Covid-19 “lockdown” has inevitably affected the way people conduct their business. As a large part of the workforce is currently working from home, technology’s role in ensuring the continuity of all operations and transactions, whether cross border or not, is becoming increasingly important.
This is therefore, a point in time, where the rules and regulations relating to electronic transactions and electronic signatures, which may have been left “unexplored” and “unexploited” to date, now come into play.
Regulation 910/2014/EU (hereinafter the “Regulation”), is directly applicable on all Member States of the European Union including Cyprus. Cyprus has also incorporated the provisions of the Regulation in its national legislation by enacting Law 55(I)/80 (hereinafter the” Law”). Both the Law and Regulation establish a legal framework for e-signatures, e-seals, e-documents and in general all forms of electronic identification.
The Regulation introduced three different levels of electronic signatures: e-signature, advanced e-signature and qualified e-signature. An e-signature, is defined as data in electronic form which is attached to or logically associated with other data in electronic form and is used by the signatory to sign. According to English case-law, examples of e- signatures include a signatory’s name typed at the bottom of an email, a scanned signature or even clicking an “I accept” tick box on a website. To be effective, an e-signature must demonstrate an authenticating intention i.e. that the signatory intended to be bound by the terms they have signed to.
The advanced electronic signature differs from the e-signature in that it must be uniquely linked to the signatory, capable of identifying the signatory, and created by using e-signature creation data that the signatory can, with a level of confidence use under his sole control.
Lastly, a qualified electronic signature is being defined as an advanced electronic signature created by a qualified electronic creation device. This type of e-signature is based on a qualified certificate for electronic signatures, which is issued by a qualified trust service provider.
Qualified trust service providers are providers who have been granted a qualified status by a national competent authority as indicated in the national “trust lists” of the EU Member State. Currently, in Cyprus, there is only one trusted provider listed in the Trusted List Browser. The Cyprus Stock Exchange, has assumed the role of a local registration authority mediating between the applicant and the trusted provider for the issue of a qualified certificate for e-signatures.
The competent authority and relevant supervisory body responsible for all matters regarding electronic identification and trust services for electronic transactions carried out in Cyprus is the Department of Electronic Communications of the Ministry of Transport, Communications and Works (DEC).
In practice, there are many online platforms which carry out their operations in conformity with both the Law and Regulation. Counterparties can therefore log in to those platforms, upload their documents and complete the signing process, sometimes even using the video facilities offered by such platforms. Once the document is signed, all parties are alerted and the document is stored electronically. It therefore follows, that the need for access to an industrial-sized fast printer or scanner is largely being diminished, or even eliminated, while transactions can still be completed by using any electronic device (including a pc, ipad or mobile phone) from any place a person can be working in isolation.
Of course, the legal effect and admissibility of e-signatures remains to be seen, as due to the recent enactment of both the Law and Regulation, there is no relevant case law indicating how documents bearing an e-signature will be treated by Cyprus Courts.
However, pursuant to the Regulation, an electronic signature shall not be denied legal effect and admissibility as evidence in legal proceedings solely on the grounds that it was made in electronic form or on the grounds that not all requirements of qualified electronic signatures are being satisfied. Furthermore, the Regulation also expressly states that a qualified signature shall have the equivalent legal effect of a handwritten signature (Article 25). Also, section 9 of the Law provides that even if the electronic signature does not meet the conditions of a qualified signature, it may still be considered as admissible evidence in legal proceedings in Cyprus.
It seems therefore, that despite the fact that the legal effects of an e- signature have not yet been fully tested by the Cyprus Courts, this may now be perfect timing to utilise the benefits provided by the Law and Regulation so as to ensure that all businesses and transactions remain active and connected.