Principal requirements for the use of
encryption and digital signatures in the
European energy sector
Current status and options for market participants
Status:
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0.3
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February 15, 2016
Use of encryption and digital signatures in the European energy sector
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CONTENTS
0
MANAGEMENT SUMMARY .................................................................................................... 4
0.1
0.2
1
BACKGROUND ......................................................................................................................... 4
KEY RECOMMENDATIONS ........................................................................................................ 4
INTRODUCTION ......................................................................................................................... 6
1.1
1.2
1.3
1.4
1.5
2
ABOUT THIS DOCUMENT .......................................................................................................... 6
SCOPE OF PROJECT ................................................................................................................... 6
PARTICIPANTS IN THE PROJECT ............................................................................................... 6
REFERENCES ............................................................................................................................ 7
CHANGE LOG ........................................................................................................................... 7
BACKGROUND............................................................................................................................ 8
2.1
MARKET DRIVERS .................................................................................................................... 8
2.1.1
General market features .................................................................................................. 8
2.1.2
Pressure on participants ................................................................................................. 8
2.2
EDI RELEVANT TRANSACTIONS AND THEIR REQUIREMENTS IN TERMS OF SECURITY............. 9
2.2.1
Invoices/credit notes and accompanying information ..................................................... 9
2.2.2
Customer master data ..................................................................................................... 9
2.3
TRADERS.................................................................................................................................. 9
2.4
POLITICAL FRAMEWORK ........................................................................................................ 10
3
THE LEGAL FRAMEWORK IN CONTEXT ......................................................................... 11
3.1
GLOBAL SITUATION ............................................................................................................... 11
3.2
EXAMPLE APPLICATION OF EUROPEAN DIRECTIVES – THE LEGAL SITUATION IN GERMANY 12
3.2.1
Status of legal documents .............................................................................................. 12
3.2.2
Principles concerning access to and verifiability of digital documents and
consequences within archiving processes ..................................................................................... 13
3.2.3
Consequences from the Act amending taxation on company turnover.......................... 14
4
TECHNICAL STANDARDIZATION ...................................................................................... 15
4.1
DIGITAL SIGNATURES AND EDIFACT .................................................................................. 15
4.1.1
Progress of decision–making by the EDIFACT standardization bodies ....................... 15
4.1.2
Discussed alternatives for implementation into EDIFACT ........................................... 15
4.2
DIGITAL SIGNATURES AND XML .......................................................................................... 16
4.3
DIGITAL SIGNATURE AND E-MAIL ......................................................................................... 17
4.4
INTEROPERABILITY OF DIGITAL SIGNATURES........................................................................ 17
4.4.1
ISIS-MTT standard ........................................................................................................ 17
4.5
VALIDATION OF DIGITAL SIGNATURES ACROSS ASSOCIATION BOUNDARIES ........................ 18
5
PRACTICAL APPLICATIONS ................................................................................................ 20
5.1
5.2
5.3
6
GENERAL REQUIREMENTS ON THE USE OF DIGITAL SIGNATURES ......................................... 20
APPROACH IN EDIFACT INVOICES (EDIFACT-IMMANENT SIGNATURE) ............................ 20
TIME STAMP SERVICE ............................................................................................................ 21
IMPLEMENTATION AND BEST PRACTICE RECOMMENDATIONS .......................... 22
REALIZATION OF SECURITY IN THE ENERGY INDUSTRY’S ELECTRONIC LEGAL
RELATIONSHIPS AND BUSINESS TRANSACTIONS ................................................................................ 22
6.2
GENERAL PROCESS FOR SETTING UP PUBLIC KEY INFRASTRUCTURES .................................. 23
6.1
6.2.1
Possible process for the definition of business transactions/applications for which
certificates are to be used .............................................................................................................. 23
6.2.2
Registration process ...................................................................................................... 24
7
ebIX
OUTLOOK .................................................................................................................................. 25
May 16, 2006
Use of encryption and digital signatures in the European energy sector
ebIX
3
May 16, 2006
Use of encryption and digital signatures in the European energy sector
4
0 MANAGEMENT SUMMARY
This document is the first in a series of publications from the ebIX project “DigSig” regarding the use
of encryption and digital signatures within the European energy sector. It examines especially the
legal, organizational and technical aspects which need to be taken into consideration for the
introduction of digital signatures within the sector. Particular emphasis was laid on a broad perspective
going beyond company boundaries. It is of crucial importance to pursue the introduction of electronic
handling (instead of paper and manual signatures) in business relationships – digital signatures are a
means of providing verifiability to electronic data interchanges.
0.1
Background
The energy branch as a whole is facing this next important automation step that should be
implemented multilaterally, whenever possible. Pioneer work is not required to this end; other
branches like the automobile industry have shown that automation can be realized at a reasonable
expenditure.
The liberalized energy market has created new challenges in terms of logistics, in particular with
regard to mutual billing. Rapidly organizing electronic handling of this process will generate large
synergies for all market participants. According to a study of the EU Commission, companies can rely
on cost savings of up to 72 % through pure electronic invoicing with digital signature.
In legal terms, electronic invoicing without accompanying paper documents has, for example, been
possible in Germany since 1st January 2002; when verified with a so-called qualified digital signature,
the electronic transaction is recognized as a voucher for income tax deduction. Thus, the ground has
been prepared for exploiting a considerable rationalization potential.
As a result of the development of markets, on the one hand, and of the possibilities of information
technology, on the other hand, market participants agree that secure electronic transmission of
additional market data (such as metered values, schedules and customer data) is important. A modern,
secure Business Partner Network needs to be established which organizes Electronic Data Interchange
(EDI) between market participants, and which ensures conformity with the law, interoperability,
efficiency and liability. This system, if it is to be successful, must be based on mutual confidence and
uniform rules and procedures in terms of IT security which also guarantee minimum complexity and
thus maximum economic efficiency. This can be achieved through the use of digital signatures and
encryption in communication processes.
The necessary contractual elements can be laid down in interchange agreements governing electronic
business transactions. The necessary technology has been available in the market for a long time and
quick access is possible by means of secured e-mail technology. In order to define equal security
criteria within the area of confidence going across association boundaries, and to optimally support
companies with regard to implementation, it is advisable in economic terms to define a common
security policy (PKI-Policy – Public Key Infrastructure Policy) at market interfaces.
0.2
Key recommendations
The authors recommend that

market participants make certificates with public keys for encryption or for validation of
signatures available (criterion of publication);

communication partners encrypt data in online transactions and provide advanced or qualified
signatures (criterion of application);
ebIX
May 16, 2006
Use of encryption and digital signatures in the European energy sector
5

communication partners use and accept digital signatures and source identifiers for verification of
legal liability, integrity, and authenticity (criterion of acceptance);

e-mails are generated in a verifiable manner with a source identifier for ensuring integrity and
authenticity, and encoding them on the basis of standard procedures for the ensuring
confidentiality;

documents are interchanged in accordance with the accepted formatted message types (using
EDIFACT, XML) (criterion of document compatibility);

all EDI message required for electronic invoicing with income tax deduction (and all declarations
of a legal nature) are signed with a qualified signature (with supplier accreditation, where this is a
legal requirement);

all other EDI messages are signed with at least an advanced signature;

