On 28 July 2020, the Law of 17 July 2020, amending the Law of 14 August 2000 on e-commerce, as amended, was published in the Grand Duchy of Luxembourg’s Official Journal, effective 1 August 2020. (See it here)
The law amends Luxembourg’s Law of 14 August 2000 on e-commerce, making it compliant with Regulation (EU) No. 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC (the “eIDAS Regulation“) (See it here).
Formerly, the Luxembourg law was based on Directive 1999/93/EC on a Community framework for electronic signatures. The eIDAS Regulation, which entered into force on 1 July 2016, repealed the electronic signature directive.
Consequently, the Luxembourg law, based mainly on Directive 1999/93/EC, became incompatible with the eIDAS Regulation on certain issues.
The goal of this new law is to eliminate the inconsistencies and clarify certain aspects of national application of the eIDAS Regulation as follows:
- The terminology used in the new law on electronic signatures is now entirely aligned with that of the eIDAS Regulation (Article 1 of the new law).
- Introduction of a new section (Section II of the new law) on the obligations of “qualified trust service providers” and “unqualified trust service providers”.
→ Companies that provide trust services are either unqualified trust service providers, or qualified trust service providers under the eIDAS Regulation (See the list of trust service providers in Luxembourg here).
- Pursuant to the new Section II, Articles 21bis and 21ter have been inserted. Article 21bis sets forth the obligations for the holder of a qualified certificate for electronic seal.
What exactly is an electronic seal?
It is the equivalent of a company’s classic rubber stamp, which certifies and protects the origin and reliability of data. It is based on the same mechanisms as an electronic signature, but involves neither a commitment nor an obligation by the signatory with respect to the contents of the document. It can be done both automatically and manually, thus simplifying processes for companies.
→ While the electronic seal was already used by certain companies in Luxembourg, it was not yet part of Luxembourg law. Only the obligations under the eIDAS Regulation were taken into account. Today, the new law brings clarification and new rules with which to comply for the companies that use electronic seals, such as the obligation to link it to the signatory’s identity and allow the clear identification of its creator, who has under his/her exclusive control, the electronic seal creation data.
→ Given its high legal recognition, it was important that Luxembourg law bring clarification for its use by companies.
- Introduction and clarification of the obligations of trust service providers (Articles 19 to 26 of the new law):
→ The obligations of trust service providers were slightly amended by the new law to reflect the provisions of the eIDAS Regulation. The new law stipulates that the applicable liability rules are now those under the eIDAS Regulation (e.g., Article 13 of the eIDAS Regulation).
- Introduction of the public service standardization and accreditation entity, the Institut Luxembourgeois de la Normalisation, de l’Accréditation, de la Sécurité et qualité des produits et services (“ILNAS“), as that charged with monitoring Luxembourg’s qualified trust service providers with ex-ante and ex-post monitoring activities.
→ Introduction of detailed provisions on the ILNAS’s role and powers (Article 29 of the new law) as a trust service provider monitoring body, as well as the introduction of a regime of administrative and criminal sanctions (Articles 34bis and 45bis of the new law):
→ The new law allows the ILNAS to impose administrative sanctions ranging from EUR 250 to EUR 15.000 for service providers who refuse to cooperate with the the ILNAS, for example (Article 34bis of the new law).
The new law thus allows users to better understand the applicable rules when deciding to use an electronic signature and go through a trust service provide.
It also reflects current needs that surfaced during the COVID-19 crisis and will facilitate the use of electronic signatures during this increase in teleworking, which sometimes makes signing documents complicated, and push towards the digital.