Electronic Signatures – Doing Business Remotely in Serbia

July 01, 2020

Electronic Signatures – Doing Business Remotely in Serbia

July 01, 2020

Radovan Grbović

Radovan Grbović

Partner

Vanja Vujnović

Vanja Vujnović

Senior Associate

Recently we have received many inquiries from our clients regarding the e-signature regulations applicable in Serbia.  The possibility of using an electronic signature has been especially explored since the outbreak of COVID 19 pandemic, due to the fact that working from home and social distancing have become a part of our everyday life.  Below you will find some key considerations regarding the use of electronic signatures in Serbia.

 

The Legal Status and Validity of Electronic Signature Under Serbian Law

 

Serbian Law on Electronic Document, Electronic Identification and Trust Services in Electronic Business (“Act”) distinguishes three different types of electronic signatures, namely:

  1. a simple electronic signature;
  2. an advanced electronic signature;
  3. qualified electronic signature.

In comparison to the simple electronic signature, an advanced electronic signature is an electronic signature that meets additional conditions for providing a higher level of reliability of verification of data integrity and identity of signatories in accordance with this Act. The Act requires that advanced electronic signature must meet the following requirements:

  1. Be uniquely linked to the signatory
  2. Capable of identifying the signatory
  3. Created using electronic signature creation data that the signatory can, with a high level of confidence, use under his sole control.
  4. Linked to the data signed in such a way that any subsequent change in the data is detectable

Finally, a qualified electronic signature is an advanced electronic signature created by a certified institution, and it is based on a qualified electronic signature certificate.

Qualified electronic signature has the same legal effect as a handwritten signature. The Act provides that validity and probative force of an electronic signature cannot be denied only because it is in electronic form, or because it does not meet requirements for the qualified electronic signature.

In addition, pursuant to provisions concerning electronic signature, the Act stipulates that an electronic document can be denied its validity, probative force, or the written form only because it is made in electronic form.

In case of a qualified electronic signature, its authenticity is presumed, while for the simple and advanced electronic signatures the burden of proof for proving the authenticity of the electronic signature lies with a person claiming its authenticity.

 

Use Cases

 

Electronic signatures can be typically used for signing:

  1. purchase orders, invoices;
  2. agreements (commercial agreements, lease agreements, consumer agreements, etc.);
  3. HR documents (*please see practical considerations below)

In some instances, the qualified electronic signature is expressly required. This is, for example, the case with the documentation submitted to the Serbian Business Registers Agency for the purposes of submitting annual financial statements, registration of an ultimate beneficial owner, and registration forms for the incorporation of a company.

However, the Act explicitly provides that the use of electronic signature is not possible in agreements and other legal affairs where a special regulation provides that the signature or a documents needs to be publicly certified or notarized. These are all legal transactions:

  1. for transferring property rights to real estate or establishing other property rights on real estate (for example mortgages);
  2. regulated by inheritance law (life care agreements, testaments);
  3. agreements governing property relations between spouses;
  4. share purchase agreements;
  5. share pledge agreements

 

Practical Considerations

 

In Serbia generally, there is little to no case law regarding the use of simple and advanced electronic signatures.

In recent years companies worldwide started moving away from virtual electronic signings in favour of electronic signature platforms (such as for example DocuSign and Adobe Sign). These platforms create electronic signatures that offer greater authenticity and security than a scanned signature. Most of these platforms offer their users simple and advanced signatures defined under the Act and eIDAS.  However, there is no case law on this point, which makes it difficult to provide an accurate analysis of how the court would treat agreements that have to be executed in a written form pursuant to the statutory provisions but are signed within the electronic signature platforms. What is certain is that the signatures offered by the mentioned platforms cannot be considered qualified electronic signatures under Serbian law since these platforms are not recognized as authorized certification authorities in Serbia.

As for the HR documentation, the Serbian Employment Act (“SEA”) indirectly limits the use of electronic signatures.  Namely, from the wording of the provisions of the SEA, the documents such as employment contract, amendments to the employment contract and termination letter should be signed by both parties and delivered personally or by recommended shipment service to the employee. This practically means that these documents should be signed with a qualified electronic signature by the employer and employee and electronically delivered in accordance with the provisions of the Act. Bearing in mind that qualified electronic signature and electronic delivery are generally not used by the companies and that there is no practice on this point, these documents should be signed with “wet ink signature”.

In the absence of an established practice regarding electronic signatures in Serbia, the electronic signatures should be used carefully. Simple and advanced electronic signatures should generally suffice for relatively simple and routine transactions. More complex transactions that require a higher degree of security will generally necessitate at least a qualified electronic signature or a wet ink signature in order to minimize the risks. It is important to bear in mind when considering the validity of an electronic signature the court would always look at the individual circumstances before adjudging if a particular document is validly executed.

 

 

This text is for informational purposes only and should not be considered legal advice. Should you require any additional information, feel free to contact us.

Contact:

Radovan Grbović, Partner
radovan.grbovic@sog.rs

Vanja Vujnović, Senior Associate
vanja.vujnovic@sog.rs

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