Electronic Digital Signature Law now in Russia

On 14 January the Law was officially published and, as a result, it went into effect. Unfortunately, it seems that this new law will not create enough confidence to drastically increase the use of electronic documents in Russia. In fact, the impact of the Law on IT business and commerce in Russia would be far more significant if a draft Law on Electronic Trade was also adopted, since this draft law contains important provisions with respect to the use of electronic documents (including use as evidence in court), as well as, other provisions relating to transactions concluded over the Internet. Additionally, several practical limitations, which we have described below, will most likely serve as barriers to the value of the Law.

The underlying concept of the Law establishes encryption as the only method whereby a valid (from the standpoint of Russian law) electronic digital signature may be created. The Law is drafted to intentionally omit other analogues of personal signatures and exclude the use of other technologies for electronic digital signature creation. Further, the Law limits the scope of use of electronic digital signatures to civil law transactions and transactions where electronic digital signatures are specifically permitted under other Russian legislation; as of today, such specific references only exist in the Russian Civil Code.

Accordingly, an electronic digital signature can be used for any civil law contract (with a few exceptions specified below), but cannot be used for signing of any electronic documents submitted to the government authorities. Equally, it cannot be used for signing of any civil law documentation that will subsequently need state registration (or notarisation).

Basic Provisions of the Law

The Law defines an electronic digital signature as:

(1) A part of an electronic document that is designated to protect the document from falsification;
(2) A product of encryption using a secret key; and
(3) The part of the document that allows for the authentication of the rightful holder of the secret key, as well as, a point of reference that can assist in detecting any distorted information contained in a document.

A person may have a number of electronic signatures.

An electronic signature is deemed equivalent to a handwritten signature if the following three conditions are complied with:

(1) The certificate of the open key of the signature is valid at the time of the authentication or at the time of the signing of the document;
(2) The signature owner's name and the secret key match and there is no evidence that the document has been distorted; and
(3) The document signed with the electronic signature falls within the scope of the transaction(s) and the restrictions indicated in the certificate.

When the abovementioned conditions are met, the electronic document will be deemed-by operation of law-to be legally signed by the individual. Thus, the transaction will have binding legal force.

Certificates of Electronic Digital Signature and Certification Centres

Certification of electronic digital signature should be issued in hard copy. Foreign certificates will be recognized in Russia, provided that they are on paper and duly certified (notarised and legalized or apostilled).

Activity of the centres that are authorized to authenticate digital signatures and issue the certificates for open keys (the "Centres") will be subject to regulation by "an authorized federal executive body" which is to be selected (and dismissed) by the Government. It should be noted that the Law does not name the particular government body that will carry out this function. Further, the Law tends to be conservative with respect to the rights of the Centre to the detriment of the holders of certificates and the recipients of digitally signed documents.

Use of Electronic Digital Signature

In conclusion, taken the abovementioned points into account, the contents of a document signed on paper and stamped with a company seal may be considered legally equivalent to an electronic document if the content is converted into an electronic form and the e-document is electronically signed by an "authorized" company officer. However, under the Law, electronic digital signatures used in public domain (any information system open for use to anyone) must be created exclusively by means of software and hardware certified in Russia. Since certification in Russia can be a lengthy process that may require, among other things, that the software is de-compiled, many companies will not be able to reap the benefits of electronic digital signatures.

Source: Baker & McKenzie Legal Alert, 14 January 2002.
(MN)

©2002 Baker & McKenzie