After More Than 20 Years, Taiwan Officially Implements a Newly-Amended Electronic Signatures Act

Promulgated and implemented on May 15, 2024, Taiwan’s Electronic Signatures Act (hereinafter “the Act”) underwent its first significant amendment on April 30 since its establishment in 2001, with the Ministry of Digital Affairs (hereinafter “MODA”) appointed as the competent authority. The three major points of the Act’s amendment are as follow

I. To Popularize the Use of Electronic Signatures

1. Given that electronic records and electronic signatures are functionally equivalent to physical documents and signatures, the Act includes an article recognizing that both electronic and paper formats have equal function. The legal validity of electronic records and electronic signatures cannot be denied solely due to their electronic form (Article 4 of the Act).

2. The Act removes the requirement of the consent of the other party as a prerequisite for using electronic signatures or electronic documents (Paragraph 1, Article 5 of the Act). However, considering the potential digital divide between counterparties, in situations involving a counterparty, they should have an opportunity to object in an objectively reasonable manner before adopting an electronic format. They should also be informed that if they do not voice their objection, their consent to the electronic format will be assumed (Paragraph 4, Article 5 of the Act). The counterparty may decide to discontinue the use of the electronic format at any time, but any legal actions taken in the electronic format before their decision will remain valid (Paragraph 5, Article 5 of the Act).

II. To Categorize Digital Signatures and Their Presumption as Autographs

1. A digital signature utilizes mathematical algorithms and encryption technology to create an electronic signature that can be verified. To clarify the relationship between digital signatures and electronic signatures, the Act indicates that digital signatures are a type of electronic signature (Subparagraph 3, Paragraph 1, Article 2 of the Act).

2. Considering that a digital signature has a certain level of security because it requires a valid certificate issued by a certification service provider approved by the competent authority, the Act grants digital signatures the presumption of being equivalent to a personal hand and seal (Article 6 of the Act).

III. To Plan the Application and Development of Electronic Signatures

1. To achieve the policy goals of a smart government and digital transformation, the Act removes the provision that allowed administrative authorities to announce exemptions from its application. It specifies that only the Judicial Yuan or the Ministry of Justice may announce such exemptions (Paragraph 2, Article 1 of the Act), or that exemptions from the Act shall be made by law (Paragraph 1, Article 11 of the Act). For announcements already made by administrative authorities excluding the application of the Act, the Act sets a “sunset clause,” causing them to expire one (1) year after its amendment, with the possibility of an extension of up to two (2) years with the approval of the competent authority (Article 20 of the Act).

2. To facilitate the integration of electronic signatures with international standards, the competent authority may recognize the validity of certificates issued by foreign certification service providers under conditions of equivalent security requirements and in compliance with the principles of international reciprocity or technical interoperability and cooperation (Paragraph 1, Article 15 of the Act).

3. The Act mandates that the competent authority shall: (i) regularly gather information on the practical application of electronic signatures in Taiwan, (ii) conduct surveys or research on international regulations and market demands, and (iii) publish relevant findings annually (Article 19 of the Act).

4. Following the amendment to the Act on April 15 of this year, the Ministry of Economic Affairs announced a new business item, “I301060 Online Advertising Platform Business,” which now falls under the regulation of the Ministry of Digital Affairs. The Ministry of Digital Affairs will promote the adoption and verification of digital signatures for posting online advertisements to reduce internet investment scams and prevent dummy accounts, thereby fostering a trustworthy digital environment.