UAE – Electronic Transactions and Trust Services Law
On 20 September 2021, the UAE issued the new Federal Law No. 46 of 2021 on Electronic Transactions and Trust Services (“ETL”) which replaces the old Federal Law No. 1 of 2006, the ETL was issued under wide ranging reforms to the UAE Laws.
A number of improvements are brought about by the ETL, mainly electronic signatures would now be considered on par with handwritten signatures. Previously there were no distinctions, however under the ETL there are three types of signatures: the standard Electronic Signature, Approved Electronic Signature and Qualified Electronic Signature. Each of these signatures will have a corresponding level of security attached to it.
The law also calls for trust service providers who will be licensed by the Telecommunications and Digital Government Regulatory Authority (“TDRA”) and the TDRA will be the competent regulator and implementing authority for the ETL.
The ETL further clarifies all transactions can be entered into using electronic signatures unless restricted otherwise, whereas the previous law had built in exclusions on the use of electronic signatures. Transactions can be concluded using any medium and can be partially or wholly concluded using electronic signatures.
The ETL also stipulates provisions on the misuse of electronic signatures. Trust services providers and signatories may be held liable for unauthorised use of electronic signatures or seals and disclosure of confidential information. The ETL will be followed by implementing regulations from the TDRA which will detail the technical aspects of the law and the extent of its application.
The ETL goes into effect on 2 January 2022 and is expected to support UAE’s transformation towards adopting new technology and to spur growth of the digital economy. The grace period for implementation of the new law is 12 months during which period businesses in the UAE will be able to implement and adopt the ETL.