E- signature E- payment, A view from Egypt

1. E- signature & E- payment, �A view from Egypt� Judge Dr. Ehab Elsonbaty Cyber Law Expert, Egypt ehabelsonbaty@hotmail.com

2. Topics of discussion E- finance. (E- BANKING. E-PAYMENT. E-MONEY. SMART CARDS.) Electronic signature. Legal challenges. Egyptian approach. Recommendations.

3. Why is cyber security crucial for Banking? Digital computers have changed the financial world, the same way the industrial revolution did. Financial institutions moved away from physical objects as the substance of commerce to INFORMATION. Possession and dissemination of information is the core of bank�s activity.

4. Why is cyber security crucial for Banking?2 The challenge in front of the bank is : How to have the identity and ability to provide guarantees, transport, record, exchange and settle electronic value data. As bank to bank or bank to customer(ATM,E- accounts, E-saving, Online credit card payment system, Electronic Payment based on Trusted Third Party (TTP), Digital Cash, M-Payment, Electronic billing presentment and payment,Freeing customers from the tyranny of paper)

5. Regulate or not to regulate, is this the question? The ability of the legislations of many states to govern computer activities properly is under question, Thanks to the rapid development of technology which cause new problems on a speed regular bases.

6. regulatory issues Common law approach: Minimum regulations � less litigations - Self regulations - Market leads Civil law approach: Every thing is regulated - Not used to codes of conduct � Implementation, Guidelines.

7. How does E-Finance challenges classical law rules? Identity /person. Location. Material / property. Nationality. Time. Contract (capacity, formation, conclusion, warranties, payment�etc.)

8. Risks according to Basel committee 1 OPERATIONAL RISK No enough security. Not adequate design. Customers abuse. REPUTATIONAL RISK Public opinion rise against a bank with a bad system can create a negative stereo type on other banks.

9. Risks according to Basel committee 2 LEGAL RISK Abuse of laws specially those relating to money laundering, mutual obligations and electronic mediation. OTHER RISK Credit risks, interest rates, giving credit facilities to customers abroad which create a possibility that customers may not be able to pay their debits.

10. E-MONEY! 1 By its decentralized, distributive nature, electronic money was supposed to have the same potential for transforming economic structure as personal computers did for overhauling management and communications structure .

11. ELECTRONIC MONEY 2  Financial systems are emerging which allow economic value to be represented digitally by electronic patterns. This 'electronic money', or e-money, can be exchanged through the use of 'smart cards' or over the Internet. Unlike stored value cards, e-money can pass immediately between the two transacting on-line parties, without the need for an intermediary (e.g., e-cash by DigiCash Inc.). The current situation for e-money thanks to money laundering and combating terrorism finance issues.

12. Smart cards What should be protected? The smart card itself? The design? Or the application on the card? Is minimum level of security is required to grant protection?

13. The Potential for money Laundering 1

14. The Potential for money Laundering 2 The abuse of electronic banking by money launderers may become a significant problem in for two reasons: transactions may become untraceable; and transactions are incredibly mobile. Dilemma for the banks.

15. New trends in cyber crime! Relevant to banking operations. Phishing - Smishing. can erode the trust of customers�cardholders and merchants We must be fully committed to protecting the system each and every day. Must employ multiple layers of security.

16. Secrecy Laws  Review secrecy laws to determine the need for legislative, regulatory or other actions to Facilitate the sharing of financial institution records and related information between law enforcement agencies and regulatory authorities, and among governments .

17. Cryptography and Banking Application 1 Cryptography (encryption) is particularly important to the growth of electronic Finance because it provides the means to ensure the authenticity, integrity and privacy of transactions and communications, providing the necessary security for the digital world.

18. Cryptography and Banking Application 2 The inability to decrypt could well have a severe impact on the prevention, detection, investigation, and prosecution of crime, the ability to monitor security threats. It is for these reasons that arguments are made in favour of reasonable limits on the production, export, import and use of cryptography.

19. Situation in Egypt No e-banking law in, only a license of the central bank. Many applications in posts, telecom companies and e-government. need to enable electronic payments supporting various categories of �merchants� and service providers such as: utility companies (telephone, natural gas, electricity, cable companies, petrol stations, etc.); healthcare service providers (hospitals, clinics, pharmacies, etc.); campuses of schools and universities; supermarkets, grocery shops and food stores; hotels and restaurants; market places, shopping centers, and department stores; etc. E-Government Program that aims at making governmental services available at the fingertips of the citizens, and hence requiring nation-wide e-payment services at outlets that offer government services.