Web-based online transaction services are authenticated and encoded by the respective servers in
an application-oriented manner;

rules and regulations required for interoperability and defined and made available to all market
participants;

model solutions be developed allowing market participants to purchase the required functionality
(BUY) or implement it themselves (MAKE) in an economically and technically simple manner.
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Use of encryption and digital signatures in the European energy sector
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1 INTRODUCTION
1.1
About this document
Within the European energy sector, electronic data interchange (EDI) using a variety of methods has
become a core business enabler over the last few years. It is no longer possible to imagine how
liberalised energy markets would function without EDI; rapid and automatic interchange and
processing of business transactions, as far as possible without human intervention, is organisationally
and economically necessary for all participants at all levels. Whether the transactions contain metering
data, invoices, customer switching information or schedules: automation brings benefits through
process optimisation. Nevertheless, there are further, fundamental considerations – political,
organisational and technical – to bear in mind, which influence implementation.
Core processes with a high-volume character require supporting processes within the organisation.
Securing EDI transactions is one such supporting process, especially in connection with transparency
and integrity of the data involved. Just as a signature gives a piece of paper legal character – e. g. from
an offer to a contract – EDI requires the same legal status for security and non-repudiation. To this
end, it is essential that a secure business partner network be established, within which electronic
business transactions for all participants are made possible. Therefore we need to promote an
infrastructure which can be trusted both by larger corporations (with their own certification
authorities) and smaller companies (who buy-in from service providers).
This can only be guaranteed by verification and confidentiality mechanisms directly associated with
the information exchanged. These mechanisms need to cover the whole range of the logical
transactions consistently. This is necessary to be able to carry out transactions in the new deregulated
market between market participants in a legally correct and unambiguous manner in terms of liability
law, and not least in an inexpensive way under technical and organisational aspects.
This document investigates the possibilities and limits of the use of digital signature and encryption at
the information level within communication processes between market participants via Electronic
Data Interchange (EDIFACT or XML), some of which are very extensive, where the development of a
„Secure Business Partner Network“ comprising both the secure communication platform and secure
business transactions is required.
1.2
Scope of project
In the light of these requirements, a small project (“DigSig”) was established within the ebIX structure
to generate appropriate documentation which can then be used as a basis for implementation scenarios
on a national and/or international level. The intention is to describe the overall harmonisation
requirements for the use of encryption and digital signatures for electronic transactions within the
European energy sector; also being compatible with the following overall ebIX objectives:
1) Make recommendations of common procedures that facilitate the common open European energy
market
2) Make common standards for secure data interchange that can automate the process to reduce the
costs for the parties involved.
1.3
Participants in the project
The project is based on documents produced within the German national group (under the able
tutoring of Dr. Willi Kafitz, Siemens AG, Frankfurt) and has been coordinated for ebIX by Carl W.
Major. The following participants provided intellectual and/or financial support to the project:
ebIX
May 16, 2006
Use of encryption and digital signatures in the European energy sector
Country
DE
DE
DK
BE
SE
NL
FI
NO
NO
SE
SE
CH
1.4
Name
Carl W. Major
Dr. Konstantin Staschus
Erik Hartwell
Hugo Dekeyser
Joachim Abrahmsén
Lodewijk ter Haar
Matti Vasara
Per M. Breistein
Ole Jacob Høyland
Oscar Ludwigs
Robert Lundin
Rudolf Baumann
7
Company
E.ON Netz
VDN
Energinet.dk
Eandis
Steria
Tennet
Fingrid
Statkraft
Statnett
Svenska Kraftnät
Steria
ETRANS
References
[1] Original project proposal, see http://www.ebix.org/
1.5
Ver.
0
0
0
0
0
ebIX
Change log
Rel.
1
1
1
2
3
Rev.
none
A
B
none
none
Date
2005-10-25
2005-11-17
2005-12-06
2006-02-28
2006-05-16
Changes
Document generated
Textual and structural corrections
Further corrections
Comments incorporated
Publication as ebIX RFC
May 16, 2006
Use of encryption and digital signatures in the European energy sector
8
2 BACKGROUND
2.1
2.1.1
Market drivers
General market features
To date, relatively few EU member states have completely opened up their electricity market. Where it
has occurred, however, even though former “captive customers” in closed supply areas are now free to
choose their electricity supplier, dependencies in the market and in electrical networks (which are
partly attributable to pure physical connections), have not disappeared. Going far beyond these mutual
dependencies (as compared for instance to the liberalized telecommunication market), the common
requirements in the electricity market in terms of metering, scheduling, system services, spot market,
balance settlement, customer switching and billing require close, authentic, binding and verifiable
communication relationships.
Such demands increase with the growing transparency in almost all market segments. Although the
switching rate of domestic customers is today still around 3 percent (that of small commercial
customers approx. 4 percent and that of industrial customers approx. 15 percent), the potential
willingness to switch is estimated to be five times as high. This becomes more apparent following the
conclusion of new (often more favourable) contracts with existing electricity suppliers, so-called
"internal switching". In early 2002, the number of such agreements amounted in Germany to more
than 25 percent for domestic customers and to more than 50 percent for industrial customers.
The resulting requirements for supply and billing relationships between market participants increase in
proportion to the requirements for verifiability and integrity of the data exchanged. These overall
security requirements on the Business Partner Network need to be satisfied for the relevant EDI
relationships in a practicable manner at reasonable cost. Early experience in other branches, such as
financial management, has shown that the use of digital signatures is reasonable in economic,
organisational and technical terms because the change of media for manual signatures can be avoided,
and rationalization potential is exploitable for other paper-based processes. Consequently, there are
many additional possibilities of streamlining business processes. Internal and external business
processes and their supporting processes are obviously affected to a similar extent in the electricity
sector because data exchange can be optimized both with other market participants and within
corporate groups.
Interdependencies between market participants are not trivial in this context. The most urgent business
processes with immediate effects on financial operations need to be resolved first in keeping with
three key criteria: legal conformity, interoperability and economic viability. Furthermore, the overall
concept implemented needs to be upwardly compatible with as many economically-reasonable EDI
business relationships as possible.
2.1.2
Pressure on participants
The technical interdependencies of energy supply remain virtually unchanged. A consequence of
deregulation however is new, more complex implementation processes. For example, apart from
customer switching in the private sector, the need for additional expenditure as recently recorded can
be attributed to billing of new customer groups, billing of network usage, invoices for provision of
materials, etc. Thus, pressure for action has arisen in particular in the context of invoicing.
The situation within the different energy utilities has become serious because the rising number of
paper invoices cannot be economically handled with the existing invoicing capacity. Though the
exchange of electronic documents (e. g. Excel) has helped in some areas in the short term, it is not the
right instrument for efficiently handling transactions of this order of magnitude.
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Use of encryption and digital signatures in the European energy sector
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Besides, confidence in the integrity (consistency, correctness) of electronic transactions is needed in
order to achieve a higher acceptance of these procedures. Confidence in non-transparent procedures is
lower than in verifiable, non-contestable procedures. In particular, it frequently happens that several
entities are involved in the handling of billing data. Therefore, the data source, i.e. the sender, must
ensure the integrity of data from the outset. The recipient must be able to authentically identify the
data source/sender to ensure non-repudiation.
2.2
2.2.1
EDI relevant transactions and their requirements in terms of security
Invoices/credit notes and accompanying information
For a commercially-valid accounting transaction, all documents relevant to credit and debit entry need
to be taken into consideration. In addition, eligibility of invoice data is of particular importance to the
tax authorities where tax deduction on turnover.
Example of German legislation:
If solely electronic invoices and credit notes are to be exchanged without any accompanying
(paper) documents, they are subject to the legal requirements according to Section 14 of the
Income Tax Law that took effect from 1st January 2002: a qualified digital signature with
provider accreditation according to the Digital Signature Act is required in Germany by law.1
From the viewpoint of tax authority auditors, invoices, remittance advices and metering data in
electronic form all contain information relevant to accounting procedures; hence they are of legal
relevance to invoices and credit notes. The invoice message type covers invoices and credit notes,
remittance advices are payment notice messages which refer to the invoice in a payment transaction.
The metered data messages represent the values of consumption to be invoiced. These last two
message types constitute accompanying information to an invoice, having a document character
according to generally accepted principles of accounting.
Thus, these transactions are also to be signed digitally if only electronic exchange of invoices is
desired in business-to-business relationships of market participants.
EDI in the form of market interfaces thus organizes communication between market participants.
Metered values are however often transmitted, prior to the electronic invoicing process, to the metered
values database by internal or external network operators. As the transactions concerned are generally
confidential and effectively have an equivalent monetary value, the authenticity of the source and the
integrity of data have to be ensured. The technology used is based on public key infrastructures and
asymmetric cryptography.
2.2.2
Customer master data
Master data regarding customers, contracts and metering points which are transmitted through the
appropriate message type are also sensitive data. Data with the appropriate classification needs to be
safeguarded according to the specifications of data protection legislation. Negative examples from
other branches show the possible consequences of irregularities. Reports of illicit access to data by
hackers or insiders have already in many cases led to substantial damage to a company’s image. A
drastic example is the case of a large German bank whose stock price slumped in 2001 by almost 10%
for several days. In the medium term, such events frequently lead to calls to tighten up the legal
situation or increasing controls through supervisory boards (financial services supervision).
2.3
1
Traders
This reference legal situation is described in detail in Chapter 3.2.3.
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Traders assume a special role as market actors when trading in energy supply services. They purchase
energy from their own or external power generators and associated companies or through the Power
Exchanges, e. g. in Amsterdam, Leipzig and Oslo. Energy is sold to suppliers or network operators.
Thus, the message types




