Friday, November 03, 2006

What Exactly is an Electronic Signature

Customs recently issued a ruling quite wisely stating that an electronic signature would be acceptable on a NAFTA certificate of origin. OK, fine. This is hardly newsworthy since copies of COs are acceptable.

The interesting thing here is the distinction between a run of the mill electronic signature and a digital signature. The electronic signature at issue in the ruling was a bit map graphic of a handwritten signature. For all intents and purposes, it is the digital equivalent of a rubber stamp and ink pad signature.

Don't get me wrong. I think the ruling is fine. There is no reason to require that a human being take a pen in hand and make his or her mark on the document to authenticate it. Customs correctly noted that the law has long recognized that anything placed upon a document with the intent that it signify that the person making mark agrees to the contents, is a signature. That is why illiterate people used to "make their mark" with an X on a document or why a thumb print is a perfectly good signature. The NAFTA CO is not such a unique or important document that it requires an original signature. Frankly, this day and age, it is increasingly difficult to think of any documents that should require a physical signature. I recently renewed my license to practice law completely via the internet without signing a single document. Every time you make a purchase online, you "sign" the charge receipt when you complete the transaction. The Court of International Trade has almost fully implemented the electronic filing of documents with true electronic signatures and no physical ones.

A true digital signature is a code usually consisting of many alphanumeric characters that bears a complex mathematical relationship to the contents of the document. As a result, with good electronic signature technology, it is possible to determine whether the document has changed since the original signing. The BMP facsimile signature does not do that.

Why do I point this out? Because real people in real industry want to eliminate the paper NAFTA CO entirely and let suppliers provide the relevant data via a secure web interface. The data could then be digitally signed to prove its authenticity and preserve its integrity. From there, the company could use the data in its own compliance processes without having to re-key it. If a NAFTA verification were to be necessary, the company could produce all the relevant data in a report or, if requireed to do so, run it off on paper CO forms. The only thing missing would be a physical signature or something looking like a physical signature.

In the past, I have read the regulations to require a paper CO. Given this ruling, I am not sure that is the case. With a true digital signature, the data is authenticated and secure. The name of the certifier can be printed in the signature block of a paper CO as necessary. What is missing from this system in terms of compliance? Nothing. Perhaps someone should request a ruling to confirm that a paperless CO system is acceptable.

After that, I will move on to getting rid of the official posting of liquidation notices.


Anonymous said...

Interesting blog you got here. It would be great to read a bit more about that matter. The only thing it would also be great to see on this blog is a photo of any device.

e signature said...

Well, i would say that the ruling is absolutely fine. Electronic signatures are just the digital equivalent of a rubber stamp and ink pad signature.On the contaray, digital signatures offer enhanced security and authentication and involves a third party to approve it.

amy said...

Electronic Signature are based on encryption which insures the authenticity of the documents being sent or are to be sent. Now encryption is the process of transferring a data from one computer to another, whereby the data that is sent gets encoded into a form that only the other computer can decode for further processing.