In our different jurisdictions we saw that the application and implementation of electronic signatures was accelerated during the pandemic and in recent years, Central American countries have passed legislation that gives the same legal validity and effectiveness to electronic signatures as handwritten signatures. Today, we are beginning to hear of some precedents from regulatory authorities as well as courts of law.
Below, we include some of the legal aspects and trends in the use of electronic signatures in Central America:
The law that allows and regulates electronic contracting is the Law for the Recognition of Electronic Communications and Signatures, Decree 47-2008 of the Congress and its reforms (the “Law for the Recognition of Electronic Signatures”).
This law recognizes the validity and legal effects of electronic communications and signatures. It is applicable to all types of communications, contracts and legal acts, as long as the parties have agreed, and it is given under the agreed conditions.
The conditions established in the Law to give certainty to the communications between the parties are supplementary to the agreement between them, except for the advanced electronic signature.
Contracting through this resource is regulated in the Electronic Signature Law (hereinafter the “Law”), which was approved through Decree 133 dated October 1, 2015. Since its approval, it has undergone several updates and improvements, the most recent being the one established in Legislative Decree No. 100 dated July 20, 2021.
Also, in 2018, the Regulation of the Electronic Signature Law was approved, which establishes the procedures for the issuance and use of digital certificates, defines responsibilities of certification service providers, among others.
The legal framework on commerce and electronic signatures aims to provide technological means and the operations carried out through them with legal backing and sufficient evidentiary force for them to become part of the ordinary commercial practice.
This legal framework is composed of provisions of the: Commercial Code, Civil Code, Notary Code, Law on Electronic Signatures and its regulations, Law on Electronic Commerce, and the Law of Assistance to the Productive Sector and Workers before the Effects of the Pandemic Caused by COVID-19.
In the case of financial system institutions and other institutions supervised by the National Banking and Insurance Commission, the legal framework is complemented by provisions contained in the Financial System Law, CNBS Circular No. 014/2020 and the recently published Rules for the Administration of Information and Communication Technologies.
“Electronic Signature Law” Law No. 729, approved on July 01, 2010, and published in La Gaceta, Official Gazette No. 165 of August 30, 2010. It creates the General Directorate of Technology, an agency of the Ministry of Finance and Public Credit, as the governing body of the electronic signature accreditation process. However, so far there is no company in Nicaragua providing electronic signature certification services and therefore, this resource is not used in the country, despite being regulated.
In Costa Rica we have the Regulation to the Law for the Promotion of Competition and Effective Defense of the Consumer. It regulates consumer protection in the context of electronic commerce. Additionally, we have the Law of Certificates, Digital Signatures and Electronic Documents, which establishes that the use of electronic documents is valid for the formation, formalization and execution of contracts, among others.
Article 5 of the Law for the Recognition of Electronic Signatures establishes that a communication or a contract shall not be denied legal effect, validity, or binding force for the sole reason that it is in electronic form. Nothing in that law shall cause a party to be bound to use, or to accept, information in the form of an electronic communication, but its compliance therewith may be inferred from its conduct. Likewise, nothing in the Act shall require that a communication or a contract must be made or evidenced in any form.
Said law is not applicable to obligations contracted by the State by virtue of international conventions or treaties, written warnings (which by legal provision must necessarily be printed on certain types of products due to the risk involved in their commercialization), use or consumption, solemn contracts, dispositions by cause of death and those related to family law.
Article 6 of the Law establishes that the simple electronic signature shall have the same legal validity as the autographic signature. However, it also establishes that, for legal purposes, the simple electronic signature will not have evidentiary validity in the same terms granted by the Law to the certified electronic signature, however, it may be considered as an element of proof in accordance with the rules of sound criticism.
Article 6 of the Law on Electronic Signatures establishes that: “The acts and contracts granted or entered into by natural or legal persons, subscribed by means of electronic signature, shall be valid in the same manner and shall produce the same effects as those entered into in writing and on paper. Such acts and contracts shall be deemed to be in writing in those cases in which the Law requires them to be in writing and in all those cases in which the Law provides for legal consequences when they are also in writing. The electronic signature, whatever its nature, shall be considered as a handwritten signature for all legal purposes”.