schedules
metered data
invoice
payment advice
all play an important role both in the internal and external relationship of any corporate group and
should as a consequence be adequately secured.
The contents and time-constraints of transactions need to be documented in legally binding terms. To
this end, telephone transactions are frequently tape-recorded today so that the time is simultaneously
documented. For all Energy Exchanges, electronic trading is increasing in importance. The Exchange
market has developed into a virtual market place. Errors attributable to a change of media (paper,
electronic, voice) and the resulting transactional errors can lead in many cases to considerable
investigative expenditure which may cause substantial costs for a just a few financial transactions. The
liability mechanisms discussed later in this paper can lead to improvements in this field.
2.4
Political framework
In the example of energy supply companies in Germany, all participants are interested in maintaining
the associations’ own guidelines and hence voluntary commitment to contribute to the successful
organization of market interfaces. If they were no longer able to do so, laws and a regulatory authority
would have to be established like in the communication branch to enforce the further deregulation of
the market.
The introduction of digital signatures is an important prerequisite for the implementation of binding
business transactions between market participants. This contributes to minimizing potential conflicts –
which are always counterproductive to the organizational aspects of a technically and economically
networked sector, such the energy market.
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Use of encryption and digital signatures in the European energy sector
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3 THE LEGAL FRAMEWORK IN CONTEXT
3.1
Global situation
In nearly all Western countries, digital signatures are an accepted legal (though not yet universally
implemented) method to ensure the authenticity of the sender and the integrity of transmitted
information. Appropriate certification infrastructures (Public Key Infrastructures) are being
increasingly established within trade and industry and in public administration.
Internationally, three standardization authorities (CEN/CENELEC, ETSI and ISO/TEC JTCI) have
given an important impulse to European digital signature standardization (see EESSI Steering
Committee).

In technical terms, the work was organized within the E-SIGN standardization bodies and
other committees (such as for mathematical algorithms).

