e-Invoice authentication in the UAE is performed by Accredited Service Providers (ASPs), also known as PEPPOL Access Points, in accordance with the PEPPOL framework specifications. ASPs must comply with the AS4 standards to ensure security during the storage and exchange of e-invoices across the network. The UAE e-invoicing digital certificate is another aspect of this standard that ensures the strict protection of financial data transmitted over the network, as well as the data's credibility and integrity.
How security works in e-invoicing
The UAE e-invoicing framework is based on PEPPOL’s standard global e-invoicing architecture. Instead of the PEPPOL’s standard 4-corner model, the UAE e-invoicing framework uses 5 corners, with the 5th corner denoting the MoF and the FTA. The 5-corner model is also called the Decentralised Continuous Transaction Control and Exchange (DCTCE). The security requirements and standards are the same, and the ASPs must meet them to qualify as service providers/access points for the suppliers and buyers.
According to Article 9 – PSP Product Information Security Requirements, ASPs must provide multifactor authentication, encryption (for data storage and transit), and constant monitoring. Let us look at these in detail:
Multifactor authentication
The primary concern is how authentication works in the UAE e-invoicing system. Multifactor authentication protocols have been implemented to ensure authorised users are granted access and protect the business’s financial data at all times. ASPs appointed by the UAE may use different multifactor authentication methods, but they must all align with the standards prescribed by the PEPPOL framework. Multifactor authentication is mandatory in all approved ASPs in the UAE. This enables the protection of the authorised user’s credentials and the access they can obtain.
Encryption and digital signatures
The AS4 is a standard used in the PEPPOL network. It is used to securely transmit and exchange e-invoices in the UAE. The authentication methods between Corner 2 (Supplier’s ASP) and Corner 3 (Buyer’s ASP), and between Corner 2 and Corner 5 (Ministry of Finance and Federal Tax Authority) must comply with the PEPPOL AS4 standards. The AS4 uses the PEPPOL PKI for digital signature and encryption on the AS4 message level. It uses the SMP/SML for dynamic discovery.
The PEPPOL network uses PKI to maintain network security and facilitate the exchange of e-invoices. It provides security and message data integrity for every e-invoice transmitted over the network. A PEPPOL PKI Certificate is awarded to the PEPPOL-certified service providers after they sign the PEPPOL Service Provider Agreement. This document contains a wealth of information to validate data exchanged on the PEPPOL network. The certificate is valid if the agreement is valid. If the Ministry of Finance finds that the service provider is in breach of the agreement, it has the authority to revoke the agreement and render the certificate invalid. The MoF is stringent, ensuring that only the most trustworthy service providers are approved and brought on board.
All data that is either in transit or at rest must be encrypted in accordance with the e-invoicing mandate. ASPs must meet this criterion to be eligible to provide services to businesses in the UAE. In the case of UAE e-invoicing, the supplier and buyer will exchange e-invoices in XML format over the PEPPOL network. Every XML e-invoice will be encrypted to ensure secure exchange. Encryption occurs at the second corner of the e-invoicing model as e-invoice data is sent for validation. This is the stage where the digital signature UAE e-invoicing takes place.
Regular security monitoring
ASPs subject to the UAE e-invoicing requirements must conduct regular security monitoring to ensure processes are secure and data is safe during storage, transmission, and retrieval. The MoF has included this clause to ensure lapses are fixed if they occur and to maintain data integrity as data is sent from one entity to another within the network. Regular monitoring also ensures visibility, compliance, minimal disruption, proactive decisions, and reduced damage costs. All businesses in the UAE must work with their ASPs to ensure regular security monitoring.
The FTA has implemented regulations to ensure that only ASPs that meet all security requirements can obtain accreditation. By providing encryption, multifactor authentication, and monitoring, they can ensure business data is securely accessed, transmitted across the network, and received by the buyer. It also ensures that storage security is maintained and that lapses are caught before they become a bigger problem for businesses. By using multiple security measures, the UAE is setting an example of good e-invoicing practices to facilitate secure invoice exchange.
