Therefore, this consultation focused on the following key changes to the ETA:
|➤ Allowing more transactions|
|➤ Providing certainty on the use of new technologies such as Distributed Ledger Technology, Smart Contracts, and biometrics|
|➤ Updating the Certificate Authority to meet the latest international standards|
It is worth recalling that Singapore’s Electronic Transactions Act 2010 has recognized the use of electronic and digital signatures.
Firstly, it is important to know how to differentiate between electronic signature and digital signature. Indeed, an electronic signature is an acknowledgment provided in an electronic format that a company can use to demonstrate acceptance by a party and that can be used electronically to authenticate the party concerned. Thus, electronic records are valid and enforceable by law in Singapore. An electronic signature can take the form of a click on an acceptance button on a website where the user agrees to the terms and conditions, a scan of a physical signature, a signature on a touch screen with a stylus, or agreeing to the terms and conditions through electronic communications such as emails. In contrast, a digital signature is a type of electronic signature that adds additional security by using an asymmetric cryptosystem and a hash function. As such, a digital signature is issued with a digital signature certificate that contains the user’s identity details including name, address, email, date of certificate issuance, and the name of the certification authority. Businesses use digital signature in transactions with government authorities, for example, filing tax returns, filing forms with the Accounting and Corporate Regulatory Authority.
Secondly, a company can reduce its costs by using electronic signature as opposed to traditional handwritten signature. As a result, a document can be sent by e-mail and can be signed in just a few minutes. In addition, directors of companies registered in Singapore can approve a corporate resolution passed at a board meeting with their digital signatures. The signature will therefore display the date of the signature and is particularly convenient in cases where the company keeps all its records electronically.
Finally, the ETA gives electronic signatures and their use the same status as handwritten signatures. However, the law stipulates that the signature must be unique to the person using it, it must be capable of identifying the person and it must be under the sole control of the person using it. A digital signature must also meet the following criteria to be considered secure:
1. Created during the operational period of a valid certificate and could be verified by reference to the public key specified in that certificate.
2. The certificate must be issued by an accredited certification authority in Singapore or by a recognized certification authority. It may also be issued by a public body approved by the Minister for Communications and Information to act as a certification authority. In addition, the parties have expressly agreed between them to use a digital signature as a security process, and the digital signature has been duly verified by reference to the signatory’s public key.
The Infocomm Media Development Authority defines a digital signature as “an acknowledgment provided in an electronic format that a business can use to demonstrate a party’s intent (e.g., acceptance) and that can be used electronically to authenticate the party involved“.
As electronic signatures are recognized by Singapore’s Electronic Transactions Act 2010 (ETA), this gives them the same legal status as a handwritten signature. However, the digital signature must meet certain conditions to obtain this same legal status:
|➤ The method of signature used must be capable of identifying the person signing and indicating the intention of that person concerning the information contained in the electronic record|
|➤ The method of signature used must be as reliable as appropriate for the purpose for which the electronic record was generated or communicated considering all the circumstances, including any relevant agreement|
Electronic or digital signature may not be used for documents relating to the following matters:
1. The creation or execution of a will.
2. Negotiable instruments, documents of title, bills of exchange, promissory bills, bills of lading, warehouse receipts, or any transferable document or instrument entitling the bearer or beneficiary to claim delivery of goods or payment of money.
3. The creation, execution, or enforcement of a deed of trust, declaration of trust or power of attorney, except for constructive and executory trusts.
4. Any contract for the sale or other disposition of real property.
5. The assignment or transfer of any interest in real property.
Accordingly, the parties shall not use electronic or digital signatures for documents relating to the above categories and shall comply with their respective signature requirements.