In political terms, Article 9 of the EESSI Steering Committee had a decisive influence on the
EU Directive.
In Europe, this European Directive was adopted by the heads of states and governments in autumn
1999, and put into force in January 2000 meaning that it had to be implemented into national
legislation by all participating states within 18 months. Subsequent harmonization has been pursued
e. g. through the “SmartCards eEurope” initiative. On the basis of Finnish proposals, this committee
also discussed a Europe-wide electronic identity card with digital signature.
The USA has given the use of electronic identity cards a legal basis (21 CFR Part11 of the USA); one
of the largest Public Key infrastructures worldwide is maintained by the Canadian government.
However, the North American approach leaves the initiative rather to market participants. The initial
approach of (continental) Europe – based on the EU Directive – led at the start to difficulties caused
by evaluation requirements (organizational and technical) of the field of application surrounding
qualified digital signatures and also due to legal requirements concerning regulation of liability. On
the other hand, this facilitated the establishment of a secure legal foundation in the medium term,
especially where manual and digital signatures co-exist legally and liability is guaranteed by
certification service providers.
Japan has since adopted large parts of the legal position of Germany, launching a 160 million Dollar
project for national SmartCards with digital signatures that are also capable of storing applications of
non-governmental organization at a later date (helping to minimize total costs and provide value added
services).
The financial sector is a further important driving force. The business-to-business approach is shown
by Identrus where member banks can market certificates for digital signatures worldwide to corporate
clients on the basis of extensive liability guarantees. The root certification authority („Root-CA“) is
located in New York. The business-to-consumer influences, as in the case of banking cards or in pointof-sale transactions, are also important. The introduction of the Europay/Mastercard/Visa standard
(EMV) for banking cards has been a driving factor in almost all Western countries. The current
functions of magnetic strips are gradually being replaced globally by microchip technology. This gives
rise to enormous savings in transaction costs, higher resistance to forgery and new value added
services, like bonus systems, etc.2
2
In January 2005, about 80,000 cash machines and 350,000 POS terminals were switched over to these new
technologies in Germany.
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Use of encryption and digital signatures in the European energy sector
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This branch shows that the use of advanced digital signatures with a high security level in technical
and liability terms can also be increasingly importance in the legal framework of business contracts (as
in “General Standard Terms and Conditions”). Today, an inquiry for pension details can be addressed
to the German Federal Insurance Office for salaried employees by means of a banking card and digital
signature.
3.2
Example application of European directives – the legal situation in Germany
In Germany, the European Directive was implemented into German legislation through the Digital
Signature Act of 21 May 2001 and the Signature Ordinance of 20 October 2001.
3.2.1
Status of legal documents
Changes to the form requirements in private law (which became effective as on 1 August 2001) now
permit the electronic form of documentation (when verified with a digital signature) in many different
legal areas of the German Civil Code. Thus, there exists a legal foundation within national legislation
scope and security of liability within the European Community (NB. encryption is not subject to
statutory provisions but is left exclusively to the discretion of communication partners. However, if
document encryption is used for example for documents relevant under tax aspects, this will have an
impact on data access for periodic tax examinations).
The most important difference as compared to the paper form is the reversal of the burden of proof in
the case of legal assessment of digital signatures on electronic texts as evidence in legal proceedings.
The reasons for this are mainly consumer protection aspects. If today a party in a legal proceeding
submits a (certified) document, the opposing party must prove the falseness of this document in case
of doubt. But the legislator did not expect of the consumer as opposing party to be forced to prove the
falseness of a digital signature to an authority or to a company.
Additionally, areas have now been specified where manual signatures have been equated to qualified
digital signatures (in Germany with provider accreditation for the certificate).
It is also for the sake of consumer protection that e.g. a savings agreement with a building society can
be signed electronically because explicit decision-making can be assumed for this declaration of
intent. On the other hand, a consumer credit agreement which can also be concluded with a car dealer
or furniture store must still be signed manually. These examples show the possibilities and limits of
the use of digital signatures in business or in contacts with public authorities (B2C, A2C).
However, digital signatures do not have any perceivable specific legal consequences within electronic
business transactions via EDI processes (e. g, EDIFACT or XML). Nevertheless, only qualified digital
signatures qualify within the public legal scope where they are defined as equal to manual signatures.
Provider accreditation of the “trust center” by the German regulatory authority for electrical and gas
supply, telecommunication and postal services (REGTP) thus guarantees liability without bilateral
contractual relationships within the scope of customary general terms and conditions. Certificates are
still expensive in general; they require specially authorized hardware and are restricted to natural
persons.
Within the scope of the legal framework governing formal requirements the legal written form
(covered by signature and witnessed by a notary public) has been extended to include the electronic
form. This requires in addition the name and a qualified digital signature. Some EDI transactions in
the electricity industry represent declarations of intent in the framework of a bilateral
contract/agreement on electrical supply within the meaning of the so-called voluntary written form
(e. g. schedules) but unless a further intention is explicitly specified, transactions can be covered by
advanced digital signatures. It can thus be concluded that the exchange of a declaration of supply and a
declaration of acceptance, each with an (advanced) digital signature will suffice.
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Use of encryption and digital signatures in the European energy sector
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In the general context, it has to be noted that electronic messages need to be handled now much more
carefully than in the past. According to previous reasoning, electronic messages did not represent
documents associated with business risks, but after the amendment of the German Civil Code the
electronic form can now legally replace the written form. Thus, electronic documents and traditional
business documents are equivalent. Nevertheless changing the information carrier does not change
anything in the objective to make business relationships legally transparent. This, then, also leads to
the necessity to provide information (at least in signed mails) equal to that required in business letters
and on letterheads.
At company level, digital signatures and encryption are not questioned as far as standard applications
(e-mail, remote LAN access, etc.) are concerned. At the application level, however, there were only
few reports about consistent implementation of „PKI-Enabling“. Indeed, a decision in this respect
should be taken on a case-by-case basis under economic aspects.
3.2.2
Principles concerning access to and verifiability of digital documents and consequences within
archiving processes
On 1 January 2002, formal requirements concerning financial documentation of business activities
were considerably eased. With the exception of the notes added to the balance sheet and the annual
report, a company’s accounting can theoretically now be realized in a paperless form since this date.
On the other hand, “immediate” (formerly “adequate”) access to the archived data relevant to taxation
and to their processing systems is now required by the tax authority for periodic tax examinations.
On the one hand, this gave rise to new rationalization potential in electronic data processing, and on
the other hand, to further requirements if this rationalization potential is to be utilized, for instance, by
the use of digital signatures. These requirements on verifiability and archiving have been laid down in
a widely discussed regulation of the Federal Ministry of Finance3 (described in a paper of the Federal
Ministry of Finance of 16 July 2001 - IV D 2 - S 0316 -136/01-).
However neither preliminary processes resulting from purchase, production and sales nor
supplementary processes like collective cost, clearing and final accounts/reporting proceedings are
affected, but audit requirements concern exclusively financial accounting with its active accounts. For
all documents that have to be preserved for a specific period, the principles of adequate and orderly
accounting shall apply, whereby the possibility of subsequent modifications through the accounting
system must be excluded from the beginning. The use of qualified digital signatures gives rise to new
requirements concerning procedures and procedure documentations attributable to the requirements of
the aforementioned regulations.
Accordingly, the relevant verification keys have also to be archived in the case of electronically signed
documents. Where cryptographic procedures are used, both the encrypted and the decrypted versions
as well as the keys utilized need to be archived. For conversions into data formats which are not in
current use, the two versions have to be archived together. Concerning documents that have to be
preserved for a specific period, a record has to be made of their entry, further processing and
archiving. This is all very complicated, but the history of information technology shows that this
challenge can be coped with. The transition from microfilming to optical archiving was a similar step.
As a consequence from the guidelines, large German companies decided already to make the ERP
system (e.g. SAP) NOT accessible to financial authorities. Therefore, a working group was founded by
the association of German SAP users aiming at defining a downstream SAP module with the working
title: DART (DART = DATA RETENTION TOOL) with a view to avoiding complete transparency of
internal cost center transactions. In this context, a compromise has to be sought between a decision
Principles concerning data access and verifiability of digital documents (German abbreviation: GDPdU –
„Grundsätze zum Datenzugriff und zur Prüfbarkeit digitaler Unterlagen“).
3
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Use of encryption and digital signatures in the European energy sector
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made by the tax court of the city of Münster on 28 August 2002 (“cost centers are relevant in terms of
audits”) and complete transparency of internal and international transactions.
DART provides a data extract with a high rate of compression (first figures: 1:25, meanwhile these
figures have been somewhat normalized by SAP). Irrespective of these activities, archiving
requirements have been increased with a view to paying attention to the requirements of GDPdU. The
elaboration of a code of practice for data extraction, preservation and reproduction becomes
indispensable to many companies. Goal is, on the one hand, to reduce the data (of finalized operations)
in operative systems and, on the other hand, to archive (electronic) records required for a complete
examination of facts.
Not least in this context, legal and auditing requirements determine the requirements to be met by the
technical and organizational framework for the use of digital signatures in companies.
Until 31 December 2001, there were only two types of documents for long-term archiving:


