Electronic Signature Laws & Regulations - South Korea
Electronic signatures are common in South Korea and are generally well accepted in the business community. They are regularly used to sign general business contracts, employment contracts, leasing agreements and other common types of contracts. Under South Korean law, an electronic signature has the same level of enforceability and admissibility as a “wet signature” provided that the electronic signature meets the legal requirements for validity. The laws around electronic signatures are well understood by South Korean courts and judges, and a number of South Korean court cases have upheld the validity of documents signed electronically.
In South Korea, the legal relationship between electronic documents and electronic transactions executed using electronic signatures is governed by the Framework Act on Electronic Documents and Transactions (FAEDT). The Electronic Signature Act (ESA) sets forth the basic legal framework for using electronic signatures. The ESA was entirely amended on June 9, 2020, and the changes went into effect on December 10, 2020. The ESA defines an electronic signature as a “piece of information in electronic form that is affixed on, or logically combined with, an electronic document in order to identify the signatory and verify that the electronic document has been signed by the said signatory.”
Prior to the 2020 amendment, the ESA discussed two types of electronic signatures: (1) a certified electronic signature and (2) an uncertified electronic signature. A valid certified electronic signature needed to be based on a public key certificate. A public key certificate (as was required for a certified electronic signature) was a certificate that was issued in accordance with Article 15 of the ESA by a licensed certificate authority designated by the Ministry of Science and ICT (MOSIT).
The ESA was amended in 2020 due largely to concerns that the public key certificate, which formed the basis for the certified electronic signatures, was causing market monopolies and restricting the public’s rights to choose between certificate providers. As such, the amended ESA abolishes the public key certificate system, as well as the accompanying concept of the certified electronic signature, to foster an environment in which various electronic signature methods can compete without discrimination. Under the amended ESA, an electronic signature will not be denied validity solely because it is in electronic form. Accordingly, when an electronic signature is selected as a signature, signature and seal, or name and seal pursuant to pertinent regulation or agreement between parties, it shall have the intended effect.
The Amended ESA also introduces an assessment and authorization system for electronic signature certification providers for consistency with international standards, the goal of which is to improve the reliability of electronic signatures and to provide information for selecting an appropriate digital signature authentication service. An electronic signature certification service provider (otherwise known as a Certificate Authority or CA) may now apply for a review by specified reviewing authorities to affirm its compliance with the electronic signature certification service standards. A CA that has obtained such affirmation (known as an affirmed electronic signature certification service provider) may notify others of its compliance with the service standards.
The old ‘public key certificate’ previously issued by the state-chosen licensed certificate authorities has now been renamed to a ‘common key certificate’. These previously state-chosen licensed certificate authorities will be automatically recognized as the affirmed electronic signature certification service providers for one year from December 10, 2020 (the effective date of the Amended ESA). While the following list of affirmed electronic signature certification service providers currently remains at 6, this list can now expand as other CAs become affirmed electronic signature service providers.
Affirmed electronic signature certification service providers:
- Korea Financial Telecommunications and Clearings Institute (http://www.yessign.or.kr);
- Korea Information Certificate Authority (http://www.signgate.com);
- Koscom (http://www.signkorea.com);
- Korean Electronic Certification Authority (http://www.crosscert.com);
- Korea Trade Network (http://www.tradesign.net); and
- Initech Co., Ltd. (http://www.inipass.com/).
Transacting with public sector entities
Neither the ESA nor the FAEDT dictates special requirements for transacting with public authorities unless specifically required by another applicable law or regulation.
Use cases that generally require a traditional signature
Neither the FAEDT nor the ESA expressly prohibit any documents or agreements from being signed electronically. However, under the FAEDT, an electronic document may be denied legal effect if another applicable law or regulation stipulates that the document cannot be signed or executed electronically. The examples provided under the FAEDT are:
- a document showing the intent of the guarantor to provide a guarantee/warranty (Civil Act, Article 428-2(1)) except for those prepared by the guarantor for the purpose of his/her business (FAEDT, Article 4(2)); and
- a holographic will (Civil Act, Article 1066).
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