September 2023
Jane Tsai and Lilian Hsu
The current Electronic Signatures Act has been in effect for over 20 years since its implementation in 2002, and there have been no amendments during this period. With the global digital transformation, the opportunities for digital applications have increased, and society’s acceptance of digitalization has significantly improved. In response to these changes and to promote the widespread use of electronic documents and electronic signatures, the Ministry of Digital Affairs (the “MODA”) pre-announced the draft Amendments to the Electronic Signatures Act (the “Draft”) on June 27, 2023.[1] These Amendments are highlighted below:
1. Clarifying the relationship between electronic signatures and digital signatures
Article 2, Subparagraph 3 of the Draft explicitly provides that a digital signature is classified as a type of electronic signature. A digital signature is required not only to meet the definition of an electronic signature but also to employ private key encryption and public key verification technology and should be used with a legal certificate. Under Article 6, Subparagraph 2 of the Draft, such a legal certificate refers to a valid certificate issued by a certificate authority as stipulated by the Electronic Signatures Act and has not expired.
2. Specifically stipulating that the function of electronic documents and electronic signatures is equivalent to that of physical documents and signatures
(1) Article 4 of the Draft stipulates that electronic documents and electronic signatures are functionally equivalent to physical documents and signatures. However, in cases of disputes concerning the “authenticity of a signature” or ” whether it was signed by the person in question,” the burden of proof remains with the party claiming the signature is genuine and signed by the person in question.
(2) Pursuant to Article 6 of the Draft, a digital signature carries the “presumption” of being signed by the person in question.
3. Expanding the application of electronic documents and electronic signatures
(1) In principle, both documents and signatures can be prepared and given in electronic form.
The use of electronic documents and electronic signatures is not limited to “transactions.” In principle, documents and signatures can be prepared and given in electronic form (the explanation of Article 1 and Article 5, Paragraph 1 of the Draft).
It should be noted, however, that for documents required by law “to be prepared in writing” or to be “preserved in writing,” the content must be capable of complete presentation and retrievable for future inspection as a precondition in order to be prepared in electronic form (Article 5, Paragraph 3 and Article 8, Paragraph 1 of the Draft).
(2) The use of electronic documents or electronic signatures no longer requires the counterparty’s consent.
Recognizing that practical situations may not always involve a counterparty, the Draft removes receiving the “counterparty’s consent” as the precondition for using electronic signatures. Pursuant to Article 5, Paragraph 4 of the Draft, the use of electronic documents or electronic signatures no longer requires the “consent of the counterparty.” However, before an electronic form is adopted, an opportunity for refusal or alternative options should be provided to the counterparty.
(3) Administrative agencies shall not restrict the use of electronic documents and electronic signatures through directives or notifications.
The current Electronic Signature Act authorizes administrative agencies to exclude the application of electronic documents and electronic signatures by way of directives but does not require administrative agencies to state the reasons for the exclusion or periodically review the necessity of continued exclusion (Article 4, Paragraph 3, Article 6, Paragraph 3, and Article 9, Paragraph 3 of the current Electronic Signatures Act). As a result, this has resulted in over two thousand examples of exclusion, which is inconsistent with the regulatory objectives of the Electronic Signatures Act to promote e-government and e-commerce. Therefore, Article 11 of the Draft stipulates that administrative agencies shall not exclude the application of the Electronic Signatures Act through directives or notifications. Within three years after the Amendments to this law take effect, administrative agencies should gradually repeal notifications excluding the application of the Electronic Signatures Act (Article 17 of the Draft).[2]
This Draft covers a wide range of aspects, including the definitions and effectiveness of electronic documents and electronic signatures, and the Draft expands the scenarios where electronic forms can be used. The pre-announcement period for the current Draft ended on August 25, 2023, and we will pay continued attention to the progress of subsequent legislative deliberations.
[1] The draft Amendments to the Electronic Signatures Act pre-announced by the MODA at https://moda.gov.tw/ADI/news/latest-news/5635
[2] Announcement on the items of various agencies that are excluded from the application of the Electronic Signatures Act at https://gcis.nat.gov.tw/mainNew/matterAction.do?method=browserFile&fileNo=t70445
The contents of all materials (Content) available on the website belong to and remain with Lee, Tsai & Partners. All rights are reserved by Lee, Tsai & Partners, and the Content may not be reproduced, downloaded, disseminated, published, or transferred in any form or by any means, except with the prior permission of Lee, Tsai & Partners.
The Content is for informational purposes only and is not offered as legal or professional advice on any particular issue or case. The Content may not reflect the most current legal and regulatory developments. Lee, Tsai & Partners and the editors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The contributing authors’ opinions do not represent the position of Lee, Tsai & Partners. If the reader has any suggestions or questions, please do not hesitate to contact Lee, Tsai & Partners.