UAE Issues New Federal Electronic Transactions and Trust Services Law

The Telecommunications and Digital Government Regulatory Authority (TDRA) has established that Federal Decree Number 46 of 2021 on Electronic Transactions and the Credit Services Act sets a new stage for a comprehensive digital transformation in the UAE.

The new law supports improving the digital economy and brings the UAE to a position where it will be considered one of the leading countries in providing digital services. It will expedite the achievement of national goals and pointers, such as the Online Services Index (OSI), the Ease of Doing Business Index, the Global Entrepreneurship and Development Index, the Global Competitiveness Index, and the Innovation Indicators.

It introduces legal concepts in UAE law similar to the European eIDAS regulation to enhance legal certainty in electronic interactions. The law repeals the current Federal Law Number 1 of 2006 on Electronic Transactions and Electronic Commerce (the “Old Law”) with effect from January 2, 2022. However, there is a 12-month grace period that allows persons subject to the law to ensure that they are compliant.

The regulator of the law is the competent authority, the Telecommunications and Digital Government Regulatory Authority (“TDRA”) but the Federal Authority for Identity and Citizenship is the authority responsible for issuing controls with regard to the trust services provided to the government sector, and other services such as the Emirates ID.

“The issuance of the Electronic Transactions and Credit Services Law is entering into force at an important stage in the history of our country, as we celebrate the golden jubilee of the United Arab Emirates. At this point, we are starting a new chapter in the UAE Centenary 2071: “Promoting Digital Transformation affecting the economy, society, and the complete life of the United Arab Emirates.”

Majed Sultan Al-Mismar, Director General of the trade and development authority in the UAE, commented: “The issuance of the decree-law on electronic transactions and credit services marks the beginning of a new phase in the process of comprehensive digital transformation in the UAE. This law deals with many details about the daily lives of various segments of society, including individuals and companies, and will have a positive impact on the higher goals of the state in terms of promoting the digital economy and consolidating the global reputation of the United Arab Emirates as an investment center.”

Electronic identification permits businesses and consumers to recognize and authenticate their identities and it can also help to make the legal procedures more transparent to the legal experts.

Under the law, the Regional Trade and Development Authority issues rules, procedures, and standards related to electronic identification systems, verification procedures, and digital identity, after coordination with the concerned authorities.

What are trust services?  They are electronic services aimed to enhance the trust of citizens and companies in the security and confirmation of electronic transactions.

The law establishes a regulatory framework for the following four main types of trust services:

Electronic Signatures: The expression in electronic format of a person’s consent to the content of a document or data set.

Electronic Seals: An electronic equivalent of a seal applied to a document to confirm its origin and integrity.

Electronic timestamps: Evidence that a document exists at a particular time;

Recorded Electronic Delivery Services: Provides evidence of sending and receiving data.


Other Key Provisions

UAE Trust List: The TDRA can produce and publish a UAE Trust List which can list the licensees under the law and their trust services. For inclusion in the UAE Trust List, the regulations and conditions shall be designated by the Executive Regulations.

Trust mark: The TDRA shall give a trust mark which will be employed by approved trust service suppliers to point that they supply certified trust services that meet the requirements of the law.

Types of e-signatures- The Law seems to provide for the three following forms of e-signatures, with growing levels of security: