EU ministers move to create e-commerce environment

The European Union took a significant step towards creating a viable electronic commerce environment as telecommunication ministers agreed a draft directive on electronic signatures in Luxembourg yesterday.

The signatures are a method of signing computerised documents and eventually will be a central part of trading over the Internet and exchanging electronic documents.

"Today's decision prepares the way for an EU-wide legal framework supporting electronic signatures, certification service providers and related e-commerce activities," said the Minister for Public Enterprise, Ms O'Rourke, in a statement. "An EU-wide legal framework in these areas is essential to adding trust to the e-commerce system. I believe this is an enormous step forward in supporting e-commerce."

Certification service providers are third-party organisations that give a certificate which further guarantees the identity of a person using software to create an electronic signature. Because it is foreseen that networks of certification authorities will develop to underpin the use of signatures and encryption software, the directive also includes guidelines for their establishment.

Many certification authorities are already in existence, mainly supplying certificates to the financial and healthcare industries, which need to guarantee the security of client information sent over networks.

The draft directive agreement was welcomed by Mr Paddy Holohan, vice-president of business development for Irish company Baltimore Technologies, which creates the software for electronic signatures and the certificates issued by certification authorities. "While it won't change the world overnight, it will allow the world to change and accommodate electronic documents and electronic signatures," he said.

The draft directive had been the subject of bitter wrangling last November when France and Germany tried to tie electronic signatures to a specific technology, smart cards. Smart cards contain a computer chip which can be read by a special card reader attached to a computer, and provide an additional form of identity for a person creating a signature. But signatures can be generated in any number of ways which still verify the signer's identity.

Both countries are home to large, indigenous companies which manufacture the cards. But e-commerce analysts believe it would be a mistake to create a legal framework for the signatures which locks in a specific technology that could be superseded in the fast-changing technology industry.

The Republic was among the countries which argued for nonspecific wording in the directive. The new draft agreed yesterday leaves open the method of creating an electronic signature.

"The difficulty was that some states wanted [the directive] to be technologically specific, whereas we and others wanted it to be technologically neutral," said a spokesman for the Department of Public Enterprise.

This aligns it with Irish policy on electronic signatures as stated in a draft framework issued last summer that has been reiterated publicly by Government since then. It is understood that the Government has now completed a draft consultation document on electronic signatures and the use of encryption.

The final version of the document is due to be published next month, and will contain full legislative proposals.

According to the spokesman, a Bill could then be published in the autumn and the Department hopes it will be on the statue books by the end of the year.

That would probably put the already-delayed Irish statue in operation before the EU directive.