Are digital signatures legally binding?

Digital signatures are the most advanced and secure type of electronic signature, but how valid and recognized is it?
At Penneo, being compliant with legal requirements is a must.

Legal effect of electronic signatures

Electronic signatures refer broadly to any electronic process that indicates acceptance of an agreement or a record.

Digital signatures, also known as advanced or qualified e-signatures, refer to one specific type of electronic signatures. Digital signatures use a certificate-based digital ID to authenticate signer identity and demonstrate proof of signing by binding each signature to the document with encryption.

A digital signature is as legally binding and valid as a traditional signature placed with ink on paper. The eIDAS regulation Art.25 contains a decisive ban on discrimination against agreements concluded digitally. In other words, it is contrary to the law if you, as an enterprise or authority, refuse to accept or recognize contractual documents solely on the grounds that they are digitally signed.

 

Regulatory framework

Digital signatures are legal, trusted and enforceable in nearly every industrialized nation around the globe and are actively in use in Europe. Penneo support the vast majority of legal requirements in the member states of EU as well as Norway. For most business and consumer transaction, a standard electronic signature is enough, other transactions - as a matter of national law - may require a digital (advanced or qualified electronic) signature.

European Union

  • In the EU, the Electronic Identification and Reliance Service Regulation for Electronic Transactions in the Internal Market (eIDAS Regulation) took effect in July 2016, establishing a consistent legal framework for the recognition of electronic signatures across the entire EU. eIDAS makes any type of e-signature legal and enforceable, but only qualified electronic signatures hold the same status as a signature placed with ink on paper. Penneo digital signatures are compliant with eIDAS technical standards for electronic signatures. Learn more about eIDAS.

Scandinavia

  • Penneo supports national digital certificate-based signatures with Norwegian BankID, Swedish BankID and Danish NemID and comply with the regulation requirements on Advanced Electronic Signatures in Denmark and Sweden, and on Qualified Electronic Signatures in Norway. BankID is certified at the highest public authentication and non-repudiation level for electronic IDs in Norway (level 4).
  • Denmark and Sweden, as member states of the EU, follow the eIDAS regulation regarding the legal effect of electronic signature. Norway follows the Act on implementation of the EU regulation on electronic identification and trust services for electronic transactions in the internal market (the Act on Electronic Trust Services), which implements the eIDAS in Norway. Read more about Norwegian Act on Electronic Trust Services here.

Other European countries

  • Penneo helps you comply with regional and industry regulatory requirements. Everytime we roll out our digital signature solution to a new country, we make sure we are compliant with local laws, legal standards and regulatory requirements.

 

Know-Your-Customer

The process of Know-Your-Customer (KYC) concerns what businesses do in order to verify the identity of their clients. Many companies subject to the Anti-Money Laundering ACT begin their KYC procedures by simple collecting basic data and information about their customers, often by requesting scanned copies of passports, Driver License or similar ID. This is cumbersome, time consuming and insecure. Penneo’s solution lets your customers handle everything using their national digital IDs directly from their computer or smartphone and still comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations.

If you want to learn more about KYC process, click here.

 

Communication around digital signature

At Penneo, we encourage our customers to communicate about the efforts they are making in terms of compliance and security. Teaming up with companies working on high standards reinforces a trustworthy responsibility as a business.

Click here to learn more about it.