businessman writing signature in the air

In 2014 a new legal framework was introduced by the EU, through the adoption of a new regulation known as the e-IDAS Regulation or the Electronic Identification Regulation, which relates to electronic signatures, trust services and electronic identification (eID).

It provides for mutual recognition of electronic signatures and will also lay down rules for trust services in electronic transactions and establish a regime for the mutual recognition of eIDs between member states.  It is due to take effect from 1 July this year, replacing the existing Directive on Electronic Signatures.

What are electronic signatures?

Electronic signatures are the electronic equivalent of a written signature. They can take many forms and roughly fall into three groups:

  1. Simple electronic signatures – which include scanned signatures and tickbox plus declarations;
  2. Advanced electronic signatures – which can identify the user, is unique to them, is under the sole control of the user and is attached to a document in a way that becomes invalidated if the contents are changed; and
  3. Qualified electronic signatures – an advanced electronic signature with a digital certificate encrypted by a secure signature creation device e.g. smart card.

What are trust services?

Trust services are service providers for electronic verification of items such as electronic signatures seals and time stamps and electronic documents, registered delivery services and certificate services for website authentication.  In short, they help us create and maintain a more secure framework for verification of electronic dealing and contracting.

What are eIDs?

eIDs are electronic forms of identification, such as smart cards. Although they can take a number of forms and be issued by different bodies (such as banks), most significantly for the purposes of the Regulation is that these are issued by governments in a number of EU countries and often used as a means of accessing public services in these countries.

Why is the new regulation needed?

816 million people live in the EU of which it is estimated that 565 million use the internet. It is also estimated that 2 million jobs in the EU are directly or indirectly related to e-commerce. 645,000 online businesses are estimated to trade in the EU[1]. These figures highlight how the internet has permeated business throughout the EU and the need to ensure that processes are in place to facilitate online transactions across member states and to protect those doing business online.

The existing Directive required member states to implement their own rules. This has led to issues in the EU regarding certifying the authenticity of eID because of a lack of uniformity of rules across different member states and difficulties in cross border electronic transactions.  For example:

  • a student in Italy who is registering to study with a public body in another EU state may not be able to enrol as her Italian eID is not recognised in that country; or
  • a large multinational based in Manchester may have problems when executing contracts electronically with a counterpart based in Denmark or Poland because of different approaches to trust services.

The EU has therefore acted through the e-IDAS Regulation to solve these types of issue in the modern (and increasingly digital) marketplace. The Regulation is, on the whole, directly effective in each member state and so addresses the issue of lack of uniformity.

What does the e-IDAS regulation do?

As we’ve said above, the Regulation repeals and replaces existing EU provisions on electronic signatures with effect from July 2016.  It introduces rules so that electronic signatures (or seal time stamps etc) will not be denied legal effect and admissibility in court on the basis that they are in electronic form. The Regulation does require that electronic signatures and seals meet certain technical requirements to confer a presumption of integrity of the data and of correctness of the original of that data to which it is linked.

Another key change is that eID schemes used by public sector bodies will be mutually recognised. This should have a significant effect facilitating more efficient interaction with public bodies. Although member states do not have to implement the scheme yet (some parts of the scheme will become mandatory by 2018), the e-IDAS Regulation will ensure uniformity across the EU and addresses the existing problem of different national rules on electronic signatures. Businesses that use electronic signatures and seals need to be aware of these changes.

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The Regulation:

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This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.