The acts and contracts in which the Law requires a solemnity that cannot be fulfilled by means of an electronic document, and those related to family law, may not be signed with electronic signature.
Article 6 – Legal Effects of the Electronic Signature indicates that it is certified and will have the same legal value as the handwritten signature. It will be admissible as a means of evidence in the judicial or administrative process, being valued according to the criteria of appreciation established in the laws of the matter.
When the law requires the handwritten signature of a person, this requirement will be fulfilled with a certified electronic signature. The following cases are excepted:
- Legal acts of family law.
- Personal acts in general.
- Dispositions by cause of death.
- Those acts that must be carried out under the formalities required by the Law of the matter or by those agreements between the parties.
The country has a Law on Certificates, Digital Signatures and Electronic Documents. Article 8 – Scope of the concept states that a digital signature is understood as any set of data attached or logically associated to an electronic document, which allows to verify its integrity, as well as to univocally identify and legally link the author with the electronic document. A digital signature shall be considered certified when it is issued under a valid digital certificate issued by a registered certifier. Article 9 – Equivalent value states that documents and communications signed by means of a digital signature shall have the same value and evidentiary effectiveness as their equivalent signed in handwriting.
In any legal norm that requires the presence of a signature, both digital and handwritten signatures will be recognized in the same way. Electronic public documents must bear a certified digital signature.
The Law regulates two types of signatures:
- The Electronic Signature is defined as data in electronic form consigned in a communication of the same nature, or attached or logically associated to the same, that may be used to identify the signatory and indicate that he/she approves the information contained in the electronic communication.
- The Advanced Electronic Signature meets the following requirements:
- Be uniquely linked to the signatory.
- Allow the identification of the signer.
- To have been created using the means that the signatory can maintain under his exclusive control.
- Be linked to the data to which it refers, in such a way that any subsequent change thereof is detectable.
The Law contemplates two types of electronic signature:
- Simple electronic signature, which is defined as data in electronic form, consigned in a data message or electronic document, logically associated to the same, which may be used to identify the signatory by any available technological means, and indicate that he approves the information contained in the data message or electronic document.
- Certified electronic signature, which is defined as the data in electronic form, consigned in a data message or electronic document, logically associated to it, which are generated by means of a secure creation device and allow the signature to be uniquely linked to its owner.
The Law on Electronic Signatures contemplates the use of two types of electronic signatures: The Simple Electronic Signature and the Advanced Electronic Signature. While it is true that advanced electronic signatures are those that can be considered to provide greater support in terms of certification of the signer’s identification, Article 6 of said Law mentions that the electronic signature, whatever its nature, shall be considered as a handwritten signature for all legal purposes.
The Law contemplates two types of electronic signature:
Electronic signature: These are electronic data integrated in a data message or logically associated with other electronic data, which may be used to identify the holder in relation to the data message and indicate that the holder approves the information contained in the data message.
Certified electronic signature: A signature that identifies the holder and has been created by means that he/she maintains under his/her exclusive control, so that any subsequent modification to the data to which it refers is detectable.
The law recognizes two types of digital signature:
- The digital signature is any set of data attached or logically associated to an electronic document, which allows to verify its integrity, as well as to univocally identify and legally link the author with the electronic document, and.
- Digital certificate is the one issued by a registered certificate, which is currently only one, and it is the Central Bank of Costa Rica. It is the electronic or digital mechanism that can guarantee, confirm, or technically validate the following:
- The legal link between a document, a digital signature and a person.
- The integrity, authenticity, and non-alteration in general of the document, as well as the associated digital signature.
- The authentication or certification of the document and the associated digital signature, only in the case of the exercise of public certification powers.
In our experience, electronic signatures are not used frequently. Most sectors are still reluctant to formalize contracts without a handwritten signature. However, we have observed that the unregulated financial sector is more willing to use this type of signature than the regulated sector. It is worth mentioning that the Superintendency of Banks (the Guatemalan financial supervisor) is implementing a modernization system through which it requires that the documentation of the entities supervised by it, in the event of a communication or management before the regulator, be submitted through a digital platform with advanced electronic signatures. At the moment, the use of electronic signatures in the financial system is, for the most part, for administrative purposes.
