Understanding eIDAS and Compliance

The reliance on electronic transactions and documentation has increased considerably Consequently, regulations that govern the trust, validity and security of these processes have become increasingly important. One paramount piece of legislation in the European Union is eIDAS – short for Electronic Identification, Authentication, and Trust Services. For compliance managers, understanding the eIDAS regulation is critical to ensuring that electronic transactions are both legally binding and secure.

Introduction to eIDAS

The eIDAS regulation ensured that electronic interactions across the EU member states are as secure, reliable, and trustworthy as traditional paper-based processes and that these transactions are accepted as legally binding in all member states. It provides a standardised framework for electronic identification and trust services for electronic transactions within the internal EU market.

A “trust service” refers to an electronic service typically offered for a fee, which includes:

– The creation, verification, and validation of electronic signatures, electronic seals, electronic time stamps, electronic registered delivery services, and related certificates.

– The creation, verification, and validation of certificates for website authentication.

– The preservation of electronic signatures, seals, or certificates related to these services. 

The 2024 revision of eIDAS that came into force in May of that year, added a couple of new Trust Services:

• Electronic Archiving for guaranteeing the authenticity and long-term availability of documents and data
• Attribute Attestation to verify credentials or attributes shared by a person

These are not all the Trust Services as defined by eIDAS. More importantly, the new version of eIDAS now also provides the framework for the European Digital Identity Wallet, which will rely on the infrastructure provided by the Trust Services to create a true paperless economy. 

In short, eIDAS paves the way for the increased use of digital services and aims to foster trust in the online environment. It standardises the types of electronic signatures, seals, and records, making cross-border business smoother and more reliable.

Explanation of the eIDAS Regulation and Its Objectives

The core objectives of eIDAS are to enhance trust in electronic transactions and ensure the digital market’s smooth functioning. This is achieved by:

• Providing legal certainty for electronic transactions and data Implementing interoperability standards to facilitate seamless cross-border transactions in the digital single market.
• Creating a safe and secure technical infrastructure for digital transactions. 

Requirements for Qualified Electronic Signatures

Under eIDAS, the highest standard of electronic signature is the Qualified Electronic Signature (QES), which requires a higher level of security and identity verification. The primary criteria include:

• The use of a qualified signature creation device.
• The involvement of a qualified trust service provider to certify the signature’s validity.
• The signature must be linked to the signer to make any subsequent changes to the data detectable (data integrity).

Compliance Considerations

Any company that needs the highest legal guarantees regarding its signature processes can use qualified electronic signatures. Due diligence and adherence to regulation are imperative for compliance managers when opting for QeS. You must ensure your electronic signature solution conforms to the eIDAS requirements while operating within the EU. Points to consider include:

• Understanding the requirements of eIDAS.
• Evaluating current practices and systems in place.
• Implementing solutions that meet the stringent requirements for QES.
• Keeping proper documentation and records to demonstrate compliance.

Qualified Electronic Signature Use Cases:

1. Business Transactions: When finalizing significant business transactions, such as signing contracts for mergers and acquisitions, joint ventures, or partnerships, a qualified electronic signature ensures the highest level of security and legal recognition.
2. Legal Documents: For signing legal documents, such as testaments, power of attorney, or court filings, a qualified electronic signature provides a robust authentication method that can be crucial for legal validation and compliance.
3. Government Services: When interacting with government services, such as filing taxes, submitting regulatory documents, or applying for permits and licenses, using a qualified electronic signature can streamline processes and ensure document integrity.
4. Employment Contracts: Employers and employees can use qualified electronic signatures to sign employment contracts, non-disclosure agreements, and other HR-related documents, ensuring authenticity and reducing the risk of forgery.
5. Healthcare Consents: In the healthcare sector, qualified electronic signatures can be used for signing patient consent forms, medical records, and insurance claims, ensuring that sensitive information is securely handled and authenticated.
6. Real Estate Transactions: When dealing with real estate transactions, such as signing purchase agreements, mortgage documents, or rental contracts, a qualified electronic signature can provide the necessary security and legal standing.
7. Intellectual Property Agreements: For intellectual property matters, such as patent applications, trademark registrations, or licensing agreements, a qualified electronic signature can help protect the interests of all parties involved.
8. Financial Services: In the financial sector, qualified electronic signatures are essential for signing loan agreements, opening bank accounts, executing investment trades, and other financial instruments, ensuring compliance with stringent regulatory requirements.
9. Corporate Resolutions: When a board of directors or corporate officers need to sign resolutions, meeting minutes, or other official documents, a qualified electronic signature guarantees authenticity and legal acceptance.
10. Supplier and Vendor Agreements: Businesses can use qualified electronic signatures to ensure the authenticity and enforceability of agreements with suppliers and vendors, such as purchase orders, service contracts, and delivery confirmations.

Conclusion

eIDAS is a digital guideline defining the trust and security standards in electronic transactions. Adherence is important for compliance and building confidence in digital signatures and your organisation’s overall digital transformation plan. It is crucial to stay informed about legal requirements and technological developments to handle the challenges of digital compliance effectively. Dedicate yourself to continuous learning and stay updated on best practices to keep your organisation secure, compliant, and at the forefront of the digital landscape. Remember, eIDAS is not just a legal requirement; it’s also a driving force for making the digital economy more accessible, transparent, and secure.