COVID-19 Bosnia and Herzegovina Update

E-Signature in Bosnia and Herzegovina

This article provides a general legal overview of the applicable laws and use cases pertaining to electronic signatures in .

Legal framework

Electronic signature has been introduced on the state level in Bosnia and Herzegovina (“BH”) in 2006 with the Law on Electronic Signature (“BH Law”). Due to lack of pre-conditions for implementation of the BH Law (i.e. inexistence of authority in charge to provide the electronic signature), legislators in Republic of Srpska (“RS”) and Brčko District of BH (“BD”) assessed that it is more optimal to adopt a separate law and, in that way, apply the legislation of electronic signature. RS adopted Law on Electronic Signature of RS in 2008, followed by BD in 2015.

Both laws regulate the use of electronic signature in legal operations and other legal actions, as well as the rights, obligations and responsibilities in relation to electronic certificates (verifications) in the same manner as the BH Law. Federation of BH does not have the legislation on electronic signature, as it relies on the Law on Electronic Signature of BH. This contradiction in laws creates doubts whether the electronic signature obtained based on the BH Law could be used in RS or BD, since both RS and BD have their own respective laws.

The Law provides the following three types of electronic signatures:

  • (simple) electronic signature;
  • advanced electronic signature; and
  • qualified electronic signature.

According to the law, an electronic signature shall not be denied legal effect and admissibility as evidence in legal proceedings solely on the grounds that it is in an electronic form or does not meet the requirements of a qualified electronic signature, which is explicitly given the same legal effect as a handwritten signature.

When are electronic signatures allowed?

The BH Law clearly provides that qualified electronic signatures are of the same legal force as handwritten signatures, except in the situations stipulated below under answer number 3.

Use cases where electronic signatures are typically allowed:

  • commercial agreements and documents, including NDAs, LOIs, purchase orders, order confirmations, invoices, sales agreements, distribution agreements, service agreements, loan agreements, lease agreements;
  • consumer agreements, including agreements for purchase of goods and services, consumer loan agreements, lease agreements;
  • intangible property agreements, including license agreements; and
  • HR documents, including employment contracts, NDAs, and notices of termination.

When are electronic signatures not appropriate?

In certain cases, the BH Law explicitly excludes the equivalence of electronic signatures with a written signature.

Such cases that are accordingly not appropriate for electronic signatures include:

  • family law and inheritance law requiring a written form;
  • other statements of will or legal activity for which official certification, judicial or notarial authentication is required;
  • a statement of will or submissions requiring official certification, judicial or notarial authentication or a notarial deed for entry in the land register or other official register; and
  • a statement of guarantees issued by persons in their professional capacity.
Can blockchain technology be used for electronic signatures?

Yes, provided that blockchain technology could satisfy the requirements set out in the legislation that regulates electronic signatures in the BH.

At first glance, it seems that blockchain technology could easily satisfy the requirements for “simple” electronic signatures.

In order for an electronic signature to be recognized as an advanced, it must be (i) uniquely linked to the signatory, (ii) capable of identifying the signatory, (iii) created using electronic signature creation data the signatory can, with a high level of confidence, use under their sole control, and (iv) linked to the data signed therewith in such a way that any subsequent change in data is detectable. There are blockchain frameworks which would not satisfy the above-mentioned criteria by their very nature. For example, certain frameworks employ pseudo-anonymity, so it could be argued these frameworks are not capable of identifying the signatory.

The bar is set even higher for qualified electronic signatures, as these need to satisfy the requirements for advanced electronic signatures and have the signature created by a qualified electronic signature creation device. Whether this is feasible will also largely depend on the individual blockchain framework but does not seem impossible (at least not from a legal perspective).

If you have any questions related to this article, please do not hesitate to contact:

bosnia@karanovicpartners.com

 

The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only. In addition, each electronic signature solution using blockchain or other similar technology should be analysed from a perspective of different legal areas (e.g. especially from the perspective of data privacy).