An Apostille is a verification that the notary public had authority to complete the notary act. Usually, the Secretary of State verifies that the notary is commissioned and had authority to act under that commission. Once prepared by the Secretary of State, the document is then attached to the notarized document.
This verification is used mostly in international trade. There became a need to standardize transactions among nations to make the process less complicated and protect against fraud. 80 members of the "Hague Conference" signed an agreement allowing for this method of standardization. Non-Hague treaty members use the Authentication method described below.
In case you are a history buff, the Hague treaty was originally signed in 1961. The United States joined the treaty in 1981.
There are still several types of documents that must be verified the US Department of State. These are basically federally signed documents and US military notarized documents.
You can see the State Departments list of documents to be verified here.
Authentication is usually done when parties to a transaction need verification that the notarial act was proper. Like the Hague method, Authentication verifies that the notary public had authority to notarize the document and was commissioned at the time of the notarization.
The Authentication is issued by either the county clerk's office or the Secretary of State. The Authentication document is then attached to the notarized document. This is procedure that is requested by an interested party in the document and not the notary.
Authentication can become tricky when it is used for international purposes. A series of verifications must occur. Usually starting with the County Clerk, then on to the Secretary of State, then to the foreign consulate in D.C. then on the the foreign nation's ministry. The Hague method described above is much easier. But if the nation is not a member of the Hague Conference, then Authentication is the route that must be traveled.
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