In order to be sure that the trader intends to act lawfully, by implementing an electronic signature developed by the trader and accepted by the counterparties, the trader will have complied with the provisions of the Law on Accounting, the Law on Electronic Documents and Cabinet of Ministers Regulation No 473 of 28 June 2005 „Procedure for the preparation, execution, storage and circulation of electronic documents in state and local government institutions and the procedure for the circulation of electronic documents between state and local government institutions or between these institutions and natural and legal persons”, I will give my opinion on this matter.
Section 7(1) of the Accounting Act states that entries in the accounting records supported by supporting documents. A supporting document is a document which certifies the existence of an economic transaction of an enterprise and which contains at least the following documentary particulars and information about the economic transaction:
1) the name of the author of the document (company), or, if the author is a natural person, the name and surname;
2) the registration number of the author of the document (if the author of the document is required by law to be registered) and, if the author of the document is a natural person, the personal identification number (if any);
(3) for an external supporting document, also the legal address (if the author of the document is required by law to be registered) or the address (if the author of the document is not required by law to be registered), and, if the author of the document is a natural person, also the address given by the person or, if none is given, the address of the declared place of residence;
4) the name of the type of document;
5. the date of the document;
(6) the registration number of the document;
7) signature (except in the cases referred to in Article 7.1 of this Law);
8) for certain types of supporting documents, other mandatory document requisites laid down by law;
9) the participants in the economic transaction, indicating the name (firm), registration number (if the participant in the economic transaction is required by law to be registered), legal address (if the participant in the economic transaction is required by law to be registered) or address (if the participant in the economic transaction is not required by law to be registered) of each participant in the economic transaction, and, in the case of a natural person who is a party to an economic transaction, his name, personal identification number (if any), the address given by the person or, if none is given, the address of his declared place of residence;
(10) a description of the economic transaction, the reasons for it and the measures (quantities, amounts), and, in cases provided for by law, other information on the economic transaction.
According to Section 7(7) of the Law on Accounting, if the supporting document is in paper form, the „signature” shall be made in the document in accordance with the requirements of the Law on the Legal Effect of Documents. In the case of an electronic document, the requisite „signature” shall be provided in accordance with the requirements of the Law on Electronic Documents.
In accordance with the interpretation of the terms in Article 1(2) of the Electronic Documents Law a secure electronic signature is an electronic signature that meets all of the following requirements: it is linked to the signatory only, it provides personal identification of the signatory, it is created by secure means of electronic signature creation that can be controlled only by the signatory, it is linked to the signed electronic document in such a way that subsequent changes to the document are visible, it is certified by a qualified certificate.
However, according to the interpretation of terms in Article 1(4) of the Electronic Documents Law an electronic signature is electronic data attached to or logically associated with an electronic document, authenticates the electronic document and confirms the identity of the signatory.
Article 3(2) of the Electronic Documents Law states that an electronic document is considered to be self-signed if it has a secure electronic signature. An electronic document shall also be deemed to be self-signed where it bears an electronic signature and the parties have agreed in writing to sign the electronic document by electronic signature. In such a case, the written agreement shall be executed and signed on paper or electronically by a secure electronic signature.
Accordingly, when a trader draws up an accounting document electronically, it must be certified by a secure electronic signature or an electronic signature.
Therefore, if the merchant and the counterparty have agreed on the electronic signature of the electronic document in accordance with the conditions set out in Section 3(2) of the Electronic Documents Law, then such an electronically prepared and signed accounting document will comply with the requirements set out in Section 7 of the Accounting Law and the merchant and the counterparty will be allowed to make entries in the accounting records on the basis of such electronically prepared and signed accounting document.
In this case, the trader, by concluding a mutual written agreement with the counterparties on the exchange of electronic invoices, indicating the agreement that in future the bill of lading - invoice will be sent to the counterparties via electronic mail in an electronic message as an attached file and will contain an electronic signature, the bill of lading - invoice so prepared will meet the requirements of Article 7 of the Law „On Accounting” and will contain the requisites necessary for a supporting document.
Section 7.1(2) of the Accounting Act states that a document issued by another company to a company - the recipient of goods or services - for payment may also be considered as an external supporting document if it does not contain the requisite „signature”, but the existence of the economic transaction referred to in this document is supported by another external document that has legal force within the meaning of the Law on the Legal Force of Documents.
The provision is therefore applicable in a situation where an accounting document is drawn up without the requisite „signature”.
It follows from the above that in the situation of a trader, if, for example, the trader intends to send invoices to its business partners by electronic mail, the provisions of the second part of Section 7.1 of the Law „On Accounting” are not applicable if the trader intends to prepare the accounting document with the requisite „signature” in compliance with the requirements of the Law "On Electronic Documents".
Paragraph 45.1 of the Cabinet of Ministers Regulation of 21 October 2003 No 585 „Regulations on Bookkeeping and Organisation” stipulates that for the preparation, execution, storage or circulation of an electronic document (document of justification and document of delivery of goods) and for the preparation, storage or certification of an electronic copy of a document of justification, document of delivery of goods or register of accounts in paper form, the company shall apply, as appropriate, Cabinet of Ministers Regulation No 473 of 28 June 2005 “Procedures for the Preparation, Presentation, Storage and Circulation of Electronic Documents in State and Local Government Institutions and Procedures for the Circulation of Electronic Documents between State and Local Government Institutions or between these Institutions and Natural and Legal Persons”, if the relevant matter is not provided for in the regulatory enactments regulating accounting.
Since the Cabinet of Ministers Regulation of 28 June 2005 No 473 „Procedure for the Preparation, Execution, Storage and Circulation of Electronic Documents in State and Local Government Institutions and Procedure for the Circulation of Electronic Documents between State and Local Government Institutions or between these Institutions and Natural and Legal Persons” does not specify requirements for the implementation of electronic signatures, the merchant shall not apply these Regulations when implementing an electronic signature compliant with the Law on Electronic Documents.
Finally, the trader should not use any combination of numbers or letters in place of „signature” so that the parties to the transaction can recognise that the document has been signed.
Source: www.ifinanses.lv