signed, paper documents
electronic documents
From 1 January 2002, GDPdU additionally prescribes archiving of


signed electronic documents
key generation & archiving in conjunction with signature validation mechanisms.
For manual signatures, the identity and legitimacy of the signer has to be ensured in an audit-proof
manner through signature regulation. The same applies now to digital signatures. It has become
general practice for this purpose to use the “PKI Policy” or the “Certification Practice Statement”
documents. It has to be emphasized that not the digital signature but the new legally admitted
possibilities of handling digital signatures, and market pressure compel each company to deal with this
subject-matter. The signature only serves to provide security for legal documents or accounting
vouchers in their respective form.
3.2.3
Consequences from the Act amending taxation on company turnover
The term “invoice” is defined in German legal terms (this definition is of particular economic
importance to input tax deduction) as follows: “An invoice is any legal document through which an
entrepreneur or a third party acting on his behalf accounts for a delivery or any other service to the
account of the recipient of the performance”. In terms of turnover tax, invoice and credit note are to be
handled virtually equally4.
A second sentence was added to this paragraph which became effective on 1 January 2002: “An
invoice is also a statement of account bearing a digital signature in accordance with the Digital
Signature Act of 22 July 1997 (German Civil Code - BGBl. I 1879, 1872), as amended”.
Pressure from industry made the financial committee of the German Bundestag discuss relaxations
even before entry into force of the turnover tax amendment law. At European level, too, it was
recognized that electronic business must not be excessively burdened. Therefore, the 6th ValueAdded-Tax Directive (77/388/EEC) was amended through Directive 2001/4/EC by a decision of the
Ministers of Finance on 4 December 2001. The Directive was formally adopted by the member states
and published on 17 January 2002.
Though digital signatures (contrary to electronic invoices) are no longer explicitly mentioned in the
EU Directive, an important aspect of this amendment is that it maintains strict security requirements,
4
Turnover Tax Law (German abbreviation: UStG – Umsatzsteuergesetz; section 14, paragraphs 4 and 5).
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which are imperative for standardized EDI transactions. This legal development shows, on the one
hand, that free electronic business should be promoted; but on the other hand, digital signatures are
used primarily in Germany as a means to curb value-added-tax evasion totalling an estimated amount
of more than 10 billion € (with a high number of undisclosed cases). After implementation into
German legislation on 1 January 2004, advanced digital signatures are sufficient in the case of EDI
invoices eligible for input tax deduction without accompanying paper documents. In any case,
1. adequate procedures are required for security integrity and authenticity;
2. accompanying paper documents (turnover tax unit billing) can be required where digital signatures
are missing.
Hence, only the use of digital signatures enable invoices and other message formats to be exchanged
in a paperless manner by the energy industry.
4 TECHNICAL STANDARDIZATION
4.1
Digital signatures and EDIFACT
4.1.1
Progress of decision–making by the EDIFACT standardization bodies
At the project meeting of NBü-AA3 on 31 July 2001 at DIN in Berlin, the “Digital Signature Working
Group 3.5” was founded (see NBü-AA3 No 85-2001). This Working Group was charged to set up one
or several guides on the EDIFACT message AUTACK “security, authentication and confirmation
message”. The basis for this work is the matrix established in June 2001 (see NBü-AA3 No 53-2001),
finalized in the version 7/2002.
4.1.2
Discussed alternatives for implementation into EDIFACT
designation
Alternative 1
Two-Interchanges approach
characteristics
user data + AUTACK in
separate transmission files
user data: syntax V1-V2-V3V4
AUTACK: syntax V4
benefits
Syntax version neutral (user
data)
hardly any changes of actual
situation required (only
additional AUTACK)
clear-cut separation between
user data and signatures
drawbacks
organizational expenditure to
the recipient for uniting,
checking, waiting (for other
file)
archiving difficult
ebIX
Alternative 2
One-Interchange V3/V4
approach
framework: syntax V4
user data: syntax V4 used in a
downwards compatible
manner (in fact syntax V3)
AUTACK integrated (syntax
V4)
user data: syntax version
neutral
user data framework:
minimal syntax V4 (only 8digit date)
hardly any changes of actual
situation required (appended
AUTACK)
clear-cut separation between
user data and signature
simple archiving
Alternative 3
Integrated Syntax V4
approach
user data: syntax V4
embedded security
segments of syntax V4 are
utilized (header-/trailer
concept)
no utilization of AUTACK
simple archiving
dates and signatures
readable/processable in a
data current
only feasible with syntax
V4
complex processing at the
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Meanwhile, an option was made on variants 1 and 2 (alternatively One-Interchange approach or TwoInterchange approach with syntax downward compatibility). This option was essentially refined during
the session of DIN NBü 3.5 of 8/9 January 2002 to be adopted in 7/2002. The draft standard consisting
of 2 parts has been available to the public for comments since as early as February 2002 under DIN
16560-15 and DIN 16560-16.
In parallel with the AUTACK message type which governs digital signatures in EDIFACT by means
of asymmetrical cryptography, attention was paid to the requirement of practicable key management
for secure transmission of public keys. The KEYMAN service message type needed for this purpose
was embedded in the framework of AUTACK application rules because key management can only be
practised if it is safeguarded through integrity and authenticity information. It has thus to be treated
like reference data, secured by AUTACK
4.2
Digital signatures and XML
Mainly as a result of the advance of e-business (defined here as electronic business processes going
beyond company borderlines) the XML data format standard has developed during the past few years
into a widely-spread, de-facto standard. XML is a standard that is intentionally simple in technical
terms (Syntax). Nevertheless, standardization needs to be pursued because branch-specific exchange
formats must be built up (semantics).
According to the PKCS#7 standard of the RSA Company, XML documents can also be signed
electronically. However, this “PKCS#7 container” has certain drawbacks which contravene the
benefits of XML. This applies generally to EDI immanent procedures as opposed to PKCS#7 which
allow more favourable support processes in economic terms. Therefore, at the beginning of 2001 the
draft RFC 3075 (XML signature syntax and processing) was adopted in the XML world (XML-DSig);
it does not exhibit the aforementioned drawbacks and eliminates in addition the deficits of the
PKCS#7 signature (e.g. possibility to sign parts of a document). Since early February 2002, and hence
after a remarkably short period, it has also become a proposed standard of IETF.
XML encryption is also a subject-matter of intensive standardization activities. However, stable
standards have backlog of about 1 year as compared to XML-DSig. XML signatures are available in 3
different variants that can be combined with each other:



