On 22 June 2023, the National Assembly passed a new Law on E-transactions, set to be effect from 1 July 2024 (LET 2023). The LET 2023 introduces significant changes regarding the use of e-signatures by individuals as outlined below:

1)         Restriction on individuals’ right to create and use of their own e-signature

The LET 2023 categorizes e-signatures into three types as below, none of which encompass e-signatures self-generated by individuals:

• specialized e-signatures (chữ ký điện tử chuyên dùng), which are created and used by organizations for their “own private operations” in accordance with their function and tasks;

• public digital signature (chữ ký số công cộng), which are used for “public activities” and are secured by an e-certificate confirming the public digital signature issued by a qualified service provider; and

• specialized digital signature for official use (chữ ký số chuyên dùng công vụ), which are digital signatures used for official activities and are secured by an e-certificate confirming the specialized digital signature for official use issued by a qualified service provider

Unlike the broader definition of e-signatures under the LET 2005, which may cover signatures self-created by individuals, this classification significantly limits individuals' ability to create and use their own e-signatures. Under the LET 2023, individuals may be required to use a public digital signature issued by a third-party service provider in normal e-transactions.

2)         Ambiguity regarding individuals' specialized e-signatures

On one hand, Article 22.1(a) of the LET 2023 suggests that only organizations can create and use specialized e-signatures for their private operation. The recently issued draft decree on e-signatures and trust service (E-Signature Draft Decree) also contains a form of an e-certificate of secured e-signature (Form No. 03) specifying that the subjects and scope of use of specialized e-signature only include organizations.

On the other hand, E-Signature Draft Decree introduces several provisions indicating that organizations, if qualified, can generate specialized e-signatures for individuals within their system. For example, under the E-Signature Draft Decree, an organization holding a secured specialized e-signature must store information of individuals creating and using specialized e-signatures (Article 15.2), establish a technical system to restore and update information of subscribers (Article 11.2(a)); is entitled to issue an e-signature certificate for others (Article 8). If this view is adopted, this could facilitate e-commerce platforms (e.g., Momo, Lazada) in providing e-signatures to their users for executing transactions on their platforms.

3)         Several forms of e-verification are no longer considered e-signatures under the LET 2023

The LET 2023's classification of e-signatures excludes various forms of e-verification (e.g., OTP, SMS, scanned signatures) from being considered e-signatures. The draftsman of the LET 2023 also confirmed this view (link). This approach seems to be more restrictive than the LET 2005, which considers these types of verification as e-signatures in e-transactions (see further discussion here).

While these e-verification methods do not constitute e-signatures under LET 2023, they may still be recognized as “other electronic authentication means” for showing approval in an e-transaction under Article 22.4 of the LET 2023. Additionally, Article 400.4 of the Civil Code 2015 also supports this perspective by allowing parties to accept contracts through alternative means besides signing. However, one may strictly view that individuals can only utilize such e-verification methods if sector-specific laws explicitly allow since Article 22.4 requires such other electronic authentication forms to be “in accordance with the relevant laws”. If this is the case, an individual will be required to have a specialized e-signature or public digital signature to execute e-contracts, potentially limiting their freedom to choose consent formats, contrary to the principle under Article 4.2 of LET 2023.

This update is written by Trinh Phuong Thao and edited by Nguyen Quang