Key Developments: Palestine’s Electronic Transactions and Trust Services Law

Palestine has introduced a new Electronic Transactions and Trust Services Law, granting electronic documents—such as contracts, records, and signatures—legal equivalence with physical documents (Article 42). This development aims to modernize the legal framework and facilitate digital transactions.

For electronic documents to hold legal validity, they must comply with two essential criteria:

1. Authenticity (Article 12): The document must reliably verify its origin, confirming it was issued by the claimed source.
2. Integrity (Article 13): The content must remain unchanged from its original form, emphasizing secure storage and a transparent audit trail for any modifications.

These provisions enhance trust in digital processes, aligning Palestine’s legal system with international standards and promoting efficiency in commercial and legal transactions.

Trust Service Providers (TSPs): High-Level Insights

The Electronic Transactions and Trust Services Law introduces a clear framework for Trust Service Providers (TSPs) to ensure secure and reliable digital interactions. Key highlights include:

• Regulation and Licensing: TSPs must be licensed by the Supervisory Authority, which oversees their operations to ensure compliance with strict technical and security standards.
• Core Services: Licensed TSPs provide services like electronic signatures, seals, and timestamps, critical for verifying authenticity and integrity in digital transactions.
• Accountability: Non-compliance results in penalties, including fines, suspension, or revocation of licenses, maintaining high standards in trust services.

This framework strengthens digital confidence and aligns Palestine with global best practices for secure electronic transactions.

Digital Identity Security: Safeguarding Online Transactions

The Electronic Transactions and Trust Services Law establishes a robust digital identity framework to enhance security and build trust in online interactions. Key features include:

• Assurance Levels (Article 37): Digital identities are classified into low, medium, and high assurance levels, with security measures tailored to the transaction’s sensitivity. High assurance identities are reserved for critical activities, such as financial transactions, ensuring robust verification.
• Encryption Standards (Article 32): Advanced encryption is required to protect sensitive data and prevent unauthorized access.
• Fraud Prevention: Strict measures are in place to combat identity theft and misuse, including secure authentication processes and detailed audit trails.

Applicability and Limitations: Defining the Scope of the Law

The Electronic Transactions and Trust Services Law outlines the transactions to which it applies, as well as key exclusions.

Key Areas of Application:

1. Digital Contracts (Article 15): Covers agreements executed electronically.
2. Electronic Payments (Article 25): Regulates payments made via digital systems.
3. Financial Instruments (Article 21): Governs the online management of securities and other instruments.

Excluded Domains:

1. Personal Status Matters (Article 3): Includes marriage, divorce, and inheritance.
2. Real Estate Transactions (Article 3): Excludes ownership transfers and related documents.

Penalties and Enforcement

1. To ensure compliance, the Electronic Transactions and Trust Services Law imposes strict penalties for violations. Operating without a license carries significant consequences, with individuals facing imprisonment of 1 to 3 years, while entities may be fined between 20,000 and 50,000 Jordanian Dinars (Article 52).
2. Violations related to data and licensing obligations also incur penalties. Failing to notify changes in licensing data results in fines ranging from 2,000 to 5,000 Jordanian Dinars (Article 53). Providing false information can lead to imprisonment of 6 months to 3 years, fines of 2,000 to 5,000 Jordanian Dinars, or both (Article 54).
3. For acts of fraud or tampering, altering or destroying data is penalized with fines of 1,000 to 10,000 Jordanian Dinars (Article 55), while fraud or forgery for licensing purposes results in fines ranging from 10,000 to 20,000 Jordanian Dinars (Article 56).

Challenges and Opportunities in Digital Transformation

While Palestine’s Electronic Transactions and Trust Services Law is a significant step forward, its exclusion of key areas limits its potential. Real estate transactions, a vital economic sector, are not included, hindering full digitization. In contrast, Saudi Arabia has successfully integrated real estate into digital platforms, leveraging PropTech under Vision 2030 to modernize the property market and streamline processes.

1. Similarly, personal status matters, such as marriage and inheritance, remain outside the law’s scope, restricting broader reform. Saudi Arabia’s use of digital personal status services and eID cards serves as a benchmark, demonstrating how integrating these areas can enhance legal efficiency and accessibility.
2. For Palestine, the focus must now shift to applying these laws effectively to its infrastructure. Addressing bottlenecks like virtual courts, property transfers, and civil matters is essential. As the world accelerates toward digitization, Palestine’s initiatives at the close of 2024 are a step in the right direction—it’s never too late to catch up.

Transforming the Future of Transactions in Palestine

The Electronic Transactions and Trust Services Law is more than just legislation—it’s a game-changer for Palestine’s digital future. By building trust in electronic transactions and aligning with global standards, it opens the door to secure, seamless, and efficient digital interactions. For businesses navigating these changes, accessing Legal Services and Solutions in Palestine can provide the guidance needed to adapt and thrive under the new framework.

This forward-looking law reduces costs, fuels innovation, and drives economic growth, setting the stage for Palestine to thrive in the digital age.

Curious about how this law can impact you or your business? Contact us to learn more!