The Legality of Electronic Certification and Electronic Certification Service Providers in Kenya
As technology continues to advance, electronic certification and electronic certification service providers have become increasingly prevalent in various industries, including in Kenya. Electronic certification refers to the process of using electronic means to verify and authenticate the authenticity of documents or information, while electronic certification service providers are entities that offer such services.
The legal landscape surrounding electronic certification and electronic certification service providers in Kenya is still developing. While the country has made significant strides in embracing technology and digital solutions, there are still legal considerations that need to be addressed to ensure the legality and validity of electronic certification.
This legal opinion will provide an analysis of the legality of electronic certification and electronic certification service providers in Kenya. It will examine the relevant laws and regulations governing electronic certification and certification service providers, as well as the advantages and disadvantages associated with the use of such services.
Certification Service Providers (CSPs)
Certification Service Providers (CSPs) are organizations that provide electronic certification services. These services include issuing digital certificates, digital signatures, and other electronic credentials that are used to authenticate and verify the identity of individuals, organizations, and devices in electronic transactions.
CSPs play a critical role in ensuring the security and integrity of electronic transactions. Digital certificates, for example, are used to establish trust between parties in electronic transactions by providing proof of the identity of the parties involved. Digital signatures, on the other hand, are used to provide a tamper-proof record of electronic transactions, ensuring that the contents of the transaction cannot be altered without detection.
CSPs are typically accredited by national or international standards bodies, such as the International Organization for Standardization (ISO), to ensure that their services meet established standards for security, reliability, and interoperability. They may be private companies, government agencies, or non-profit organizations, and they may offer a range of electronic certification services to businesses and individuals.
The Business Laws (Amendment) Act, 2020
The Business Laws (Amendment) Act, 2020 (the Act) in Kenya aimed and aims at improving the ease of doing business in the country by digitizing transactions, reducing the formalities and documents required to complete transactions, and lowering the cost of starting a business in Kenya.
The Act has brought about several changes, including the use of advanced electronic signatures, digitizing the Registry of Documents, the Survey Act, and the Land Registration Act, among others.
Amendments to the Law of Contract Act:
The Law of Contract Act was amended to allow for the use of advanced electronic signatures. These signatures must be unique, capable of identifying the signatory, created using means that the signatory may maintain under their sole control, and linked to the data to which it relates in such a way that any subsequent changes to the data can be detectable.
Contracts that required signatures to be valid can now be signed by advanced electronic signatures, including those for a disposition of an interest in land and contracts of guarantee.
Digitisation of the Registry of Documents – Registration of Documents Act:
The Register in the Registry of Documents may now be kept in electronic form, and the Registries, located in Nairobi and Mombasa, may now be digitized. The Act has also permitted the use of electronic signatures and advanced electronic signatures in executing documents and electronic filing of documents at the Registry of Documents.
Digitization the Stamp Duty Act:
Documents may now be stamped by marks embossed or impressed by electronic means, and the entire stamp duty process could be a fully online process. The process of stamp duty payment is already done online through the iTax portal.
Amendments to the Survey Act:
The Survey Act was amended to allow for the use of electronic signatures and advanced electronic signatures, electronic processing of the seal of Survey of Kenya, and electronic processing of documents, including plans.
Surveyors may submit documents to the Director of Survey electronically, and electronic authentication of documents by the Director of Survey is now possible. Transactions requiring input from the Survey of Kenya offices will now be faster, safer, and cheaper. The digitization aims to improve the long and laborious survey processes, which have been a significant drawback in transactions.
Amendments to the Land Registration Act:
The Land Registration Act was amended to allow for the use of electronic signatures and advanced electronic signatures and electronic processing of instruments relating to land. The Act has also done away with the need to obtain land rent and land rates clearance certificates before dealing in land. However, land registries in Kenya are yet to create electronic records and become fully digitized.
Amendments to the Kenya Information and Communication Act:
The Act amended the Kenya Information and Communication Act to permit the use of electronic signatures in executing title documents. The Communication Authority of Kenya (the CA) will have a crucial role to play in the new space of electronic signatures.
The CA is mandated with the licensing of electronic certification service providers whose role will be to support electronic signatures and adhere to procedures that ensure the secrecy and privacy of the electronic signatures.
Amendments to the Companies Act:
Companies no longer require a company seal, and contracts entered into by companies may be executed by the directors, the company secretary, or a person holding a power of attorney.
The Act also amends the Companies Act to phase out bearer shares. Companies are required to convert all bearer shares to registered shares within 9 months of enactment of the Act and to notify the Registrar of such conversion within 30 days. The Act also changes the thresholds required for “squeezing-in” and “selling-out”.
Public Notice for Recognition of Foreign Electronic Certification Providers (E-CSPs) in Kenya (1st September 2020)
In compliance with the Business Laws (Amendment) Act 2020, the Communications Authority (CA) released a public notice on 1st September 2020, inviting foreign Electronic Certification Providers (E-CSPs) to apply for recognition of their services in Kenya.
Legal Recognition of Electronic Signatures in Kenya
Under the Kenya Information and Communications Act (No. 2 of 1998) (KICA), electronic signatures are legally recognized, and they can be used to execute all documents except wills and negotiable instruments.
The KICA distinguishes between electronic signatures and advanced electronic signatures, which have specific features that make them more reliable and hold more weight under the law. For more information on the validity of electronic signatures, please refer to our discussion here.
Certification of Electronic Signatures
The Evidence Act (Cap. 80) provides that to confirm the authenticity of an electronic signature, the court may request the signatory or certification service provider to produce the electronic signature certificate.
Therefore, a digital certificate issued by an E-CSP verifies the identity or other significant characteristics of the signatory and contains the public key of the signatory.
