Is Europe’s Experience in E-Signatures and Digital IDs Valuable for Australia?

Europe has been running a legislative framework for electronic signatures and digital identities since 1999. In 2014, the European Parliament introduced a significant upgrade by presenting electronic identification and trust services for electronic transactions in the internal market, or eIDAS, regulation.

While the main objective of electronic signatures is to eliminate the administrative hurdles, there are important administrative and public policy issues that should be addressed by cross-border digital signatures. For example, European countries are still still reluctant to register themselves as part of the Common Framework in Estonia. This is because many existing European rules governing the development and implementation of eIDAS, as well as practices for the identity verification of electronic transactions, need to be adapted in a manner.

In light of recent initiatives in Australia to improve legislation for doing business remotely, this experience is valuable because the European community was among the first in the world to introduce electronic signatures, and it developed a unique legal and technological framework that many other countries borrowed.

This means that companies of all sizes and operators of eIDAS-enabled companies will have to integrate a signatory process with all these identifiers. At present, in order to integrate a company into an internal eIDAS network, the signatory and the intermediary have to negotiate a transposition of the relevant legislation in each Member State. This would require many rounds of delegation as each country has its own internal legislation on digital signatures and digital identities. Furthermore, individual companies do not receive any benefit from this access to the market.

For Australian businesses, there are risks involved. Failing to ensure compliance with the Australian laws is a significant obstacle to building an online business in Australia. Australian law gives a detailed definition of anonymous services and state laws should be followed in all jurisdictions. While companies should identify themselves, their email address and local service providers should be included. This may be more efficient than manually reviewing registrations, as it is easier to compare and match addresses of registered e-service providers.

Though the experience is full of pitfalls and drawbacks, which are also valuable to consider. It also has a significant gap in the use of blockchains and addressing the issue of the legal validity of blockchain transactions, including smart contracts.

All this is supported by the obligation to send/receive valid ID and a trustworthy signature for all electronic transactions and it is also mandated for all securities. These industry stakeholders are in favour of an update to the legislation because it is an "e-identity" instrument, which helps to move electronic payments to the next stage of electronic payments – the fast-moving stage that we have seen. On the other hand, we also believe that it is vital to support the electronic signatures of the stakeholders of the digital economy.

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