On August 28, 2004, President Hu Jintao signed into law the Electronic Signatures Law of People's Republic of China (“E-SIGN Law”). As the first law concerning electronic commerce in China, the E-SIGN Law undoubtedly has great significance.

•  Scope and Validity

Due to doubts surrounding the security and origin of digital data, Chinese law has not given much status to digital data as a form of evidence. The new E-SIGN Law regulates the validity and provides evidentiary force to electronic documents and electronic signatures for the first time, which provides the legal basis for legal practices in the future. Electronic documents and electronic signatures can now be adopted in all civil documents, except:

•  Any document related to marriage, adoption, inheritance, and other personal relationships;

•  Any document related to the transfer of land, building, and other real estates;

•  Any document related to the stoppage of water supply, heat supply, gas supply, electric supply, and other public services.

•  Any other circumstance where electronic documents are specifically forbidden by laws and regulations.

•  Reliability Requirement

Under the E-SIGN Law, an “Electronic Document” is defined as “an electronic document, which can effectively represent the content thereof, and can be referred to at any time”. The E-SIGN Law also sets forth the requirements for the format and saving of electronic documents, i.e. since the establishment, the electronic documents shall be kept reliably enough to secure the integrity of the content thereof; there is no amendment to the documents; and the sender, receiver, and the time of sending and receiving of the electronic document can be clearly identified.

In addition, the E-SIGN Law also sets forth the elements that establish recognition of the reliability of the electronic document:

•  The reliability in the setting, saving, and transfer of the electronic document;

•  The reliability in the method to keep the integrity of the electronic document;

•  The reliability in the method to identify the sender of the electronic document;

•  Other applicable elements.

As to the reliability of electronic signature, the E-SIGN Law also sets forth some definite rules:

•  The code of electronic signature shall belong to the signer exclusively, when the code is used in an electronic signature;

•  The code of electronic signature shall be controlled by the signer exclusively;

•  Any change to the electronic signature shall be able to be found after signing;

•  Any change to the content and form of electronic documents shall be able to be found after signing.

•  Due-Keeping Requirement

As opposed to general signatures, the E-SIGN Law holds that the signer of electronic signatures shall undertake the obligation of safekeeping of the code of electronic signatures. The signer of an electronic signature shall notify all related parties, as soon as he finds the code's confidentiality has been lost or compromised. Failure to provide such notice can result in the signer being held liable for any damages arising from the compromise or loss.

•  Third-Party Notarization

In order to secure the reliability of electronic signatures, the related parties of electronic signature can request a third party to notarize it. The E-SIGN Law provides regulation for third-party notarization. The E-SIGN Law also sets forth a strict liability to the third-party notarization organization, i.e. the third-party notarization organization shall assume the liability, as long as they fail to prove that they have no fault.

•  Conclusion