20. Egypt�s competitive advantages:  Excellent Telecommunications infrastructure at low cost and country-wide availability. The local market for e-payment can be extended to cover hundreds of thousands �merchants and service providers�, thus making this venture very profitable from an investment point of view. Great opportunity to develop and export software for POS and e-payment devices running Arabic interfaces to the Arab region, making use of the highly skilled ICT professionals in Egypt.

21. Egyptian E � Law New digital signature law 15/2004 and the regulator (Information Technology Development Authority) An enabling law. Draft of e � commerce legislation. Draft Law on�Regulating the protection of Electronic Data and Information and Combating Crimes of Information� E-payments? Data Protection Law. Recently a Consumer Protection Law was passed 67/2006. Revision of international and regional commitment.

22. Overview of Electronic Signature Law 1 WHAT IS AN ELECTRONIC SIGNATURE AND A DIGITAL SIGNATURE? Articles 14 � 18 explain the legal value of electronic writing and electronic signature, its weight of proof, its ability to prove obligations and rights. If the criteria are met the electronic writing is considered as the paper one and has the same weight of proof. The electronic document was also explained. The electronic signature will have the same proof evidence as traditional signature by giving credibility to the content of the electronic writing it is signed with.

23. Overview of Electronic Signature Law 2 ARTICLE 18: The electronic signature, electronic writing, and electronic documents shall enjoy their conclusiveness in providing evidence in case they fulfil the following conditions: a) Linkage of the electronic signature exclusively with the signer; b) Control of the signer exclusively on the electronic medium; c) The possibility of uncovering any modification or replacement in the data of the electronic document or electronic signature; The executive regulations of the present Law shall determine the technical and technological regulators necessary therefore.

24. Crimes punished by the Electronic Signature Law 1 ARTICLE 23: Subject to any stricter penalty prescribed in the Penal Code or in any other Law, a penalty of imprisonment and a fine of not less than ten thousand Egyptian pounds and not exceeding one hundred thousand Egyptian pounds or either penalty shall be inflicted on: a) Whoever issues an electronic ratification certificate without obtaining a license for exercising the activity from the Authority;

25. Crimes punished by the Electronic Signature Law 2 b) Whoever damages or vitiates an electronic signature, a medium, or an electronic document, or fakes something of that by fabrication, modification, alteration or in any other way; c) Whoever uses a vitiated or faked electronic signature, medium, or electronic document while being aware of this; d) Whoever violates any of the provisions of articles (19, 21) of the present Law;

26. Crimes punished by the Electronic Signature Law 3 e) Whoever manages by any method to obtain without due right an electronic signature, a medium, or an electronic document, or penetrates that medium, obstructs it, or inactivates the performance of its function; Whoever Violates article (13) of the present Law shall be liable to a fine penalty of not less than five thousand pounds and not exceeding fifty thousand pounds.

27. Crimes punished by the Electronic Signature Law 4 In case of recidivism, the penalty prescribed for these crimes shall be doubled in its minimum and maximum limits. In all cases, the court shall rule the publishing of the conviction sentence in two daily widespread newspapers and on the open electronic information networks at the expense of the convict.

28. Crimes punished by the Electronic Signature Law 5 Article 24: The officer in charge of actual management of the violator juridical person shall be liable to the same penalties prescribed for the deeds committed in violation of the provisions of the present Law, if his default on the duties imposed on him by such management has contributed to the occurrence of the crime, while being aware of this. The juridical person shall be jointly responsible for executing the financial penalties and compensations awarded by the court, if the violation has been committed by one its workers in the name and the interest of the juridical person.

29. Recommendations 1 A country�s success in the e- era will depend on its ability to participate in the global knowledge-based economy. The electronic marketplace will have to be governed by a clear set of rules, so that corporations, institutions and individuals can have confidence in doing business electronically. Ensuring the safety and reliability of the system will be crucial.

30. Recommendations 2 There is a need for a comprehensive legal framework that covers: Cyber crime, E- commerce, E- transactions and Electronic signature. Existing laws should be reviewed and modified according to the new technologies and applications. This is including but not limited to: security � public order- penal codes - consumer rights � liability � data protection � money laundering � secrecy laws.

31. Recommendations 3 Public and private sectors entities should take their responsibilities: Compliance. Investments in security. Exchanging information. Peering experiences and alerts. Spread the awareness between networks. Consulting with law enforcements.

32. �E- signature & E- payment, a view on Egypt�@ THANK YOU FOR YOUR ATTENTION,ANY QUESTIONS? Judge Dr. Ehab Elsonbaty Cyber Law Expert, Egypt ehabelsonbaty@hotmail.com