Now that so much government, economic, and business activity has moved from paper hard copy to digital formats electronic signature (e-signature) capabilities are more vital than ever. While most developed countries/regions have an e-signature code or act to abide by, not all as coherent as one might hope. The European Union (EU) has had Directive 1999/93/EC of the European Parliament and of the Council of 13 December 1999. That framework has turned out to be problematic in various ways and will be replaced on July 1, 2016 with a Regulation on Electronic Identification and Trust Services (eIDAS).
The framework, in place since December 1999, has been the guidelines for EU Member States with regard to e-signatures. Acceptance of international e-signatures can be challenging: the recipient may not trust that the signature is authentic, while the sender must trust that the signature will be accepted at its destination. The 1999 Directive stated that “an advanced eSignature based on a qualified certificate satisfies the legal requirements of a signature in relation to data in electronic form in the same way a handwritten signature satisfies requirements for paper-based data.” By “advanced” it means the mark is unique to the signer, and “qualified certificate” includes identification information about the source and provider. In short, the 1999 directive says that with qualifications, an electronic signature is just as valid and binding as a written one.
While the 1999 Directive was successful in binding Member States of the EU, each Member interpreted the regulations differently. This often caused confusion and lowered the efficiency that the Act sought to promote; an e-signature would have to be verified subject to multiple sets of guidelines. When the Act was adopted, its goal was to allow for easy transfers of electronic information across borders.
Electronic Identification and Trust Services
The new regulation (eIDAS) will set out to fix the problems faced by the original directive. Going even further, the eIDAS will automatically invalidate any national e-signature laws that a Member State has established that are inconsistent with the new act, instantly decreasing the potential for confusion and inefficient transactions.
Under eIDAS, people and businesses of EU Member States will be allowed to use their nationally recognized electronic identities in cross-border transactions with other countries to access e-gov services. Essentially, this allows a person or company to keep the form of electronic identification their country uses, but allows that format to be accepted by all other EU Member States. While the initial implementation will be geared toward government services, private sector businesses have the opportunity to opt-in to the regulations on a voluntary basis.
On top of the new universal acceptance of national electronic identifications, eIDAS has also developed a set of e-Trust Services (eTS), which the Regulation will adopt with the overall goal of increasing confidence in the legality of electronically signed. The main services that make up eTS consists of a few main services, including E-seals, which allow not only individuals but also corporations to e-sign a document, which makes things like e-billing easier; time-stamping to provide evidence of exactly when a transaction took place; and electronic registered delivery which will work somewhat like certified mail by identifying the recipient and when they received the document signed.
Does This Affect the U.S.?
Considering the fact that the United States is not a member of the EU, there is no real effect for business in the U.S. The United States, at the federal level, already has a framework set up in the E-Sign Act so that e-signatures can’t be denied legal qualification simply for being electronically based. For the most part, states have adopted the Uniform Electronic Transactions Act (UETA), which has essentially the same guidelines.
eIDAS is a big step forward in expanding efficiency, trustworthiness, and confidence in electronic transactions. With the removal of previous barriers to cross-border transactions, electronic data transfer of secure information in the EU will become much easier starting in July 2016.
Image courtesy of Flickr user Gardyloo2011