Panama: New Law On Signatures And Electronic Documents

Last Updated: 19 September 2001
Article by Alexis Herrera Jr.
Electronic Commerce, with international characteristics by its very nature, covers all types of activities, some well known, others completely new. Through the Internet revolution it expands rapidly and goes through radical changes, without exaggerating, on a daily basis.

This activity, subject to the rapid changes already mentioned is creating a whole variety of new types of business, markets and commercial entities. Therefore, it is generating new activities and new sources of income. But at the same time, as is the case with any human activity, by virtue of this commerce and its particular characteristics, it gives rise to and, in time, will increase the number of problems that without legal regulations could create "electronic chaos".

We could attempt to define electronic commerce or "e-commerce" as any type of transaction, activity or exchange of information an goods based on the transmission of data over communication channels performed for the purpose of engaging in acts of commerce.

In this manner, not only does it include the purchase and sale of goods and information, or the rendering of services, but also the prior and subsequent acts in connection with the sale, the furnishing of services or trade. Thus, the above definition includes publicity, the search for information regarding products and suppliers, negotiations in connection with contractual conditions, service to the client, compliance with administrative procedures and cooperation with related enterprises, to quote just a few of the possibilities of such transactions and interchanges.

Electronic commerce may take place from business to business, from business to consumer or within the same organization (or group of organizations) or enterprise (or group of enterprises).

Among the juridical or legal problems that may arise due to electronic commerce we can mention: the validity of legal transactions and contracts without paper; the need of international agreements that harmonize commercial legislation in the different countries; taxes applicable to transactions in cyberspace; the protection of intellectual property rights, the protection to consumers, illegal content and abusive use of information or personal data and/or commercial secrets. In addition, there are others of a criminal nature by virtue of fraud carried on through Internet, the penetration of confidential information or commercial secrets through the same web, serious damages caused by the diffusion of computational viruses, child pornography, etc.

As it is plain to see, electronic commerce gives rise to a great number of problems not only technological but also juridical. Therefore, it is fundamental that private enterprise, as well as the different branches of government, work jointly in the adoption of laws and regulations for electronic commerce, taking into consideration its international nature, so that the interest of each individual, as well as the interest of society, be protected without obstructing the development of commercial activities through electronic means.

Among the first attempts to regulate this complex subject we can mention the model law regarding electronic commerce approved in 1996 by UNCITRAL (United Nations Commission on International Trade Law). This law initiates by taking note of the great number of commercial international transactions that arise through the electronic interchange of data and other means of communications commonly known as "electronic commerce".

The principal purpose of the Model Law of UNCITRAL (hereafter "Model Law") is to facilitate electronic commerce offering a set of rules internationally accepted that may be employed by the states adopting the legislation in order to overcome obstacles and juridical uncertainties that may exist in connection with the use of electronic means of communication in international commerce.

Law No. 43 of July 31, 2001 published in the Official Gazette No. 24,359, as its name indicates, defines and regulates documents and electronic signatures as well as interchange of electronic documents and electronic certification entities.

Before proceeding we believe it is advisable to point out that the law defines an electronic document as "any electronic representation which gives evidence of a fact, image or idea".

In spite of the fact that it is classified as a law that regulates electronic commerce, as pointed out in the introductory recitals which were part of the project that was delivered to the National Assembly, we must not lose sight of the fact that Article 1 of the aforesaid law, when it defines the scope of its regulations, does not limit its application to electronic commerce. Consequently, we are of the opinion that Law No. 43 is applicable to acts and contracts granted or celebrated by means of electronic documents and/or utilizing electronic signatures, whether of a commercial nature or any other type. Through said law, it is sought to give validity and juridical effectiveness to these acts and contracts, provided certain requirements are complied with.

Notwithstanding, it is important to emphasize that the rule in question describes a series of acts, documents and contracts that will not have any validity or juridical effectiveness if they are granted or celebrated by means of documents and electronic signatures. Among these are included public deeds, juridical acts related to Family Law, wills, contracts on immovable (real) property and similar acts that have to be recorded in the Public Registry.

The law, among other things, determines the characteristics that an electronic signature must have in order to consider it legally equivalent to a holographic signature, regulates certificates that guaranty or give faith to the authenticity of electronic signatures, sets forth requirements which the entities must comply with in order to engage in the issuance of these certificates and establishes the degree of responsibility applicable to these entities and to those who require or employ these certificates. Moreover, it establishes the possibility that a notary may certify or authenticate a signature through electronic means.

By virtue of the fact that Law No. 43 contains several inconsistencies and precepts that must be clarified, it is very important that the regulation of same, which must be completed in a period not exceeding six months after its publication, eliminate the incongruencies and make the necessary clarifications within the framework of the law.

We are at your disposal to render any legal advice on e-commerce and/or answer any question of a juridical nature regarding electronic commerce, Internet or the utilization of electronic means in general.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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