The Regulation of the Council of Ministers of 9 March 2020 on Documents Connected with Banking Activities on IT Data Carriers enters into force on 19 September 2020. This is a good occasion to discuss the expanded legal significance of the electronic seal.
The new regulation supersedes the prior executive regulation under Art. 7 of the Polish Banking Law. The noteworthy features of the new regulation include the systemic consolidation of the terminology through introduction of concepts consistent with the EU’s eIDAS Regulation (910/2014) and a direct reference to distributed ledger technology. (I will address the treatment of this technology in a separate article.)
It appears that inclusion in the new Polish regulation of terminology consistent with the eIDAS Regulation is more than a mere technicality. A closer analysis of the provisions raises the question of whether the regulation in fact expands the legal significance of the electronic seal.
An electronic seal is an interesting and perhaps underappreciated tool that can improve the efficiency of the digital economy. I recently had an opportunity take part in the deliberations of a working group operating under the aegis of the Ministry of Digital Affairs and the Coalition for Polish Innovation exploring the possibility of expanding the legal significance of the electronic seal. We identified particular potential of the electronic seal in the context of automated trade. These efforts led to the drafting of working materials (available here). While expansion of the legal significance of the electronic seal seems like an interesting idea, it was also obvious to us that such a procedure would require major systemic changes in the existing regulations. Meanwhile, the modest change in the executive regulations under Art. 7 of the Banking Law may prove the first step in expanding the legal significance of the electronic seal.
Currently this seal has a significance framed first and foremost by the eIDAS Regulation. From the technological side, it is an instrument very similar to the electronic signature. As in the case of signatures, the eIDAS Regulation distinguishes between three categories of seals. Despite the similarities, the legal consequences of using an electronic seal and using an electronic signature are regulated differently. According to Art. 35(2) of the eIDAS Regulation, “A qualified electronic seal shall enjoy the presumption of integrity of the data and of correctness of the origin of that data to which the qualified electronic seal is linked.” In turn, Art. 25(2) provides, “A qualified electronic signature shall have the equivalent legal effect of a handwritten signature.”
The rules set forth in the eIDAS Regulation are reflected in the Polish Civil Code. Under Civil Code Art. 781, a declaration of will made in electronic form (and thus using a qualified electronic signature) is equivalent to a declaration of will made in writing. Therefore an electronic signature may be used to perform a legal action that requires written form. The absence of a comparable provision with respect to the electronic seal means that this instrument cannot be used to perform legal actions that require written form. This does not mean, however, that such a seal cannot be used at all to carry out legal actions. It appears that in light of the general rule set forth in Civil Code Art. 60 (“Subject to the exceptions provided for in this act, the will of a person carrying out a legal transaction may be expressed by any behaviour of the person that adequately discloses the person’s will, including disclosure of that will in electronic form”), it cannot be excluded that an electronic seal may be an instrument for effective submission of declarations of will. The limits for use of this instrument will be indicated by the specific requirements as to the form of particular legal actions.
The executive regulation clearly determines that an electronic seal may be used to create documents connected with banking activities on IT data carriers. Such a document may be created by recording data connected with one or more banking activities on an electronic document, and affixing to the document an electronic signature or electronic seal. This provision permits the creation of documents using any electronic seal, but use of a seal other than a qualified seal for this purpose requires an agreement of the parties.
This provision assumes its full importance in light of Art. 7 of the Banking Law. Art. 7(1) provides, “Declarations of will connected with performance of banking activities may be made in electronic form.” Art. 7(3), in turn, states, “If the act provides for written form for an activity, it shall be deemed that an activity made in the form referred to in par. 1 meets the requirement of written form also when this form is provided for under pain of invalidity.” It is quite consistently accepted in the legal literature that this provision (although not perfectly worded, as it cross-references only Art. 7(1) of the Banking Law) should be interpreted as referring to an action taken, and documents prepared, in accordance with the executive regulation issued under Art. 7 of the Banking Law.
After entry into force of the executive regulation, this interpretation of Art. 7(3) will mean that a legal action made using an electronic seal in compliance with the executive regulation can fulfil the requirement of written form. This would thus carry out a practical expansion of the legal significance of an electronic seal. This would be limited to a certain category of legal actions, but would nonetheless constitute a material modification of the existing rules governing this instrument. The next few months should reveal whether the legal literature and commercial practice are prepared to accept such an interpretation of Art. 7 of the Banking Law and the new executive regulation.