The Act on Electronic Commercial Services and on Certain Legal Aspects of Information Society Services (108/2001) became effective on January 23 2002. The act regulates e-commerce and information society services in accordance with the E-commerce Directive (2000/31/EC). It provides that where legislation requires that a document be retained in original format, the document can also be retained in electronic form, as long as this complies with the legal regulations on electronic record management and digital archives. The act authorizes the minister of the Office of the Prime Minister and the minister of traffic and telecommunications to establish these regulations, but they have not yet been enacted.
The rules on the retention of electronic documents will have some impact in the area of government administration, but will have most significance in the private sector where legal regulations require that documents of a certain kind be retained.
The record management activities of government agencies are governed by particular record management regulations elaborated on the basis of the Government Decree on the Model Rules of Record Management for Ministries and Central Agencies (40/1998). The model rules set out in this decree apply to all paper and electronic records managed manually or electronically, except where otherwise provided by law. All records received and sent using software which has been registered on a computer network are deemed electronic records. Access rights, authentication procedures and the competent authorities in this area will be determined by the particular record management regulations.
All electronic records, information on their management and registration data must be held on the same network. The data's future accessibility and usability must be guaranteed, even if this involves switching or modifying systems. If these requirements cannot be met, an authenticated, durable hard copy must be prepared; alternatively, an official statement that existing hard copies conform to the original electronic records in form as well as content must be obtained. This rule also applies where an electronic record is placed in a public archive that does not meet the necessary technical requirements. The selection and destruction of electronic records are governed by the same rules as apply to traditional, paper-based records.
Since the model rules regulate the management of electronic records in government agencies, the impending legislation on digital archives will have the greatest impact on data management activities within the private sector. Private entities are legally required to retain original documents or copies during their business and other activities, and this is also useful for evidentiary purposes in the case of legal disputes. The retention of electronic documents instead of paper copies may prove an easier and cheaper alternative in cases where the original document was created electronically or can be digitized.
Some existing acts have already specified detailed requirements which apply to digital archives. For example, Section 169(5) of the Accountancy Act (100/2000) provides that documents may be retained in electronic format if the particular platform (i) permits the swift retrieval of all information contained in the original document in a legible format, and (ii) precludes the stored documents from being manipulated or corrupted. The rules for using electronic documents and instruments, including those relating to authenticity and reliability, are governed by the Electronic Signatures Act. For accounting purposes, electronic documents which bear a qualified electronic signature and time stamp will be accepted, as long as (i) they satisfy the requirements set out in the Accountancy Act, and (ii) the validity of the certificate issued by the certification service provider can be assured for a period of 10 years in the case of the annual report and eight years in the case of other accounting documents.
However, there are numerous other legal regulations which require the retention of documents without providing specific rules on how electronic documents should be retained. The absence of specific regulation on electronic record management and digital archives has proved an obstacle to the widespread use of information society services. Private entities continue to be reluctant to engage in e-commerce for fear that future legislation will require the use of different systems to those employed in the meantime, even though the regulations are expected to be technology neutral. However, taking the initiative in this area could have significant benefits: self-regulation may prompt the ministers to follow market developments when drafting the regulations, rather than establishing their own framework for such activities.
So far, the absence of legislation on the retention of electronic records has hindered the development of e-commerce. The impending legislation is expected to improve this situation by setting forth general rules for all record retention activities required by law. The legislation, which will follow European regulations on the subject, should encourage the widespread use of information society services by enabling private entities to comply with legal regulations on record retention when using electronic records.
For further information on this topic please contact András László or Judit Budai at Szecskay Law Firm/Moquet Borde by telephone (+36 1 353 1255) or by fax (+36 1 353 1229) or by email ([email protected]).