On March 31,1998, the Study Group on the Legal System of Electronic Commerce (Chair:Kenjiro Egashira, University of Tokyo), sponsored by the Director of the Civil Affairs Bureau of the Ministry of Justice, published the "Report on the Legal System of Electronic Commerce". The Study Group has two subcommittees, the System Subcommittee discussing on the foundation of systems necessary to realize secure electronic commerce and electronic applications and the Substantive Law Subcommittee discussing on issues concerning substantive law and the need for amendment of substantive law.
Spread of exchange of digital data through open computer networks enables electronic commerce and electronic applications to public entities.
In electronic commerce and applications, parties to telecommunications cannot convince that data in the name of a person are really generated by the person and that the data are not altered in a computer network because interception and alteration of data in a computer network and generation of forged data can be very easy. So the establishment of legal systems for certifying the identity of a generator of data and the integrity of data is indispensable for the purpose of promoting electronic commerce and realizing secure electronic applications.
In addition, issues concerning the legal effects of electronic signatures which are functionally equivalent to handwritten signatures or seals (inkan) should be discussed in order to improve secure electronic commerce.
In Japan, a corporation's exemplified copy of the commercial register, a certificate of qualification, and a certificate of an impression of a seal, all of which are based on the information registered in the commercial register, are widely used to certify the existence of a company, power of representation of a company's director, and the identity of a director. Then, in the Japanese commercial area, it is considered appropriate to establish electronic authentication systems utilizing information registered in the commercial register in order to realize secure electronic commerce. There are two possible schemes to realize electronic authentication systems utilizing information registered in the commercial register:
A scheme to provide private certification authorities with information registered in the commercial register
A scheme to provide private certification authorities with information registered in the commercial register electronically in order that the authorities can utilize the information, which has been regarded as highly reliable.
A scheme to establish a certification authority which is operated by the commercial registry and issues electronic certificates for directors of companies, which are highly reliable electronic substitutes for paper-based copies and certificates issued by the commercial registry.
In Japan, the notarization system is used to certify the existence and the contents of a contract and to attach an officially-stamped date to a document to prevent future disputes. The Study Group considers that the following electronic notarization system, which offers the same functions as those of the present notarization system, would be useful to realize secure electronic commerce:
A notary shall attach an electronic officially-stamped date and his/her digital signature to an electronic document.
A notary shall inspect the contents and effectiveness of an electronic private document and attach a certification statement and his/her digital signature to the document.
A notary shall verify the identity of parties to a contract, prepare an electronic notarial document, and attach his/her digital signature to the document.
A notary shall keep electronic notarial documents, notarized private documents, and electronic officially-stamped documents and certify the existence and the contents of the electronic documents.
The following issues should be taken into consideration in discussing on possible legislation on electronic signatures in order to establish the same effects of electronic signatures as handwritten signatures to realize secure electronic commerce.
(a) Presumption on authenticity of an electronic document
It should be discussed whether it can be presumed that an electronic document with an electronic signature which is functionally equivalent to a handwritten signature is made by the generator of the electronic signature (cf. Art. 228(4) of the Civil Proceedings Act).
(b) Presumption on a generator of an electronic signature
When presumption mentioned above is established by law, the generator of an electronic signature should be proved. It should be discussed whether it can be presumed that a digital signature verified by reference to a public key listed in a certificate issued by a certification authority which fulfills certain requirements is generated by the person listed in the certificate.
(c) Satisfaction of signature requirements
In some cases, a document with a handwritten signature or a seal is required by law. It should be discussed whether a document with a handwritten signature can be substituted by an electronic document with an electronic signature in such cases. In permitting such substitution by law, the reason for such signature requirements in individual provisions should be investigated.
(a)In establishing legal effects of electronic signatures (see a.), a scheme for clarifying what electronic signatures are regarded as effective electronic signatures may be necessary.
(b)In establishing presumption on a generator of an electronic signature (see a.(b) ), requirements concerning certification authorities may be needed.
(c)Then, it can be possible that establishing requirements concerning certification authorities by law and designating certification authorities which fulfill such legal requirements for the purpose of regarding a digital signature verified by reference to a public key listed in a certificate issued by a "designated" certification authority as a legally effective electronic signature and presuming such a digital signature is generated by a person listed in a certificate issued by such "designated" certification authority. (The purposes of establishing such designation scheme are to clarify what electronic signatures are regarded as effective electronic signatures and to establish requirements for presumption on a generator of an electronic signature. The scheme dose not prevent any operations of non-designated certification authorities. Digital signatures verified by reference to a public key listed in a certificate issued by a non-designated certification authority may have some of the legal effects mentioned above.)
The purposes of the Report are to suggest possible schemes and to point out issues. There remain such issues to be discussed as concerning details of technical matters and consistency with domestic and foreign legal systems. The necessity for establishing global framework to improve international electronic commerce, the discussions on many international standards concerning electronic commerce formed by private entities, and discussions held in such international conferences as UNCITRAL and OECD should be taken into consideration in continuing studies on establishment of the systems and legislation in the future.
In addition, in conducting such studies, private companies and government offices and agencies should cooperate one another. The establishment of systems, including necessary legislation, should be carried out rapidly to deal with rapid improvement in telecommunication and to foster electronic commerce and applications.
The Civil Affairs Bureau of the Ministry of Justice is starting preparing pilot projects in the current fiscal year. The Ministry will continue studies on legislation on electronic signatures.