. This article presents a brief explanation of Directive 1999/93/EC and its complementary directives, and informs on the report by the Commission to the European Parliament and the Council on the impact of this Electronic Signature directive.

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Directive 1999/93/EC constitutes the legal framework for electronic signatures and certain certification services in the European Union (EU).  Up to 2007, 25 EU countries have domestically adopted the general principles of this Directive and it has positively, although slowly, impacted the evolution of electronic commerce among them.   This article presents a brief explanation of Directive 1999/93/EC and its complementary directives, and informs on the report by the Commission to the European Parliament and the Council on the impact of this Electronic Signature directive. 

 The purpose of Directive 1999/93/EC (the Directive) is to facilitate the use of electronic signatures in the EU countries and contribute to its legal recognition.    The Directive defines electronic signatures as 'data en electronic form which are attached to or logically associated with other electronic data and which serve (sic) as a method of authentication."  An example of this could be the simple signature attached to an e-mail,  

 Additionally, the Directive defines ‘advance electronic signature' as an electronic signature that is uniquely linked to the signatory, is capable of identifying the signatory, is created using means under the sole control of the signatory, and is linked to the data to which it relates in a way that alterations may be easily detected.    Examples of these e-signatures are those e-signatures that use a Public Key Infrastructure (PKI). They use a private and public key and use encryption technology (For instance, online credit card signatures).   

 Article 5 of the Directive expressly states the legal effects that an ‘advance electronic signature" and an ‘electronic signature' should have in the EU states. The Directive, article 5, rules that ‘advanced electronic signatures' shall be admissible evidence in legal proceedings among the EU member states, provided that some requirements are met.  First, the advance electronic signature should be based on a ‘qualified certificate;' it should be created by a ‘secure-signature creation device'; it should satisfy the same legal requirements as if it were related to a paper-base data.

 Yet, the legal effects of simple ‘electronic signatures' (not advanced e-signatures) seem to be far reaching according to the norm.  Article 5,(2) establishes that the EU member states must ensure that electronic signatures are effective and admissible evidence in legal proceedings even if they are in electronic form and do not meet the above listed requirements.  Thus, your signed e-mail is certainly admissible evidence in the EU member states.

 After the adoption of this Directive on Electronic Signatures in 1999, the EU has implemented new legislation that complements this Directive and creates an appropriate legal environment for e-commerce and e-transactions.  For instance, Directive 2001/115/EC on electronic invoices.  Directive 2001/115/EC recognizes the validity of electronically sent invoices that use advance electronic signatures.

 Another example of EU Directives complementing the one on electronic signature is the public procurement Directives.  These Directives do not explicitly state the type of e-signatures to be used on public procurement but notes that the use of electronic signatures must be according to Directive 1999/93/EC.   These Directives though, call for uniformity on the domestic institution of e-signatures for public procurement so there are not barriers for e-procurement transactions among the EU states.    

 But in the ‘real world' (or practical world- whatever your philosophy is), how is this Directive really impacting the development of e-commerce in the EU states?   According to the European Parliament and the Council August-2006 report, the use of advanced electronic signatures in the EU has been less than expected and it has reported some slow development.  Thus, the Commission cannot provide a comprehensive assessment of the exchange of electronic signatures among EU states.  The Commission deems that economic grounds are the reasons for this sluggish development of e-signature exchange among the EU states.   The Commission says service providers do not have enough incentives to create interoperable solutions or ‘multi-application electronic signature.'  They rather want to develop solutions for their specific services, like the banking sector, etc.  Besides lack of interoperable solutions, comprehensive solutions for electronic archives constitute another problem that precludes the development of e-signature interchange among the EU members.  

 The Commission notes that e-procurement in the EU have reached an interesting level and promises to drive the market in the future.  The role of e-government applications have is set on the i2010 initiative 19. 

 The Commission concludes it report saying that they will closely monitor the use of electronic signatures in the EU and "particular emphasis will be on interoperability and cross-border use of electronic signatures. The Commission will encourage further standardization work in order to promote the interoperability and use of all kinds of technologies for qualified electronic signature in the internal market."

  

Martha L. Arias, IBLS Director

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