We have seen an excellent adoption of simple electronic signatures. We can affirm that the first to start using this tool massively were the financial service providers through their mobile applications, web page and other digital services, which has greatly facilitated the contracting of financial services and products.
Likewise, we have seen a good adoption of the simple electronic signature in the corporate environment for the signature of internal documents, payment slips, among others. Finally, public offices, in compliance with the law, have done a great job modernizing and digitizing many of their services, sending certifications, notifications and other documents using electronic signatures.
Today, several sectors of the economy are using various methods of electronic contracting, especially the institutions of the financial system and others supervised by the National Banking and Insurance Commission.
However, it is necessary to mention that the Courts of Justice do not yet have experience on the subject of electronic contracting, which means that this type of operations entails the risk of being subject to controversy in judicial proceedings.
This implies that we are currently in an “exploratory” phase for these operations in the courts and that brings with it possible risks inherent to such implementation.
In practice, the Firm is aware of complaints from financial users before the General Directorate of Financial User Protection of the CNBS in relation to electronic contracting processes, whereby the regulator recognizes the provisions of the legal framework that allow this form of contracting. Investigations focus on whether electronic contracting processes are clearly regulated in contractual documents, and whether it can be demonstrated that financial users voluntarily knew about and requested services by electronic means.
Today, several sectors of the economy are using various methods of electronic contracting, especially the institutions of the financial system and the other institutions supervised by the National Banking and Insurance Commission.
However, it is necessary to mention that the Courts of Justice do not yet have experience on the subject of electronic contracting, which means that this type of operations entails the risk of being the object of controversy in judicial processes.
This implies that we are currently in an “exploratory” phase for these operations in the courts, which has associated with it the risks inherent to such implementation.
In practice, the Firm is aware of complaints from financial users before the General Directorate of Financial User Protection of the CNBS in relation to electronic contracting processes, through which the regulator recognizes the provisions of the legal framework that allow this form of contracting. The investigations focus on the fact that electronic contracting processes are clearly regulated in the contractual documents, and that it can be demonstrated that financial users voluntarily knew about and requested services by electronic means.
In Costa Rica, the digital signature and certificate are being used both in supervised financial institutions and in the market in general. However, there is some resistance to the use of uncertified digital signatures, since it is the digital certificate that allows determining that the document, electronic message or digital file associated with them is presumed, unless proven otherwise, of the authorship and responsibility of the holder of the corresponding digital certificate, in force at the time of issuance, which provides greater security.
It is important to point out that since 2021 the Law on electronic bills of exchange and promissory notes has been approved, however, its regulations have only recently been approved, so it has not yet been possible to implement it since it requires Centralized Registries authorized by the Superintendence of Securities to register such securities by means of book entries. This law allows the use of digital signature and certificate.
Although the Law for the Recognition of Electronic Communications and Signatures, Decree 47-2008 of the Congress and its reforms grant the same legal value to the advanced electronic signatures as to the handwritten ones, in matters of credit titles, it is not a common practice to formalize them by this means, which could result in that when presenting a credit title with electronic signature for its execution, the judge requires to discuss the validity of the same due to its special nature.
Although there is sufficient support in the legislative framework for the use of electronic signatures in both modalities, to date, there are no jurisprudential criteria on the enforceability of electronic securities, regardless of whether they have been signed with a simple or certified electronic signature. However, in compliance with current legislation, these securities should be accepted and enforceable in court.
We recommend that the user of electronic signatures should be clear about the requirements of each type of signature and the evidentiary effects that they produce, so that this tool can be used appropriately.
It is recommended that certain legal acts and contracts, such as securities and contracts in public deeds, continue to be executed by the traditional methods of a handwritten signature. As mentioned above, the country’s Courts of Justice do not yet have experience in electronic contracting, which means that these types of transactions are at risk of being the subject of controversy in legal proceedings.
Since 2021, the Law on electronic bills of exchange and promissory notes has been approved, however, its regulations have only recently been approved and therefore it has not yet been possible to implement it, since Centralized Registries authorized by the Superintendency of Securities are required to register such securities by means of book entries. This law allows the use of digital signature and certificate.