Licensing Requirements for Foreign E-CSPs in Kenya
The Kenya Information and Communications Act (No. 2 of 1998) (KICA) Electronic Certification and Domain Name Administration Regulations, 2010, require foreign E-CSPs seeking recognition in Kenya to meet the following licensing requirements:
· Authorization to issue digital certificates in their country of origin.
· Compliance with internationally acceptable standards and requirements under KICA and its regulations.
· Establishment of a local agent to provide certification services.
Electronic Certification Service Providers (E-CSPs) in Kenya’s National Public Key Infrastructure (NPKI)
The Communications Authority of Kenya (CA) manages the National Public Key Infrastructure (NPKI) to enhance the adoption of digital certification services and electronic transactions across the public sector. As part of this infrastructure, Electronic Certification Service Providers (E-CSPs) play a critical role in facilitating secure digital communication.
Role of E-CSPs:
E-CSPs refer to Certification Authorities (CA) that operate under the legal and regulatory framework of Kenya. Their main function is to create, store and distribute digital certificates used to verify the authenticity of a particular public key, also known as an online identity.
They form the backbone of the NPKI system, which is essential for the rollout of e-transaction services.
The National Public Key Infrastructure (NPKI)
The National Public Key Infrastructure (NPKI) is a technical infrastructure system that provides a framework for the creation, storage, and distribution of digital certificates.
It is essential to the protection of communications and stored information from unauthorized access and disclosure by addressing the fundamentals of cyber security – confidentiality, integrity, authentication, and non-repudiation.
The NPKI in Kenya
In Kenya, the Communications Authority of Kenya (CA) is mandated by the Kenya Information and Communications Act, 1998, to issue a license to a person operating an Electronic Certification Service.
Th CAe has developed a licensing framework for Electronic Certification Service Providers (E-CSPs) that includes a Root Certification Authority (RCA), which is managed by the Communication Authority of Kenya (CA) as a regulatory function, and the Government Certification Authority (GCA), an E-CSP managed by the ICT Authority (ICTA).
Benefits of the NPKI
The benefits of a National PKI in Kenya are numerous and include the following:
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Locally available and cheaper digital certificates/signatures – A National PKI provides Kenyan businesses and individuals with the ability to access digital certificates and signatures at a lower cost, as they no longer need to rely on foreign E-CSPs.
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Operations and services within Kenyan jurisdiction – A National PKI ensures that operations and services are conducted within Kenyan jurisdiction, thereby guaranteeing compliance with local laws and regulations.
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Enhanced cyber security – The NPKI ensures the confidentiality, integrity, authentication, and non-repudiation of electronic transactions, thereby reducing the risks of cybercrime and fraud.
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Increased efficiency and productivity – A National PKI enables secure and fast electronic transactions, thereby reducing the time and cost associated with traditional paper-based processes.
Licensed & Accredited Electronic Certification Service Providers (E-CSPs)
Licensed and Accredited E-CSP – Cleared to Offer Services
Licensed E-CSP – Awaiting Accreditation to Offer Services
Advantages and Disadvantages of Electronic Certification Service Providers (CSPs) in Kenya
Electronic Certification Service Providers (CSPs) in Kenya offer a variety of legal advantages and disadvantages. Below is a comprehensive outline of these:
Advantages:
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Legal recognition: Electronic certification service providers are legally recognized under the Kenyan law, specifically the Information Communication Act (ICT) of 2009. The law defines the certification authority as a legal entity that issues and verifies digital certificates.
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Electronic signatures: CSPs offer a legal way for individuals and businesses to sign electronic documents. The Kenyan law recognizes electronic signatures as valid and legally binding.
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Authentication: CSPs provide a legal way for individuals and businesses to authenticate electronic documents. The use of digital certificates and electronic signatures ensures the authenticity of the documents.
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Secure transactions: CSPs provide secure ways for individuals and businesses to transact electronically. The use of digital certificates and electronic signatures ensures that electronic transactions are secure and tamper-proof.
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Reduced costs: The use of electronic signatures and digital certificates reduces the costs associated with paper-based transactions, such as printing, mailing, and storage.
Disadvantages:
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Security risks: CSPs face security risks such as hacking, identity theft, and fraud. These risks can lead to the compromise of digital certificates and electronic signatures.
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Technical issues: CSPs require technical expertise to operate, and technical issues such as system failures and software glitches can compromise the integrity of digital certificates and electronic signatures.
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Legal disputes: Legal disputes may arise regarding the validity and authenticity of electronic signatures and digital certificates, and the burden of proof may fall on the parties involved in the dispute.
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Limited access: The use of CSPs requires access to technology, which may be limited in some areas, particularly in rural areas.
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Lack of awareness: Many individuals and businesses may not be aware of the legal advantages of using CSPs, which may limit their use of these services.
Conclusion
In conclusion, electronic certification is a growing trend in Kenya, with many individuals and organizations turning to this technology to simplify their processes and save costs. However, the legal framework surrounding electronic certification is still evolving, and there are many questions and challenges that need to be addressed.
As we have seen, the Electronic Transactions Act and the Kenya Information and Communications Act provide the legal basis for electronic certification, but there is still a need for more detailed regulations and guidelines. In addition, the role of Electronic Certification Service Providers (ECSPs) is crucial in ensuring the integrity and security of electronic certificates, and there is a need for clear standards and accreditation procedures.
Despite these challenges, the benefits of electronic certification are clear, and this technology has the potential to revolutionize many industries in Kenya. With continued innovation and collaboration between government, businesses, and ECSPs, electronic certification can play a key role in driving economic growth and digital transformation in Kenya.