What has happened?
Singapore’s “Sign with Singpass” was implemented in November 2020, providing an option for individuals to imprint their signatures on electronic documents. The system uses public key infrastructure technology to trace the signature back to the person who signed the document, with protective mechanisms that prevent tampering with the signatures. [1]
Singapore’s Electronic Transactions Act (Cap 88) acknowledges the use of electronic signatures. [2] Electronic signatures include digital images of a handwritten signature and can also be providing a signature through a stylus and writing on an electronic pad that processes the writing into electronic format. [3]
What does this mean?
This reflects Singapore’s move in maintaining itself as a technologically advanced country through keeping up with the latest technological developments such as the use of electronic bills of lading. A bill of lading is a legal document issued by a shipping freight carrier to a shipper that details the type, quantity and destination of the goods being carried. [4]
However, the Electronic Transactions Act explicitly excludes matters that require wet-ink (physical) signatures such as wills and mortgages. [5]
What does this mean for the legal sector?
The use of electronic signatures brings benefits in the long term.
Firstly, this reduces paper usage. Susan Hwee, UOB’s head of group for technology and operations, notes that “electronic signatures will cut down the use of more than 2 million pages of hardcopy documents each year”. [6] This will help to “save more than 700 trees annually”, [7] therefore contributing to an environmentally friendly outcome. UOB is a pilot for “Sign with Singpass”, allowing Singaporean citizens and residents to provide e-signatures for documents relating to matters such as private wealth planning. [8]
Secondly, using e-signatures as a common practice in Singapore allows it to stay on top of the latest technological developments and global trade law. Sheetal Sandhu of Virtus Law in Singapore noted that electronic signatures will allow Singapore to sail on towards its objective of being a ‘smart nation’. [9] This also comes at a pristine moment to implement such measures given that COVID-19 has forced many activities to go online. In fact, electronic signatures are becoming more prevalently used amongst clientele, as shown in the use of e-signatures amongst Citi Singapore’s private banking clients. The bank reported an increase from 27% in January 2020 to 44% in May 2021. [10]
Thirdly, this prevents the forgery of documents such as bills of lading that used to be in physical documents. By moving documents online, there can be layers of encryption put in place to facilitate the safe provision of signatures.
Nevertheless, there will still be times when physical wet-ink signatures are required. OCBC’s head of group of operations and technology Praveen Raina stated that physical wet-ink signatures continue to be used in more complex transactions such as trade finance as there are “multiple parties which may not recognise the validity of e-signatures”. [11]
Apart from the situations where wet-ink signatures are needed, the safe and convenient use of e-signatures has provided an alternative non-physical method which many are likely to prefer in the era of COVID. This legal advancement is welcome given that the national focus of Singapore is to reduce physical contact as far as possible in the interests of public health and safety.
By Nickolaus Ng
Assessing Firms:
#DentonsRodyk #VirtusLaw #Rajah&Tann #OCBC #UnitedOverseasBank
References:
[1] Kelly Ng, ‘E-signatures on the rise, but wills and mortgages still call for pen and paper’ (Business Times, 5th July 2021)
[2] Infocomm Media Development Authority, ‘The Electronic Transactions Act (Cap 88)’ <https://www.imda.gov.sg/regulations-and-licensing-listing/electronic-transactions-act-and-regulations>
[3] LaserFische, ‘What’s the difference between wet, digital, and electronic signatures?’ <https://www.laserfiche.com/ecmblog/whats-the-difference-between-wet-digital-and-electronic-signatures/>
[4] Evan Tarver, ‘Bill of Lading’ <https://www.investopedia.com/terms/b/billoflading.asp>
[5] Electronic Transactions Act (Cap 88) First Schedule - “Matters Excluded by Section 4”
[6] Kelly (n1)
[7] ibid
[8] ibid
[9] ibid
[10] ibid
[11] ibid
Disclaimer: This article (and any information accessed through links in this article) is provided for information purposes only and does not constitute legal advice.