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11 October 2016
Electronic signatures (e-signatures) provide flexibility and efficiency in cross-border transactions, are virtually accessible from anywhere in the world and, given the advancements in digital signature technology, provide arguably greater security than scanning and emailing wet signatures.
On July 1 2016 the European Union's legal framework for e-signatures came into effect via the eIDAS Regulation.(1)
In comparison, the British Virgin Islands (BVI) passed similar legislation 15 years ago and was one of the first jurisdictions to recognise the validity of e-signatures and electronic records. The BVI Electronic Transactions Act 2001 sets out the requirements for a legally binding e-signature under BVI law. This recognition of e-signatures along with other BVI statutory developments (eg, simplified requirements for the execution of contracts) provides flexibility in cross-border transactions involving BVI companies.
The Electronic Transactions Act defines 'electronic' as electrical, digital, magnetic, optical, electromagnetic, biometric and photonic. In practice, e-signatures may take on a number of forms, including:
E-signatures can be used in most transactions involving a BVI entity or the laws of the British Virgin Islands, with some exceptions.
Director and member resolutions
E-signatures can be used. The BVI Business Companies Act 2004 permits both director and member resolutions of BVI companies to take the form of written resolutions. They must be consented to in writing or by telex, telegram, cable or other written communication. Written resolutions can consist of several documents, including written electronic communications in like form that are each signed or assented to by one or more directors or members (as applicable).
Agreements signed under hand
E-signatures can be used.
The Electronic Transactions Act's definition of legally-binding e-signatures does not currently apply to deeds, although it is anticipated that the BVI legislative authorities will soon redress this to reflect the increasing use and development of e-signatures in the 15 years since the act was introduced.(2) In the absence of statutory guidance on valid e-signatures for deeds, specific BVI legal advice should be sought on a case-by-case basis on the e-signature execution of deeds by a BVI entity.
It is worth noting that:
Under the Electronic Transactions Act, the legal requirement for a signature is satisfied by an e-signature if:
It is also presumed that an e-signature is valid and enforceable if:
Most of today's digital signature technology is designed to meet the requirements set out above, by providing security measures that authenticate the signatory and preserve document integrity.
Notwithstanding the growing attractions of e-signatures, there are a number of other instances in which the use of wet signatures may be more appropriate. These include where:
For further information on this topic please contact Hamish Masson or Kimberley Seagojo at Harney Westwood & Riegels by telephone (+1 284 494 2233) or email (firstname.lastname@example.org or email@example.com). The Harney Westwood & Riegels website can be accessed at www.harneys.com.
Unlike other e-signature legislation which provide for regulations to increase the use of e-signatures, the Electronic Transactions Act provides for regulations to reduce the scope of e-signatures, suggesting that the draftsmen intended to periodically overhaul the legislation to match a fast-evolving technology.
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