The implementation of the new E-Transactions law has brought significant advancements in the realm of cross-border transactions, specifically through the use of e-signatures. With the increasing digitalization of business processes, e-signatures have emerged as a convenient and efficient method of authentication for electronic documents and agreements. This revolutionary approach allows for seamless and secure cross-border transactions, eliminating the need for physical signatures and paper-based processes. The new E-Transactions law provides a legal framework to recognize and enforce e-signatures, ensuring their validity and reliability in international transactions. As a result, businesses can now conduct cross-border transactions more efficiently, saving time and resources while maintaining the necessary legal requirements.
The main difference between e-signature and digital signature
E-signatures and digital signatures have distinct meanings under the E-Transactions 2005 (Former Law) and the new E-Transactions Law, as clarified by the new law. Additionally, the definitions of “e-signature” and “digital signature” remain unchanged between the Former Law and the new law. Furthermore, the new law defines an e-signature as electronic data attached to or logically combined with a data message to certify the signatory and indicate their consent to the content of the data message. On the other hand, a digital signature is an e-signature that uses asymmetric cryptography, consisting of a private key for signing and a public key for verifying the digital signature.
Therefore, if a scanned copy of a wet-ink signature fulfills the qualifications of an e-signature as defined above, it can be considered an e-signature. However, it may not meet the requirements of a secure specialized e-signature under the new law to be legally recognized in Vietnam with equal validity as an original wet-ink signature.
Criteria for e-signatures in the private sector to be legally recognised in Vietnam
The new law categorizes e-signatures into three distinct categories: specialized e-signatures, public digital signatures, and specialized digital signatures for public use. Each category is accompanied by specific criteria outlined in the law. In the context of private sector organizations or entities, the applicable category is “specialized e-signatures.”
A specialised e-signature will be lawfully recognised with equal validity as a wet-ink signature if it meets the following criteria:
(i) Being capable of authenticating the signatory and hisher approval of he contents of a data message
(ii) The data creating the e-signature (i.e e-signature creation data) are only attaches to the approved contents of the data message.
(iii) Only the signatory has control of the e-signature creation data at the time of signing
(iv) The contracting parties may verify the validity of the e-signature according to the conditions agreed upon
(v) Being qualified as a secured specialised e-signature (i.e being certified by the Ministry of Information and Communications as a secured specialised e-signauture)
An e-signature certificate is a data message certifying that organisation, entity, or individual is the true signatory of the e-signatory. An e-signature certificate may be issued by a Vietnam-domiciled authentication service provider ( “Domestic Provider”) or a foreign-domiciled authentication service provider ( “Foreign Provider”). The new law is silent as to the circumstances under which an e-signature certificate issued by a Domestic Provider may be used in the private sector. The new law only provides the framework for digital signature certificates issued by Domestic Providers for usage in the context of “public digital signatures” and “specialised digital signatures for public use” categories.
Is it possible to utilize e-signatures authenticated by Foreign Providers (“Foreitgn E-signatures”) and e-signature certificates issued by them (“Foreign Certificates”) within Vietnam?
Vietnam can acknowledge and use foreign electronic signatures and foreign certificates as long as they meet the following conditions.
(i) After fulfilling the following criteria, Vietnam officially recognized the foreign provider that issued the foreign certificates.
(a) Operating in a foreign nation and legally establishing itself;
(b) Obtaining a technical assessment of the e-signature authentication system conducted by an accredited agency in the foreign country where it originated;
(c) Updating the status of the foreign certificate in the trust service system of the relevant Vietnamese government entity;
(d) Establishing a representative office within Vietnam.
(ii) According to Vietnam law, international standards recognized in Vietnam, and international treaties to which Vietnam is a member country, the technical standards and regulations on e-signatures and e-signature certificates must be compatible with the Foreign E-signatures and Foreign Certificates.
(iii) The foreign-domiciled signatories provide adequate and verified identity information to issue the Foreign Certificates.
(iv) Eligible Users, including foreign individuals or entities as well as Vietnamese individuals or entities who transact with foreign individuals or entities from a foreign jurisdiction where Domestic Providers have not recognized them, utilize the Foreign E-signatures and Foreign Certificates. Additionally, they make use of these tools to facilitate their transactions.
The Ministry of Information and Communications has assigned the task of providing further guidance on recognizing Foreign Providers, Foreign E-signatures, and Foreign Certificates.
Notes for foreign business when take part in a cross-border transaction
Validity of e-signatures:
To ensure the e-signature’s recognition as legally valid under Vietnamese law, it is important to note that the Law on E-Transactions in Vietnam establishes the legal framework for the use and recognition of electronic signatures. To guarantee compliance, we recommend that you engage legal experts who well-versed in Vietnamese e-signature regulations.
Authentication of identity:
To prevent fraud or identity theft, it is crucial to verify the identity of the signatories involved in the transaction. This can achieved through the use of authentication measures such as two-factor authentication or digital certificates. Additionally, it is essential to utilize reliable e-signature platforms or service providers that offer secure authentication methods.
Consent and intent to sign:
Confirm that all parties involved have the intention to sign the document electronically. In Vietnam, parties must expressly consent to the use of e-signatures to ensure their legal validity. Consider including a clause in the agreement specifically stating that all parties agree to use e-signatures for the transaction.
Clear communication and transparency:
Both parties must ensure clear communication and understanding of all terms and conditions of the cross-border transaction. This encompasses conveying and comprehending the nature of the transaction, payment terms, delivery terms, liabilities, and dispute resolution mechanisms. Drafting a well-defined contract with explicit provisions will protect the interests of the foreign investor.
Data protection and security:
Consider the security measures in place for storing and transmitting the electronically signed documents. Firstly, data breaches or unauthorized access may compromise the confidentiality and integrity of the transaction. Therefore, using secure platforms with encryption protocols and ensuring compliance with data protection laws will help mitigate these risks. Additionally, implementing multi-factor authentication can further enhance the security of the documents. Moreover, regular audits and vulnerability assessments can identify any weaknesses in the system. Overall, it is crucial to continuously evaluate and update the security measures to safeguard the electronically signed documents.
Dispute resolution clause:
Include provisions in the agreement regarding the jurisdiction and governing law for dispute resolution. Specifying how to resolve conflicts or disputes arising from the cross-border transaction, such as through arbitration or mediation, can provide clarity and certainty.
Legal advice and due diligence:
Engage reputable legal counsel with knowledge and experience in cross-border transactions in Vietnam. Conduct thorough due diligence on the local laws, regulations, and business practices to ensure compliance and to protect the foreign investor’s interests.
Conclusion
In conclusion, the implementation of the new E-Transactions law, with regards to e-signatures for cross-border transactions, marks a significant step forward in promoting efficiency and security in the global economy. With this legislation in place, businesses and consumers can now confidently engage in online transactions. Moreover, they can do so knowing that their electronic signatures hold the same legal validity as their physical counterparts. This not only saves time and resources but also fosters trust and facilitates international trade. Ultimately, it drives economic growth on a global scale. As technology continues to advance, it is crucial for governments and organizations to adapt their legal frameworks in order to keep up with the evolving nature of transactions. The new E-Transactions law demonstrates a commitment to embracing the potential of digital solutions. Furthermore, it lays the foundation for a more seamless, interconnected future in the world of cross-border commerce.
HMLF is always available to offer assistance in understanding the procedures with authorities.
Harley Miller Law Firm “HMLF”
Head office: 14th floor, HM Town building, 412 Nguyen Thi Minh Khai, Ward 05, District 3, Ho Chi Minh City.
Phone number: +84 937215585
Website: hmlf.vn Email: miller@hmlf.vn
