Legality of eSignatures in Iceland
IN THIS PAGE
- Background
- What is an electronic signature
- Overview of electronic signatures regulatory framework in Iceland
- Validity standards of an advanced electronic signature
- Summary analysis
- The Scope and limitations of electronic signature transactions
- Cases where only qualified electronic signature and wet-ink signature are authentic
- Summary scope of limitation
- How does BoldSign help
Background
The advent of electronic signatures has transformed document authentication processes by enhancing efficiency across Iceland and globally. These digital solutions facilitate expedited business dealings. Nevertheless, it is crucial to comprehend the essential factors involved in deploying electronic signatures in Iceland.
It is imperative for organizations and individuals to choose an electronic signature system that complies with Icelandic regulations, especially Act No. 55/2019. This law equates the validity of electronic signatures to that of their physical counterparts. However, certain documents may still require a manual signature, and legal requirements can vary by area, making it wise to seek legal advice.
Ensuring the security of the electronic signing process is paramount. The selected platform must deliver robust security features, such as encryption, authentication protocols, and comprehensive audit trails, to deter unauthorized access and maintain the integrity of the document. BoldSign is designed to offer these critical security assurances, fulfilling both compliance and security standards.
To sum up, electronic signatures offer considerable advantages. They are widely accepted, yet adherence to legal norms, prioritization of security, and the choice of a user-friendly system are essential for their successful application in Iceland.
What is an electronic signature
An electronic signature is an assortment of electronic data attached to, integrated with, or logically connected to other electronic data intended to identify the signatory. These signatures have the same legal status as handwritten signatures, provided they are securely associated with the signatory and safeguarded against alteration or forgery. Fulfilling these conditions grants electronic signatures equivalent legal standing to traditional signatures.
Overview of electronic signatures regulatory framework in Iceland
Electronic signatures are considered just as valid as traditional wet-ink signatures; however, their use is subject to specific regulations spelled out in:
- Iceland Act No. 55/20191
- Regulation No. 100/2020 as amended by No. 310/2020, 314/2020 & 582/20232
- Act No 30/2002 on Electronic Commerce and other Electronic Services3
- Regulation (E.C.) No. 910/2014 (eIDAS)4
Despite not being a member of the European Community, Iceland has established strong connections with the European common market. As a result of these connections, Iceland has incorporated Regulation No. 910/2014 into its national framework, which pertains to electronic transactions and identification systems5.
The regulations categorize the signatures into three types (Art 3 of eIDAS regulation):
- Standard Electronic Signature
- Advanced Electronic Signatures
- Qualified Electronic Signatures
A standard electronic signature is electronic data that accompanies or logically relates to other electronic data and is used to verify from whom the latter data originates.
An advanced electronic signature is defined as an electronic signature that6:
- Relates to a signatory alone.
- Is capable of identifying the signatories.
- Brought about by a method under the sole custody of the signatories.
- Is linked to the data so that any change in them after signing is visible.
A qualified electronic signature is an advanced electronic signature based on a qualified certificate and developed by a secure signature creation device.7 Article 328 of the eIDAS sets out a validation set of standards to be met by the one for a qualified electronic signature. These are:
Validity standards of an advanced electronic signature
Uniquely linked to a person
An advanced electronic signature must be uniquely connected to the person using it. The signature must be uniquely made with methods only the signer can access, like a private key and confidential info, to verify their identity.
Use and incorporation remaining in their sole control
The person using the advanced electronic signature must have sole control over the means of creating the signature. Typically, this requires managing a key pair or two-factor authentication, with the signer exclusively holding the private key to prevent unauthorized signature forgery.
Identify the signers
The process used to create the signature must be capable of identifying the person signing. This may include using a biometric signature, Personal Identification Number (PIN), email address, or company registration number.
Track down any alterations made after signing
It is essential to preserve the authenticity of the signed document. Modifications made to the document post-signature should be identifiable. This is commonly accomplished through an audit trail. Audit trails record the signer’s I.P. address, timestamps of key signing events, and location, providing proof of identity, timing, and place of signature.
Summary analysis
Under Iceland Act No. 55/2019, Regulation No. 100/2020 as amended by No. 310/2020, 314/2020 & 582/2023, Act No 30/2002 on Electronic Commerce and other Electronic Services, and Regulation (E.C.) No. 910/2014 (eIDAS)
Types of signature
Unique feature
Legal validity
Standard Electronic Signature
N/A
Advanced Electronic Signature
- Uniquely linked to the signatory.
- Capable of identifying the signatory.
- Developed using a means that the signatory can maintain under his sole control.
- Linked to the data to which it relates so that any subsequent change in the data is detectable.
Qualified Electronic Signature
- Meets the unique feature of Advanced Electronic Signature.
- Based on a qualified certificate issued by a licensed certification authority.
- Created by a secure creation device.