enveloped signatures
enveloping signatures
detached signatures
At the generic level, the following can be said about these terms:
- Enveloped signatures
Require dedicated application or document design. Hence, they are 'only' suited to data objects to be
generated in future.
- Enveloping signatures
Particularly suited to messaging services or services allowing for one-time validation. Can 'wrap'
existing data objects; thus, they can be relevant to migration scenarios. Consequently, it is suited to
already existing data objects, which are however transformed.
- Detached signatures
Particularly suited to security add-ons to existing data objects which cannot or should not be modified
(or wrapped); example: authenticated SW distribution.
Within the existing context of branch requirements, types 1 and 3 are particularly interesting. Type 1
can make use of new features of XML signatures, like the signature over parts of the message where
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for instance no legal responsibility is to be assumed for part of the message to be forwarded, which is
thus not to be signed (again). However, type 1 revolves in a pure XML-imminent environment which
still needs to be established in terms of applications. Type 3 may become interesting when data and
signature can or must be separated. Unchangeable data like metered values can be forwarded together
with a clearly defined link to the signature (Unified Resource Identifier, URI).
Easy readability of XML documents is not affected by the XML-DSig signature standard, and is
beneficial e.g. in full text retrieval. The introduction of XML and XML-DSig is in particular
reasonable if different distribution channels (e.g. Web and WAP) support different formats
(“Stylesheets”) in a business transaction. Though pure XML implementations have existed sparsely to
date in established EDI structures, the majority of analysts believe that this is the technology of the
future. Therefore, new implementations should be based on a strategic decision on whether XML can
be used as EDI format.
4.3
Digital signature and e-mail
The S/MIME format can be considered today as an accepted standard worldwide. Other standards for
securing e-mail like PEM and PGP are declining in importance. However, one should be aware of
certain restrictions. With S/MIME the signer is identical with the sender. Therefore, S/MIME does not
support multiple signatures as they are for instance required in business letters or in other ranges of
application with multiple responsibilities. And with S/MIME, the text and attachments are packed up
in a “sealed” container. Archiving and retrieval incl. full text search is thus more time-consuming than
signature and encryption at data level.
In Germany, implementations based on the S/MIME standard were subjected to a large-scale
interoperability and practice test within the scope of the SPHINX project. To prepare the wide-spread
introduction of these safety measures, the German Federal Administration, the coordination and
advisory bureau of the Federal Ministry of the Interior in cooperation with the Federal Office for
Security in Information Technology, carried out the SPHINX pilot test on “end-to-end-security for
electronic document exchange”. The pilot test consisted of several phases. Phase 1 started on 1 April
1998 and was terminated on 30 September 1998. Phase 2 started on 1 October 1998 and continued
SPHINX until 1 March 1999. The following objectives were pursued by SPHINX:



testing of functionality and interoperability of security solutions of different providers,
gaining experience in terms of user acceptance and
assessment of the personal, financial and organizational expenditure to the authorities concerned.
The German Bundestag, numerous German Federal Ministries and authoritative institutions of the
German Länder and different companies have participated in SPHINX. More than 30 organizations
were represented. PCs of approx. 400 participants in the pilot test were equipped with software which
enables messages to be encrypted and decrypted, and digital signatures to be signed and verified. Part
of the users applied chip cards where the private (secrete) key was stored. These workstations were
additionally equipped with a chip card reader. The hardware and software used were produced by
eight different firms. These technology providers all passed the relevant interoperability tests:
The interoperability criteria obtained through this type of practical test for encrypted and signed emails should also serve as an example for e-mail exchange between industry participants.
4.4
4.4.1
Interoperability of digital signatures
ISIS-MTT standard
Compatibility or interoperability between providers of qualified certificates does not yet exist per se.
This applies as well even to accredited providers of certification services according to the German
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Digital Signature Act. Two committee standards and a proposal of the German Federal Ministry for
Security in Information Technology (BSI) are available which are overlapping to a large extent.



MTT (MailTrusT V 2.1) of TeleTrust e.V. from the SPHINX project.
ISIS interoperability standard of the T7 Trustcenter working group of (Industrial Signature
Interoperability Specification V.1.1), and
SigI, a specifiation proposal of BSI
The Trustcenter association T7 has meanwhile agreed with TeleTrusT on a common standard (ISISMTT). However, full interoperability has not quite been achieved. The project is actively supported by
the “Fraunhoferinstitut für Sichere Telekooperation” and promoted by the German Federal Ministry of
Finance.
The reason for the specification of ISIS-MTT is the large variety of possible interpretations of a
certificate that needs to be evaluated in terms of data processing according to the X.509 standard
(Version 3). Therefore, a practicable development basis must be provided to trust centers and clientsoftware producers. Simultaneously, a text suitable for tendering procedures must be available to
professional users. A label/quality mark is being developed with a view to increasing product
acceptance.
4.5
Validation of digital signatures across association boundaries
The validation of the signature’s authenticity and the data’s integrity by the mechanisms of digital
signature through the signer’s public key and the comparison of hash values is of decisive importance
to the complete scenario and needs to be manageable in technical and organizational terms for further
e-mail applications. The validation of signatures is a requirement concerning interoperability; but its
practicability is of decisive importance for success in practice. Therefore, in Germany, the Digital
Signature Act and the underlying DIN-standard define a relatively simple hierarchical structure which
comprises of only two stages. And here is why:
Unconditional confidence must be placed in the Root Certification Authority which rests with the
appropriate regulatory authority as far as qualified signatures with provider accreditation are
concerned. Its private key undersigns the public keys of accredited certification service providers
(“trust centers”).
With their private keys, the latter undersign the public keys of the signature key holders after proper
registration of the user and after unequivocal identification by means of personal documents (e.g.
identity card/passport) and make these certificates available to the public; thus, they guarantee the
correctness as defined by the liability provisions of the Digital Signature directives. Validation means
the prompt verification of this certification chain with regard to unrestricted consistency. There is
therefore no doubt that this strictly hierarchical validation chain of only two stages offers certain
advantages.
However, these certificates are today (still) expensive and bound to natural persons. Qualified
certificates do not comply with the requirements on server certificates for client/server authentication,
encryption certificates with their requirements on recovery mechanisms, certificates for crypto
hardware, certificates for legal persons, certificates needed for meters, etc. Advanced certificates
which can be generated, for instance, in companies’ PKIs are recommended for these purposes. These
signatures are often referred to as not complying with the Digital Signature Act, which is not quite
correct. These signatures were also defined in the Digital Signature Act, but they were not put on a
level with manual signatures.
If advanced signatures are also used by market participants (which is advisable), it is necessary to
organize the „confidential relationships“ that can be automatically validated among business partners.
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A cross certification must be provided for the extreme case that every employee/operation participant
be able to trust every employee/operation participant of the corresponding partner company.
In case of lower requirements, it is possible to safely exchange only root certificates of partner
companies, and to operate “black lists” (certificate revocation lists, CRLs). In this case, the validation
path is extended with the corresponding organizational and technical consequences. Moreover, this
procedure needs to be moderated at the introduction stage, and administered in operation through a
neutral trustworthy third party, or associated with undisputed criteria which have to be strictly
observed by parties participating in the procedure.
The latter procedure is a reasonable alternative with good chances of success in the energy sector
because regulation needs which have been required to date could be adequately agreed. Nevertheless,
prior to the commencement of operation, liability issues should be settled and determined in political
terms within the scope of sectoral agreement.
Depending on individual applications, a combination of advanced and qualified signatures will
therefore exist in practice, which are validated on a consolidated data base (directory) by means of a
standardized protocol (i.e. LDAP). External directory information is timely received from the partners
in the case of advanced signatures, or from certification service providers in the case of qualified
signatures (accredited “trust center”).
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5 PRACTICAL APPLICATIONS
5.1
General requirements on the use of digital signatures
The use of digital signatures in the energy industry has far-reaching long-term effects of a technical
and mainly organizational nature.
The signature for metered data would be at the beginning of a series of sequences. It is economically
reasonable to invest early in technologies with short key lengths. To this end, it may be advisable in
future to use algorithms operating with the mathematics of elliptic curves. Even though public key
infrastructures using common RSA algorithms with more than sixfold key length emerge today within
associations, the compatibility of procedures must be ensured in the field of metrology and with regard
to EDI market interfaces and internal procedures.
5.2
Approach in EDIFACT Invoices (EDIFACT-immanent signature)
To be able to generate a digital signature after invoicing for presentation to the local tax office for
input tax deduction, the following organizational structure may be used as a basis:









