Obtaining an electronic signature for foreigners in Ukraine
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In the previous text we provided a general description of the peculiarities of electronic execution of documents according to Ukrainian legislation. In this publication we will elaborate on the foreign aspect of working with electronic contracts in Ukraine, as well as tell about notarial contracts and the possibility of remote registration actions.
Can a foreigner get an electronic signature in Ukraine?
Yes. For example, we provided legal support to a Latvian citizen for obtaining a signature in Ukraine – regional manager of a group of companies producing construction materials. But there is a nuance: to get a signature you need to come to Ukraine, because the accredited service center must verify the key recipient.
To get an electronic signature you will need to have your identification documents translated into Ukrainian. Also a foreigner can obtain an electronic signature in the status of a manager or other officer of the Ukrainian company, this will require additional documents confirming his position. With this electronic key a foreigner will be able to sign reports and other documents on behalf of the legal entity.
Some Ukrainian banks provide services of electronic signatures for their clients. The owner of the bank account has already undergone identification and verification, so there is no need to go through the procedure again. If a foreigner has an account in a Ukrainian bank, you should inquire about the possibility of obtaining a qualified electronic signature remotely.
Separately in this case it should be analyzed whether such signature is suitable for business purposes, if the person wishes to hold a position in a Ukrainian legal entity and sign documents remotely.
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Will the Ukrainian electronic key have legal effect outside of Ukraine
We are not aware of any cases of recognition of electronic Ukrainian signatures by other countries. If you conclude an electronic agreement with a non-resident and it is subject to the law of Ukraine, there will be no questions about the validity of the Ukrainian signature. If, on the other hand, the law of another country applies to the form of the transaction, one should analyze separately whether the Ukrainian imperative norms are not violated and whether such signature will be valid abroad.
As a general rule, it is most important that the debtorєs signature is recognized by the country where the exequatur will take place. If your counterparty is in Poland, for example, and you send goods there, you should be sure that its signature will be legally valid in Poland, where you will need to collect debt from it if something goes wrong.
Can I give my key to other people?
We know of a case when a foreigner, director of a Ukrainian legal entity with first signature rights, got an electronic signature in Ukraine and gave it along with the password to the company’s accountants for the accounting needs. He thought it was a proforma procedure, and that the key was only needed for communication with the tax authorities. The truth is that electronic keys have no restrictions on their use at all. An unscrupulous employee with your key and password can sign any document on your behalf. Imagine that another person has acquired the ability to reproduce your handwritten signature, without your right to appeal it.
In general, this is a normal story in Ukraine, when the “flash drive” with the director’s key lies in the accounting department. At the level of trusting corporate relations, there is nothing wrong with it. But it should be remembered that the person is personally responsible for the safety of the key and should report the facts of its loss or compromise. The law does not provide for the possibility of transferring one’s key to another person.
Sometimes a manager cannot physically keep track of all the people who can sign documents, but in this case we offer companies to prepare e-signature policies which assign duties and responsibilities to employees.
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Does a foreign electronic key have legal force in Ukraine?
Article 38 of the Law of Ukraine “On Electronic Trust Services” provides for two alternative cases of recognition of foreign electronic signatures by Ukraine:
- If the Ukrainian authorized body recognizes that foreign electronic signature service providers meet Ukrainian requirements;
- If there is an international treaty according to which Ukraine includes foreign electronic signature service providers in its own register.
None of these points are currently being implemented, which means that there is still no way to talk about the legal validity of foreign electronic signatures in Ukraine. There are certain steps on the Ukraine-EU line, as well as a recently drafted bill on simplification of procedures for mutual recognition of electronic signatures. Therefore, in the near future we can expect progress in this direction, which we constantly monitor for our clients.
Comment from the team: The lawyers believe that, under certain conditions, in a foreign trade contract it is possible to consider the choice of law, which is more flexible than the Ukrainian law in the context of electronic document management. If you are faced with such a question please contact a specialist, because the problem should be analyzed taking into account the mandatory requirements for the form of the foreign economic transaction, stipulated by Article 31 of the Law of Ukraine “On International Private Law”.
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Notarial Agreements in Ukraine
In Ukraine there are a number of transactions that must be certified by a notary. For example, the real estate transactions must be executed only with the notary, with the obligatory participation of the parties to the contract or their representatives. Ukrainian law is developing in the “paperless” direction, but at present it does not apply to notarial transactions, they have not been digitized yet.
In the case of real estate, the parties cannot change the law applicable to the contract (Part 2 of Article 31 of the Law of Ukraine “On International Private Law”), so the transaction will necessarily be subject to the laws of Ukraine. Of course, it is possible to structure the purchase of real estate in another way: not to sell the real estate object itself but to sell the company that owns it (you can read about structuring here).
We have been accompanying both local and foreign businesses for years in Ukraine and are well aware of the peculiarities and nuances of the correct fixation of agreements on paper and in digital format.
If you feel that the transaction is worthy of careful attention to its execution, we will help you organize the process correctly and prepare the necessary wording for your documents.
Consultation fee for businesses here.
Everything about doing foreign business in Ukraine here.