Electronic Signature Laws & Regulations - Hungary

In general, acceptance and use of electronic signatures and certificate-based digital signatures is increasing in the Hungarian business community. However, use of electronic signatures is not common in Hungary due to ambiguity regarding the legal definitions for “written form” and “private document with full probative force” in Hungarian law.

Next to the eIDAS Regulation, key laws that regulate the use of electronic signatures in Hungary include:

• General Rules for Trust Services and Electronic Transactions, Act 222 of 2015;
• Government Decree 451/2016 (XII.19.) on the detailed rules of electronic transactions;
• Hungarian Code of Civil Procedure, Act 133 of 2016 which establishes legal presumptions based on the form of document; and
• Hungarian Civil Code, Act 5 of 2013

According to the Hungarian Civil Code, if a specific form for a legal statement is required law or by agreement of the parties, then the legal statement is only considered valid if made in that required or agreed upon form. Additionally, if the written form is required, the contract is considered to be valid if:

1. at least the key points of the statement are executed in writing; or
2. the person making the statement has signed using a handwritten signature, unless otherwise specified by law; or
3. it is possible to retrieve the unaltered information from the document, identify the person making the legal statement, and identify the time when the legal statement was made.

The use of a qualified electronic signature (QES) or an advanced electronic signature (AdES) fulfills the requirement for the written form. However, there are court decisions that have accepted simple (or basic) electronic signatures as the written form. Thus, highlighting that the Hungarian courts will determine whether an electronic signature on a legal statement meets the requirement of the written form on a case-by-case basis.

The Code of Civil Procedure and other Hungarian laws require certain statements be made as a private document with full probative force which, unless proven otherwise, proves that the signatory has in fact made, accepted, or otherwise intends to be bound by the assertions in the legal statement. According to the Code of Civil Procedure, an electronic document will be considered a private document with full probative force if it is:

1. executed by the signatory’s QES or AdES based on a qualified certificate or stamp, including time stamp (where a time stamp is required by law);
2. certified by the signatory by means of document certification associated with the signatory’s identification as provided for in the relevant Government Decree; or
3. executed within the framework provided for in an act or government decree, or within the framework of a trust service implemented in a closed system, where a service provider clearly establishes and authenticates the identity of the signatory and links the signatory to the signature. The service provider must also provide an addendum, attached to the electronic document, certifying the authentication of the signatory’s identity. The addendum and the document must both be executed by at least an advanced electronic seal based on a qualified certificate and a qualified electronic time stamp.

Examples of agreements and statements that require the written form include:

• Purchase of real estate property;
• Retention of title;
• Pre-emption rights, repurchase rights, purchase options and sell options;
• Lease agreements;
• Employment agreements;
• Several legal statements of the employer as determined by the Hungarian Labor Code; and
• Trademark license agreements

Examples of use cases that require a private document with full probative force include:

• Power of Attorney (POA);
• Documents filed in a court procedure ;
• Notification of the change of ownership in the register of shareholders of a limited company;
• Acknowledging the provisions of the memorandum of association by new shareholders upon the increase of registered capital;
• Contract between a single-member limited liability company and its sole member;
• Case-by-case representation in customs procedures;
• Purchase of land for agricultural or forestry use;
• Transfer of agricultural proprietary rights;
• Loan agreement between the cooperative society and its member; and
• Purchase of registered vehicles (e.g. car, aircraft, boat)

Unless otherwise required by law, it is important to note that in Hungary, a person can never be forced to contract electronically, thus the option for a handwritten signature should always be available. However, one exception is in court and authority proceedings which generally mandate use of the electronic form.

Special Considerations

Transacting with public sector entities
When a private document with full probative force is required, the Hungarian authorities must accept an AdES based on a qualified certificate or a QES. However, where relevant legislation requires written communication, a legal statement made within the context of electronic communication shall be considered to meet that requirement if:

a) electronic identification of the declarant is carried out as prescribed; and
b) it is secured that the electronic document delivered is identical to the document approved by the client.

Use cases that generally require a traditional signature
In Hungary, there are specific statements (e.g. wills or marriage documents) that require a handwritten signature. There are also certain processes that cannot be replicated electronically such the preparation of inheritance documents or European payment order procedures that must be completed in front of a notary. Furthermore, according to the General Rules for Trust Services and Electronic Transactions, electronic communications may not be used for:

1. Procedural steps where electronic communications are not applicable;
2. Procedures or procedural steps where electronic communications are excluded by an international treaty or a directly applicable binding Community legislation; and
3. Use cases where the document or official instrument contains classified information

Additionally, a witnessed document is only considered to be a private document with full probative force if it is signed by two witnesses verifying that the person named in the document produced the signature before them. And unless otherwise provided by law, the name and residence address of each witness must be legibly indicated on the document.