Individual invoices and the collective invoice list are generated in the ERP or accounting system
and released for transmission to the EDI partner5.
These released basic files (individual invoices and collective invoice list) are transferred to the
EDI system.
The EDI system is equipped with a security module (to be defined in a later document).
The security module checks the basic file and generates a hash value of the basic file.
The hash value is signed with the private key of the sender (releaser)6.
The signed hash value is generated into an AUTACK message type.
This AUTACK is attached to the original basic file
(INVOIC01+INVOIC02+INVOIC03+…..+INVOICn).
This gives rise to an EDIFACT transmission file with the following content:
(INVOIC01+INVOIC02+INVOIC03+…..+INVOICn) + AUTACK
The contents of the AUTACK thus generated can be described for instance in a guide which is an
integral part of the PKI policy or which the policy is referring to.
Remarks on the legal security of this solution:
An audit for tax reasons or other grounds represents an audit of facts. There are no formal
requirements upon the invoice format but only on signatures (qualified digital signatures, current
status in Germany with voluntary provider accreditation) due to the new legal situation. The EU VAT
Directive of 17 January 2002 set an additional legal framework. Its implementation into national
legislation is instrumental.
“Released” means an organizational step which needs to be set up in addition or which may result
from the activation of automatic billing.
6
In this respect, the future legal situation will be of decisive importance. If signatures are applied that
comply with the Digital Signature Act and are bound to the natural person, release will have to be
explicitly established; alternatively, higher automation levels and assignment of the operation to the
legal person may be possible. First experience gained with financial authorities show that a pragmatic
approach is by all means possible. In any event, the decisive criterion is the overall context in which
business transactions need to be inversely and progressively auditable. The progressive audit extends
from bookkeeping record over the basic records to accounts and finally to the profit and loss account
or self-assessment / tax return, respectively. The inverse audit is carried out vice versa.
5
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So, the current legal situation permits the interpretation that individual invoices have to be signed
electronically. Although this will probably not be necessary – even if the requirement for qualified
digital signatures with provider accreditation and thus for full compatibility with the Digital Signature
Act and natural person as signer – is maintained.
Non-EDIFACT-immanent signatures are conceivable and unproblematic in legal and technical terms.
They should be applied where files are signed (so-called PKCS#7 signatures). For signatures on the
basis of EDIFACT, it is expedient to use the AUTACK message type. It saves an additional step of
processing.
5.3
Time stamp service
Some pecuniary or mandatory processes in business transactions between market participants are tied
to specific times and may thus require urgent treatment. An example in this context is schedules.
Therefore, it may be reasonable to receive confirmation of the time of a data transaction.
An accredited time stamp service is based on the principle that it provides data (including signed data)
with the legally valid time and signs them together with its private key (accredited by the appropriate
regulatory authority). Subsequently, the data treated in this way are returned to the original sender.
The rules in Germany for the time stamp service are laid down for example in Section 9 of the
Signature Act; here, the time stamp on the hash value is sufficient.
Though data generated thus is time limited in the past, the further transmission of data to the recipient
is not recorded, i.e. that the time stamp service is not suited as sender evidence. Sender evidence is
furnished only through forwarding of data by the certification office, i.e. the time stamp service. This
is however not a mandate determined by law; respective rules have to be defined in individual
business transactions. Hence, the time stamp is not like a mail stamp on a letter handed over at the post
office counter. The sender gets the stamped “letter” back for forwarding it to the receiver!
A possible organizational solution is to have a time stamp put on the recipient’s automated receipt.
This is recommended e.g. in the e-government manual of the BSI (German Federal Office for IT
Security) for time-critical operations carried out within the German Federal Administration.
Absolute security is thus only given where the stamped delivery, analogous to a mail stamp, is
accepted by a trustworthy third party. One solution on offer adds the previously time-stamped hash
value in a given form to the document (e.g. invoice). To this end, the sender needs generating software
(“write version”); the recipient is able to download a “read version” free of charge from the Internet
and thus validate the time stamp.
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6 IMPLEMENTATION AND BEST PRACTICE RECOMMENDATIONS
Realization of security in the energy industry’s electronic legal relationships and business
transactions
6.1
No market participant can be compelled to apply digital signatures and encryption unless it is bound
by law to do so, for instance in the case of electronic invoice transmission where an application was
made for eligibility for input tax deduction.
On the basis of a bilateral, multilateral or, ideally, sector-wide agreement, criteria should be
determined in particular for signed electronic data exchange. Where these criteria are fulfilled by the
concrete communication partner, market participants should undertake, also on the basis of a sectoral
agreement, to use digital signatures and encryption, where necessary. However, also outside the
statutory legal framework of qualified digital signatures with provider accreditation (according to the
relevant legislation), this must lead to security of non-repudiation for all market participants receiving
an (advanced) electronically signed transaction from another market participant.
Most of the criteria for qualified signatures are defined by law. The following main criteria apply to
advanced signatures (e.g. mutual acceptance of company PKI certificates):


uniform security level of participants, as a matter of principle,
easy public key accessibility also for advanced signatures, i.e. publication of a subset of directory
information (generally on the Internet) for other market participants.
The technical and above all the organizational security level should be defined by baseline IT Security
specification, unless of course higher criteria are applicable. Current signature rules applied in
different companies to comply with audit requirements, particularly in business transactions with other
market participants, need to be introduced in technical and organizational terms into a PKI policy or a
Certification Practice Statement as far as digital signatures are concerned. The observance of the
security level provides the basis for a confidence model like the Public Key Infrastructure used across
company boundaries.
Information-bound, certificate-based encryption and simple validation of electronically signed data in
terms of the sender authenticity and the data integrity assume that the public keys of communication
partners, certified to be correct, are easily accessible and reliable with regard to their current validity.
This guarantee is given for “qualified” certificates, i.e. for key material that was certified by an
accredited certification service provider
In the case of advanced signatures which, for instance, were certified in the framework of a company
PKI, a publication or, where necessary, a prompt revocation of the public key must be ensured if the
owner of the signature key participates in the market. Simple signatures, such as scanned signatures,
have no importance.
Vice versa, market participants accepting electronically signed messages from other market
participants should undertake to



