Member Article

The Standing Committee of the 10th National People's Congress passed the Law of the People's Republic of China on Electronic Signatures on 28 August 2004. The Law, which was promulgated on 28 August by President Hu Jintao, will enter into effect on 1 April 2005 and provides a legal basis for electronic transactions. Electronic data text The Law applies to electronic signatures in electronic data text. Electronic data text includes all information which is created, transmitted, received or saved electronically, optically, magnetically or by similar means. The Law provides that parties to civil contracts are free to decide whether or not to use electronic signatures and electronic data text. However, certain types of agreements such as those relating to marriage or the assignment of immovable property may not take the form of electronic data text. The Law specifies the requirements of electronic data text for satisfying the legal requirements of written documents or original documents. An important requirement is that the electronic data text must be capable of expressing its content in tangible form and can be retrieved and consulted at any time. An electronic data text will be deemed to have been sent by the sender if: • it has been sent with the authority of the sender; • it has been sent automatically by the information system of the sender; and • the recipient has verified it through a method recognised by the sender. Electronic signature The Law provides that an electronic signature is reliable if: • at the time the data for making the electronic signature was used for the electronic signature, it belonged exclusively to the signer; • at the time of the signature, the data for making the electronic signature was under the sole control of the signer; • it is possible to discover any changes to the electronic signature that are made after the signature was placed; and • it is possible to discover any changes to the content or form of the electronic data text that are made after the signature was placed. Parties are also permitted to agree among themselves what constitutes a reliable electronic signature. The Law provides that a reliable electronic signature has the same legal effect as a signature made by hand or a seal. The law also grants legal effect to electronic contracts with public utility providers. However, public utility providers are prohibited from suspending services like water, electricity or gas by electronic notice. Electronic certification providers The Law sets forth the requirements which electronic certification providers must satisfy. Electronic certification providers must be approved by the Ministry of Information Industry.