Valid unless the contrary is proven.
| Types of signature | Unique feature | Legal validity |
|---|---|---|
| Standard Electronic Signature | N/A | Depends on the evidentiary weight. |
| Advanced Electronic Signature |
| |
| Qualified Electronic Signature |
| Valid unless the contrary is proven. |
The Scope and limitations of electronic signature transactions
Documents that can be signed
- Human Resources
- Procurement
- Non-Disclosure Agreements (assuming they are contracts, not formal deeds)
- Software License Agreements
- Insurance Industry
- Educational Field, etc.
Cases where only qualified electronic signature and wet-ink signature are authentic
Under Article 25 of the eIDAS9, Qualified electronic signatures are deemed to bear the same legal validity granted to wet-ink signatures. As such, the following can only be signed in either wet ink signature or qualified electronic signature
- Residential Lease Agreements10
- Termination of Employment agreements11
- Memorandum of Association for companies12
- Request for Deprivation of legal competence13
- Subpoenas and defense statements in civil and criminal cases14
- Insurance contracts15
- Customs Declaration16
- Data Processing Agreements between the controller and processor.17
Exempted transactions
The Iceland electronic commerce regulation under Articles 1 and 818 limiting the scope of electronic transactions exempts the following transactions from completion in electronic signatures:
- Taxation
- Transactions relating to the protection of personal data.
- Unlawful collusion or concerted practices.
- Representation by legal counsel in courts.
- Gambling activities relating to wagering money in games of chance.
- Public notaries to the extent that such activities relate to the exercise of public authority.
- Contracts under family law and the law of succession.
- Contracts requiring stamps and contracts that create or transfer rights in real estate, except for rental rights.
Summary scope of limitation
Permissible
Exempted
Any type of electronic signature
- Human Resources
- Procurement
- Non-Disclosure Agreements (assuming they are contracts, not formal deeds)
- Software License Agreements
- Insurance Industry
- Educational Field, etc.
Qualified electronic signature
- Residential Lease Agreements
- Termination of employment agreements
- Memorandum of Association for companies.
- Request for deprivation of legal competence.
- Subpoenas and defense statements in civil and criminal cases.
- Insurance contracts
- Customs Declaration
- Data Processing Agreements between the controller and processor.
- Taxation
- Transactions relating to the protection of personal data.
- Unlawful collusion or concerted practices.
- Representation by legal counsel in courts.
- Gambling activities relating to wagering money in games of chance.
- Public notaries to the extent that such activities relate to the exercise of public authority.
- Contracts under family law and the law of succession.
- Contracts requiring stamps and contracts that create or transfer rights in real estate, except for rental rights.
| Permissible | Exempted | |
|---|---|---|
| Any type of electronic signature | Qualified electronic signature |
|
|
| |
To guarantee the legitimacy of an electronic signature, it is recommended to adhere to the following best practices while also ensuring compliance with all relevant legal obligations:
- Verify the identity of the person signing and, in companies, confirm that the individual is legally authorized to commit the company with their signature.
- Obtain explicit consent from the person signing, which can be included in the contract itself or provided through a separate consent document, acknowledging their intent to use the chosen electronic signature method for the document.
- Safeguard the document against any alterations post-application of the electronic signature.
- Maintain a detailed record of the signing process, documenting each action performed by the person executing the signature.
How does BoldSign help
- Confirm the signer’s identity and, in business dealings, verify that the individual is duly authorized to act on behalf of the company in affixing their signature.
- Secure explicit agreement from the individual signing, which may be incorporated in the contract itself or in a separate accord, to signify their intention to use the specified electronic signature for the document in question.
- Safeguard the document to prevent any modifications after the signature is applied.
- Keep an exhaustive log of the signing procedure, recording each step the signer performs.
The following elements of compliance available within BoldSign can be used to comply with Iceland electronic signature laws:
- Secure and unique signing link: A secure and unique link to sign a document is sent directly to the signer’s email address. This helps ensure that the document is only accessed by the intended signer and cannot be tampered with.
- Password protection: Senders can specify a password that needs to be entered before viewing and signing a document. This adds a layer of security to the signing process.
- Audit trail: The IP address of the signer and timestamps for all significant events in the signing process are recorded in an audit trail. This provides a record of who signed the document, when, and where.
- Digital signature: The final document is digitally signed with an AATL-compliant certificate. This ensures that the document cannot be tampered with without invalidating the signature.
- Consent: Signers are asked to confirm their intent to sign electronically and informed that they could opt out. This helps ensure that the signer is aware of the implications of signing electronically and has consented to do so.
- Custom terms: Getting your signers to agree to a custom set of terms. This can be useful to ensure additional security or that the signer understands the terms of the document.
- QES compliance: BoldSign offers fully compliant qualified electronic signatures (QES) that are simple, secure, and legally binding across the EU. QES guarantees that your essential documents are protected with the highest level of e-signature security, giving you peace of mind in your digital transactions. Using BoldSign, you can confidently manage your important documents while ensuring compliance with EU regulations.
