Electronic signing of EU and US documents

Electronic signature

The scope of application of electronic signatures varies and includes signing legal contracts, financial transactions, online store transactions, and administrative procedures. They allow for secure identification of participants and provide a fast and convenient process for performing important actions, such as concluding agreements or submitting applications for public services.

The first electronic signature appeared in 1869 in the United States, when in the case of Howley v. Whipple, a signature was provided via telegraph to authorise a document. Even then, the court recognised that the intention and consent of the parties was sufficient, and that the method of transmitting the signature did not affect its legal validity.

More than a century later, in 1999, the European Union adopted the EU Directive on Electronic Identification (eIDAS), which was updated in 2014 by the Regulation and laid the legal foundations for the modern electronic signature. At the same time, in the United States, almost simultaneously, with only a one-year difference, the following appeared: the Uniform Electronic Transactions Act (UETA) of 1999 and the Electronic Signatures in Global and National Commerce Act (ESIGN Act) of 2000, which confirmed the simple fact that a signature in digital format has the same legal force as a handwritten one.

But the most important thing is not the signature itself, but its intention. Today, your expression of will can be recorded in different ways. For example, through an electronic signature, confirmation in an application, or even in ordinary correspondence. Sometimes a simple ‘yes’ in a messenger is already legal consent.

European practice of regulating electronic signatures

The EU has clear rules on how to use electronic signatures, their principles and legal requirements. In particular, eIDAS divides electronic signatures into:

• Simple (SES) – any electronic data that confirms the signatory’s consent and is logically related to the document. For example, this could be writing a name in an email, clicking the ‘Accept Terms’ button, or inserting a facsimile signature.
• Advanced (AES) is an electronic signature that identifies the signatory, guarantees that they control the signature, and ensures that the document has not been altered after signing. For example, when a user signs a document through a special service with two-factor authentication (BankID), and the system guarantees that the document cannot be changed after signing.
• Qualified (QES) is a secure electronic signature that confirms identity through electronic identification. It is typically used for important documents and transactions. For example, when signing official documents through the eID system in the EU, you undergo electronic identification, and the signature is automatically confirmed by a qualified certificate.

European electronic signatures can be used by government agencies, businesses, digital solution providers, and citizens of the EU and other countries. In addition, thanks to European standards, electronic identification issued in one country allows users to access online services in other EU countries, provided that security standards are met.

However, although electronic signatures are recognised as legally valid, the relevant authorities must ensure that an appropriate IT system is in place to process electronic documents. For example, in the case of a Polish citizen, the rejection of an electronic document was deemed unlawful due to the lack of adequate technical infrastructure for its processing, which highlights the importance of implementing modern systems for working with electronic signatures.

It is also important to follow established procedures to avoid unauthorised deviations. For example, in one case, the refusal to recognise a document was related to the use of scanned images of signatures instead of QES, which has a higher level of authentication and protection. This example demonstrates that not every digital signature is legal, and violation of the requirements may result in the document losing its legal force.

Regulation of electronic signatures in the US

In the US, unlike in the EU, there is no clear classification of electronic signatures into different types, but the following are generally accepted:

• A simple electronic signature is any electronic method of confirming consent without additional security measures. An example would be entering your name in an online form.
• A digital signature is an electronic signature that uses cryptography and a digital certificate to authenticate the signer. An example would be signing a contract through various services.
• A biometric signature is a signature based on a person’s unique biological characteristics for identification. An example would be using a fingerprint to log in to a system or confirming identity through facial recognition.
• A clickwrap signature is a consent confirmed by clicking the appropriate button when interacting with an online service. An example would be accepting the terms of use when registering or using a website.

US legislation equates electronic signatures with handwritten signatures, simplifying the signing and management of documents. In addition, the UETA stipulates that contracts concluded electronically remain valid at all times, and that the electronic record itself satisfies the requirement of the law on written form and complies with the requirements of the law on signatures. However, they cannot be used in transactions governed by the Uniform Commercial Code (sales, leases, commercial paper, banking transactions, money transfers, wholesale deliveries, title documents, investment securities) or in family law matters (wills, adoptions, divorces, etc.).

The legal requirements set forth in the ESIGN Act establish the following basic requirements:

• Intent to sign – the signer must clearly confirm their intent (for example, by clicking the ‘Accept’ button or entering their name).
• Consent to electronic document exchange – the user must agree to the use of an electronic signature and confirm that they have the technical capabilities to do so.
• Option to refuse – the signer must have an alternative to a handwritten signature.
• Access to a copy of the document – all parties receive a signed version of the document.
• Record retention – signed electronic documents must accurately reflect the agreement and be available for reproduction.

Recognition of electronic signatures

Agreements between countries are important for the effective use of electronic signatures at the international level. Such agreements ensure their mutual recognition and the possibility of using electronic signatures in international agreements and transactions.

Ukrainian electronic signatures do not yet fully function outside Ukraine. This means that for international use, intergovernmental recognition must be ensured, for example, through the conclusion of relevant agreements. However, recently the European Commission recently added Ukraine to the TC AdES LOTL list, which allows Ukrainian services and electronic signatures to be verified in the EU.

EU electronic signatures can be used in all European Union countries, but they are not valid in the United States and other countries. They also require the use of special platforms. On the European continent, you can use: the Austrian service Sproof, which allows multiple people to sign documents and create templates; the French platform Yousign; the Polish service Autenti; and the German platform Paperless. There are also services that are regulated not only by eIDAS but also by the Swiss ZertES law. For example: the Austrian service XiTrust MOXIS, the Swiss service Skribble and SIGN.PLUS.

In the US, unlike in the EU, there are restrictions on the recognition of European qualified signatures. For example, the US does not recognise the EU Trust List, and there is no automatic recognition of signatures provided by the eIDAS Regulation within the EU.

Platforms must also comply with local legislation, such as the ESIGN Act and UETA, to ensure the recognition of electronic signatures. Examples include ReadySign and Dropbox Sign, which provide secure document signing.

In addition, there are platforms in the United States that comply with eIDAS requirements but only allow the use of SES. These include DocuSign, which offers electronic signatures and additional services, and eSignatures, which supports signing via SMS and bulk document delivery, among other features.

Conclusion

Electronic signatures are becoming an increasingly important tool for businesses in a globalised world. The laws of the EU, the US and other countries recognise the legal validity of electronic signatures, but approaches to their recognition and application can vary significantly depending on the jurisdiction. Therefore, it is important for international companies and entrepreneurs to be aware of the specific features of regulation in different countries in order to ensure the legal validity of their agreements and avoid potential risks when concluding contracts.

In addition, in order for electronic signatures to be legally valid and acceptable to both parties, their recognition should be explicitly stated in contracts. It is also important to specify the acceptable means of signing and to separately provide for the storage of evidence such as certificates, metadata or action logs confirming the authenticity and time of signing documents.

Published by AIN.UA

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