Legality of eSignatures in Mongolia

Background

Electronic signatures in Mongolia embody both a national commitment to modernization and a global alignment with secure digital commerce, ensuring efficient document authentication and the swift execution of agreements. These digital solutions have enabled transparent and trustworthy contractual processes, facilitating faster transactions and minimizing administrative costs by reducing reliance on paper-based processes. However, it is crucial to understand the key considerations when adopting electronic signatures in Mongolia.

As defined by the law on electronic signatures (2011, amended 2021), an electronic signature shall not be denied legal validity solely on the grounds that it is in electronic form. Also, the legislation provides legal equivalence to handwritten signatures and physical seals, provided the eSignature complies with the legal requirements.¹ Also, it is important to note that certain documents may still require wet-ink signatures, and legal requirements can vary by region; therefore, seeking legal advice is recommended.

Adoption of a reliable electronic signature ensures lawful, sustainable, and secure business practices. Thus, the chosen provider should offer robust security measures, including data encryption, user authentication protocols, and comprehensive audit trails to prevent unauthorized access and uphold the document’s integrity. Services such as BoldSign provide these security measures to meet compliance and safety needs.

In summary, electronic signatures bring substantial advantages. They are widely accepted, yet it is imperative to adhere to legal mandates, prioritize security, and select a user-friendly service to use them effectively in Mongolia.

Forms of electronic signatures

eSignatures or electronic signatures come in various forms, all used to indicate agreement or approval for digital documents and transactions. Here are some common forms:

• Authorizing actions through application login
• Signing with a stylus or finger on a digital tablet
• Entering a name into an email as a signatory
• Confirming agreement on a web page by clicking after verifying the identity prompt
• Appending a digitized image of a handwritten signature
• Voice command

Overview of electronic signature in Mongolia

Electronic signature laws in Mongolia are established on specific technical and legal pillars that align closely with international standards while maintaining local requirements for highly secure digital signatures.

The following laws establish the legal framework for the use, recognition, and enforceability of electronic and digital signatures in Mongolia:

• Law of Mongolia on electronic signature (2011, Amended in 2021)
• Law on electronic documents (2011)
• Civil code of Mongolia,

The law on electronic signatures 2021 is a cornerstone of Mongolia’s digital transformation, ensuring that electronic agreements are legally enforceable, secure, and verifiable. The law provides that eSignatures may be used for documents created, sent, received, stored, or accessed electronically, except those classified as state secrets,² Thus, the law governs the creation, use, storage, and recognition of electronic documents.

The civil code of Mongolia expresses that documents can be concluded electronically and are binding, provided they meet the requirements of authenticity and integrity.³

The law of Mongolia recognizes the following types of eSignatures:

• Simple electronic signatures (SES)
• Digital signatures (Toon garyn)

A simple electronic signature (SES) is any electronic data attached to or logically associated with other data used for authentication.⁴ These include typing your name at the end of an email, scanning and pasting a handwritten signature, and clicking “I agree” on a website; while legally valid, their authenticity must be proven if disputed.

A digital signature is the highest class of electronic signature, created using cryptographic public key infrastructure (PKI) technology, verified by a qualified certificate, and has the same legal status as a handwritten signature. Digital signature must meet the following criteria:⁵

• Statutory compliance certificate at time of signing
• Uniquely linked to the user
• Able to identify the user
• The digital signature must be generated using certified hardware or software that ensures the signer maintains exclusive control over their private key
• Be connected to the data it relates to so that any subsequent change to the data is detectable
• An accredited trust service provider issued a valid certificate at the time of signing
• Signature validation data aligns with the data provided to the relying party
• The distinctive collection of information identifying the certificate’s signatory was accurately conveyed to the entity depending on it

Uniquely linked a person

A secure electronic signature must be uniquely connected to the person using it. The signature must be uniquely generated using methods that only the signer has access to, like a private key and confidential information, to verify their identity.

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. In instances where a pseudonym was employed during the signing process, its use is transparently communicated to the entity, depending on it.

Use and incorporation remain in the signatories’ sole control

The person using the secure 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 signature forgery.

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 IP address, timestamps of key signing events, and location, providing proof of identity, timing, and signature place.

Summary analysis

Validity at the time of signing

Must be fully compliant with Mongolia’s legal requirements for electronic signatures as set out in the Law of Mongolia on electronic signature (2011, Revised 2022). Article 11 specifies that a certificate is effective only from its issuance date to its expiration date. Also, the law states that the certificate must be active in the official database at the exact moment of signing,⁶ A valid certificate must contain:⁷

• The name of the issuing certification service provider (CSP)
• The validity period of the certificate
• The unique identifier or name of the certificate holder
• The certificate’s serial number and date of issue
• Information regarding the associated public key

Accredited service providers

The Ministry of Digital Development and Communication strictly regulates the operations of certification service providers (CSPS) to ensure the integrity of the nation's public key infrastructure.⁸ Digital certificates are issued by the General Authority for State Registration (GSR).

Scope and limitations of electronic signature transactions

Electronic signature transactions and their use are not universally accepted for document finalization. Consequently, there are specific types of transactions and uses for which electronic signatures are suitable, and others are not. Below is an analysis of this matter.

Documents that can be signed

Electronic signatures can be employed to affix signatures and provide countersignatures on a diverse array of documents, such as:

• Human resources
• Procurement
• Non-disclosure agreements (assuming they are contracts, not formal deeds)
• Software license agreements
• Public petitions
• Authenticating emails and electronic invoices
• Online purchase agreements
• Ensuring the receipt of electronic notifications
• Insurance industry
• Educational field, etc.

Exempted transactions

Electronic signature regulations in Mongolia lack an express provision on which class of transactions is exempt from completion using an electronic signature. Caution should, however, be taken when dealing with transactions as below, which tend to be exempted through Mongolian procedural laws:⁹

• Wills and testamentary dispositions
• Codicils
• Family law instruments, e.g., marriage, divorce, or adoption, require specific physical formalities or court-supervised procedures.
• Birth and death certificates
• Transactions requiring mandatory physical notarization
• Transfer of land ownership or real estate rights

To ensure the validity of an electronic signature, it is recommended to adhere to the following best practices while also complying with all relevant legal regulations:

• Verify the identity of the person affixing their signature and, in cases involving a corporate entity, confirm that the person is authorized to legally bind the company with their signature.
• Obtain explicit consent from the person signing electronically, which can be included within the contract itself or through a separate form of acknowledgment, to demonstrate their agreement to sign the document electronically using the chosen method.
• Secure the document against any alterations once the electronic signature has been placed.
• Maintain a detailed record of the signing process, documenting each action performed by the person executing the signature.

How does BoldSign help

The following elements of compliance available within BoldSign can be used to comply with eSignature laws in Mongolia:

• Secure and unique signing link: A secure and unique link to sign a document is sent directly to the signer's email address. This ensures 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 another 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 ensures that the signer is aware of the implications of signing electronically and has given their consent.
• Custom terms: Get 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.

Disclaimer: The information on this page is intended to help businesses understand the legal framework of electronic signatures for this particular country.

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