Disclaimer: The information on this page is intended to help businesses understand the legal framework of electronic signatures for this particular country.
However, Syncfusion, its officers, directors, stockholders, affiliates, attorneys, accountants, employees, or agents cannot provide legal advice. You should consult your personal attorney regarding your specific legal questions. Laws and regulations change frequently, and this information may not be current or accurate. To the maximum extent permitted by law, Syncfusion provides this material on an “as-is” basis. Syncfusion disclaims and makes no representation or warranty of any kind with respect to this material, express, implied, or statutory, including representations, guarantees, or warranties of merchantability, fitness for a particular purpose, or accuracy.
Syncfusion makes no warranties of any kind, including but not limited to respect to the information or the product, whether express, implied, statutory, or otherwise. To the maximum extent permitted by law, Syncfusion disclaims all conditions, representations, and warranties, whether express, implied, or statutory, with respect to this information without limitation any implied warranty of merchantability, fitness for a particular purpose, accuracy, or currentness of this information.
Syncfusion nor their officers, directors, stockholders, employees, affiliates, attorneys, accountants, or agents shall be liable for indemnification, nor does this create an express or implied, contractual or statutory, equitable or otherwise, under this Agreement. The officers, directors, stockholders, affiliates, attorneys, accountants, or agents will not have any liability in any form.
1 Law on Electronic Identification and Trust Services for Electronic Commerce No. 55/2019 [https://www.stjornartidindi.is/Advert.aspx?RecordID=64389e1a-d2d3-4b1c-8d91-f74afdb25787]
2 Regulation 100/2020 on Electronic Identification and Trust Services for Electronic Transactions [https://www.reglugerd.is/reglugerdir/eftir-raduneytum/hin/nr/21816]
3 Merchants and Trade – Act No 30/2002 on Electronic Commerce and other Electronic Services – [act-no-30-2002-on-electronic-commerce-and-other-electronic-services.pdf (stjornarradid.is)]
4 Regulation (EU) No 910/2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC – [https://eur-lex.europa.eu/eli/reg/2014/910/oj]
5 Law on Electronic Identification and Trust Services for Electronic Commerce No. 55/2019. Art. 2 [https://www.stjornartidindi.is/Advert.aspx?RecordID=64389e1a-d2d3-4b1c-8d91-f74afdb25787]
6 Ibid Art. 3(10) as read with Regulation 910/2014. Art. 3(11)
7 Regulation (E.U) 910/2014 Art. 3 (12) [http://data.europa.eu/eli/reg/2014/910/oj]
8 Ibid Art. 32
9 Regulation (EU) No 910/2014 Of The European Parliament and of the Council, S. 4, Art. 25 [https://eur-lex.europa.eu/eli/reg/2014/910/oj]
10 Rent Act No 36/1994, Art. 4 [https://www.government.is/media/velferdarraduneyti-media/media/acrobat-enskar_sidur/Rent-Act-36-1994-with-subsequent-amendments-2016.pdf]
11 Act No 19/1979 Respecting Labourers’ Right to Advance Notice of Termination of Employment etc. Art. [https://www.asi.is/media/253001/l-19_1979.pdf]
12 Act No 2/1995 On Public Limited Companies, Art. 3 [Https://Www.Government.Is/Library/04-Legislation/Act%20No%202-1995.Pdf]
13 Act No 71/1997 On Legal Competence, Art. 8 [Https://Www.Humanrights.Is/En/Moya/Page/Act-On-Legal-Competence-No-71-1997]
14 Act No 91/1991 on Civil Procedure and Act No 77/2008 on Criminal Procedure [https://www.government.is/library/01-Ministries/Ministry-of-Justice/Code%20of%20Civil%20Procedure%20No.%2091,%2031%20December%201991..pdf & https://www.government.is/lisalib/getfile.aspx?itemid=bc7cb7af-0572-11ea-9450-005056bc4d74]
15 Insurance Contracts No 30/2004, Art. 15 [Https://En.Fme.Is/Media/Utgefid-Efni/56-2010-IS-EN-Unofficial.Pdf]
16 Customs Act No 88/2005, Art. 23 [The Icelandic Customs Act, No. 88/2005 (wipo.int)]
17 Data Processing Act No 90/2018, Art. 13 [https://www.personuvernd.is/media/uncategorized/Act_No_90_2018_on_Data_Protection_and_the_Processing_of_Personal_Data.pdf]
18 Act No 30/2002 on Electronic Commerce and other Electronic Services, Art. 1 [https://www.stjornarradid.is/media/atvinnuvegaraduneyti-media/media/Acrobat/Act-No-30-2002-on-Electronic-Commerce-and-other-Electronic-Services.pdf]
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