accept digital signatures and sender identifications of their communication partners for verification
of legal liability, integrity and authenticity, to the extent that they guarantee sufficient security in
terms of the application (the “acceptance criterion”),
if the document transmitted corresponds to the adopted market interfaces, e.g. EDIFACT, XML,
etc. (the “document compatibility criterion”);
to make their certificates available with public keys for encryption or for validation of signatures
(the “publication criterion”);
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23
to encrypt the data of their communication partners in online transactions and to provide them as
agreed with an advanced or qualified signature (the “criterion of voluntary commitment”).
All EDI message components needed for electronic invoicing, and all declarations of intent with the
character of a legal document require a qualified signature with provider accreditation.
Other EDI types of messages between market participants must be signed at least with one advanced
signature (example legal framework: General Standard Terms and Conditions, or Association’s
agreement), but they can also bear a qualified signature (example legal framework: German Digital
Signature Act).
Informal valuable or binding declarations of intent, sent e.g. by e-mail, are signed and, where
necessary, encrypted depending on the degree of confidentiality.
Market players participating in the process shall ensure that they use in their function as
communication partners an appropriate verification software for verifying liability on the basis of the
two legal frameworks mentioned above, as well as the integrity of the message and the authenticity of
the sender.
6.2
General process for setting up public key infrastructures
Before discussing development steps, MAKE or BUY or even technical questions, it is advisable to
answer some basic questions concerning functions and applications for which certificate-based process
steps are necessary or rational. Applications should be segmented before determining the number of
users within these segments. In most cases, a first and simple step is e-mail encryption and signature
for selected workstations. More interesting in economic terms, however, are commercial applications
for which certificate-based mechanisms may be practical.
6.2.1
Possible process for the definition of business transactions/applications for which certificates
are to be used
Examples:
 Business transactions/applications are e.g. the generation of electronic invoices in the context of
Electronic Data Interchange, e.g. between members of VDEW
 other electronic declarations of intent with the character of a legal document (documents which
may substantiate long-term claims)
 transferring signature rules in the e-procurement context (EDI-based, e.g. schedule, or Web-based,
e.g. order for materials)
 transferring rules in the context of internal business processes which are to be authenticated on the
basis of certificates (e.g. SAP HR, Human Resources)
 Secure mobile workstation (e.g. remote LAN access)
 encryption of files
 etc.
Apart from legal requirements (concerning e.g. billing/electronic invoice), the possible litigation level
or other risk management considerations should be of particular importance. Subsequently, certificate
categories should be assigned to business transactions/applications (possibly with quantification). To
this end, the question has to be asked where advanced signatures are sufficient and where qualified
certificates (with provider accreditation) should or must be utilized.
The external PKI service provider as standard for the PKI should be selected analogously to other
outsourcing or out-tasking projects in the service sector, i.e. according to performance and service
level agreement.
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Creation of a decision matrix for the assessment of tenders submitted by certification service providers
is also useful here because some of the providers accredited today apply different philosophies with
regard to corporate clients. This matrix facilitates assessment and documentation for the selection and
recommendation of a service partner.
6.2.2
Registration process
The registration process ensures an unambiguous association between certificate and staff
member/user; thus, it substantially determines the PKI’s security level. The registration processes
related to the certificate category and the processes associated with certificate management should be
standardized internally unless they were determined by the external PKI service provider.
Therefore, the start-up phase and the operational phase should be determined clearly in advance in the
registration process, and implemented in accordance with audit requirements. For this reason, this
process is usually connected to the issuance of a new employee identity card. A multifunctional
identity card with contact chip or additionally with a non-contacting chip can address, apart from the
key material’s certification, a large variety of other functions, such as computer access, admittance to
buildings, payment in canteens, etc.
As far as qualified certificates are concerned, detailed specifications are usually determined by the
certification service provider. However, these specifications must always be synchronized with
internal mechanisms, e.g. for identity and access management, and in particular with the following
mechanisms:
 Conceptual design of the registration process for certificates which do not conform to the Digital
Signature legislation.
 initial issue (new certificate/SmartCard, collective request), follow-up issue (new keys, previous
SmartCard), issuance of replacement certificate/SmartCard (compressed), issuance of replacement
certificate/SmartCard (not compressed), return of replacement certificate /SmartCard, withdrawal
of certificate/SmartCard when leaving the company, blocking of certificate/SmartCard, description
of the recertification process after expiry of certificates (User)
The following proceduer is recommended with a view to successfully implementing standards for the
introduction and utilization of the basic PKI:



Selection of firm partners for the introduction and operation of the basic PKI and of certificatebased applications (preferred partner / products).
Definition of the internal ordering process for PKI services/products (definition of packages,
where possible). Definition of the functions of certificate purchase to limit “product variety”.
If certificates are frequently used for communication with external business partners (e.g. through
EDI) it is necessary to grant these firms access to the corporate directory or to make a subset of the
corporate directory available in a repository (cf. above). To this end, a new definition of firewall
rules may be required for access of partner firms to certificates in the corporate directory.
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7 OUTLOOK
Information technology and thus, in legal terms, the electronic form of almost all documents will
certainly extend in a growing number of areas of public life and business. This will also lead to an
increase in importance of digital signatures, whether advanced in the legal framework of a closed user
group, or qualified in the legal framework of a national signature law. This is the only way to ensure
verifiability/non-deniability and integrity of electronic information in legal terms and hence in a noncontestable manner.
Written signatures will have to be abandoned in any area where a change of media would impede
further rationalization.
Furthermore, more open networks (e.g. through wireless technology) will increasingly require
encryption at the information level, i.e. of the document itself. At the network level, re-encryption is
required, for physical reasons, prior to every change of the transmission medium. End-to-end security
exists only at the information level.
The authentication process in applications will be based to an increasing extent on certificates and less
on passwords.
For intelligent appliances and applications, digital signature will be the modern “seal” in data
transmission: it will secure data integrity irrespective of the transmission path.
The relevant technology is available now at reasonable costs. Certification service providers offer
keys, reader hardware and software plug-ins for standard mail systems at relatively low entry-level
cost so that small companies can also afford them. Manufacturers of EDI systems already have
solutions available, and are working on their harmonization with the new legal possibilities and the
requirements of data access and storage (cf. chapter 3.2.2).
Much more important than technology is the acceptance and the correct handling of the change of
paradigm associated with the digital signature as an alternative to the written signature. This is the
actual challenge that has to be coped with in order to consistently utilize the possibilities of the
electronic form, including digital signatures, for corporate development. Electronic business within the
energy industry and with its partners constitutes a practical entry-level in this respect.
ebIX
May 16, 2006