After six years of preparation, a legal revolution began on 13 February 2013 in Luxembourg with bill n° 6543 on electronic archiving1 .
The system in force is almost a quarter of a century old and no longer fits with the actual needs: this bill is the first step of a long-awaited reform strongly promoted by businesses, professionals of the financial sector and administrations to reduce the use of paper for economic, practical and logistic reasons. Bill n° 6543 introduces a new Law2 , amends the Law of 5 April 1993 on financial services and replaces the Grand Ducal Regulation of 22 December 1986 by a new Grand-Ducal Regulation on the dematerialisation and conservation3 of documents. This new reform is expected to be implemented before the end of this year. On the European side, there is no EU Regulation applicable to electronic archiving. Luxembourg appears to be the first EU country that has initiated such a reform.
The electronic archiving reform's main principles are:
Recognition of the legal value of the dematerialised documents and establishment of legal presumption of the copies' conformity to the original.
This principle is the keystone of the bill. Following article 1333 of the Civil Code, a judge may require the production of an original when a copy is provided by a party, and may reject this copy for the sole reason that only an original is better evidence than an electronic copy. The burden of proof lies with the party who wishes to establish that a copy is in fact a copy of the original.
This could create an unfavourable situation for those professionals who have taken the decision to store all their documents electronically and to destroy originals. Therefore, the Luxembourg Financial Services Authority (CSSF) recommends to financial professionals "not to destroy documents commonly admissible as proof before the courts and which remain principally in paper form4".
The recognition of the legal value of paperless documents will be guaranteed by the future Law and its Regulation to provide holders of stored and/or dematerialised documents legal certainty and confidence in the development of electronic archiving. In this context, two important points are listed in the bill. On the one hand professionals who would be interested to obtain the presumption of the copies' conformity to the original for their stored and/or dematerialised documents will have to liaise with a new type of provider created by the reform: "the dematerialisation and conservation provider or PSDC5" . On the other hand, paperless documents maintained in accordance with applicable legal and regulatory requirements will not be rejected by the judge for the simple fact that they are in electronic form and there is still a paper original: article 1333 of the Civil Code will no longer apply to the electronic archives.
The PSDC will benefit from the legal presumption of the copies' conformity to the original, which results in the reversal of the burden of proof should in the event of litigation. The PSDC will have to be certified by a Conformity Assessment Body (e.g. OLAS)6 and recognised and monitored by the Luxembourg Normalization Institute (ILNAS)7 .
The PSDC is a legal person. This applies to the out-sourced archivers, businesses companies acting for themselves and/or for their groups, the Government and the district or regional councils.
For professionals of the financial sector due to their specific secrecy rules (article 41 of the Law of 5 April 1993 on the Financial Sector), two new specific statuses of PFS (Professionals of the Financial Sector) have been integrated to the Financial Law: the dematerialisation PFS (article 29-5) and the conservation PFS (article 29-6).
The main challenge is to facilitate the transition to the "paperless office" while providing confidence to holders that their archived documents will remain identical and accessible in twenty years whatever the circumstances. These technical archiving requirements are fully described in the new Grand-Ducal Regulation.
In the event of insolvency of their PSDC, documents stored will benefit from certain guarantees against their seizure and holders will be allowed to recover their data.
In line with bill n°6485 modifying article 567 of Code of commerce (cf. previous article on Cloud computing8), holders can claim the return of any copy or original owned and any information relative to the dematerialisation and preservation of the copies.
Kinds of documents impacted by the reform
The documents impacted by the bill are those listed in the article 1334 of the Civil Code (i.e. contracts) and the article 16 of the Code of Commerce (i.e. account plans). The authentic deeds (i.e. notarial acts) are out of the scope of the reform.
Based on the consideration that only 3 to 5% of documents have a legal value, holders will have to categorise in the first instance the legal from the non-legal.
Luxembourg as "information trust center"
This new reform, unique in Europe, will place Luxembourg as "Information Trust Center" and will allow businesses to generate cost savings taking into account that paper storage requires space (expensive) and also handling (also expensive).
These arguments enhances the attractiveness of Luxembourg and can attract multinational companies seeking to centralise their global archiving in one place (i.e. by placing them in a "cloud") in order to ensure better management, lower costs and increased safety.
1 Projet de loi 6543 relatif à l'archivage
électronique et modifiant la loi modifiée du 5 avril
1993 relative au secteur financier.
2. Hereinafter referred to as the « Future Law » Please note that amendments could be made to the draft law during its legislative process.
3. Dematerialisation: replace paper documents by a system in which documents are stored electronically. Conservation: keep a copy or an original digital guaranteeing its integrity.
4. CSSF 2008 Rapport p.158 http://www.cssf.lu/fileadmin/files/Publications/Rapports_annuels/Rapport_2008/RA08_full_eng.pdf
5. Prestataire de Services de Dématérialisation ou de Conservation
6. Office Luxembourgeois de l'Accréditation et de la Surveillance (OLAS)
7. Institut Luxembourgeois de la Normalisation, de l'Accréditation, de la sécurité et qualité des produits et services ( ILNAS)
8. Maître Emmanuelle Ragot « Cloud computing et services financiers » http://www.wildgen.lu/publications/articles/cloud-computing-et-services-financiers
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.