The revolution of the Internet has created a borderless world in which goods and services are offered around the clock and ordered at the click of a button. New international markets are opening up to the digital economy daily. The Internet has changed the manner in which people do business and communicate. In light of the technological advancements and ascension to the digital age, a new type of economy has emerged which depends on electronic transactions or e-commerce. The widespread acceptance of e-commerce has prompted the need to enact legislation governing all aspects of this trade.
The United Arab Emirates has a distinguished position in the region in respect of telecommunications and the Internet. In addition, Dubai realizes that its future business growth lies in the Internet and new media, hence the establishment in 1999 of Dubai Internet City. Dubai has built up its infrastructure, transforming itself in a few years from a small trading port to a large regional business hub and financial centre. The setting up of Dubai Internet City provides the infrastructure needed for e-commerce to flourish in the United Arab Emirates, further confirming the need for legislation regulating these matters.
This Overview discusses the current state of UAE laws affecting e-commerce. It highlights recent developments in the UAE legal system in terms of both the draft federal law concerning cybercrimes as well as those that have been recently passed at the local level. In Dubai, these laws comprise Law 5/2001 concerning the Use of Computers in Criminal Procedures and Law 2/2002 concerning Electronic Transactions and Commerce.
The UAE government has committed itself to facilitating e-commerce at both the local and federal levels. As part of the federal government’s efforts to regulate electronic transactions and boost users’ confidence, a draft Cybercrime Law is currently being reviewed by a special committee formed for this purpose by the Ministry of Justice and Islamic Affairs. The law will contain two categories dealing with internet-related crimes, namely (i) a set of laws on digital signatures and issues related to signing and forgery of electronic documents, and (ii) a set of laws addressing crimes such as hacking, stealing credit card numbers, invasion of privacy, copyright violations and online theft. The articles will be flexible enough to allow amendments to cover situations arising from new IT developments.
At local level, documents with electronic signatures are now admissible as evidence in criminal investigations pursuant to Law 5/2001 concerning the Use of Computers in Criminal Procedures. The provisions of the law recognize signatures acquired through the use of computers and other IT means for the purposes of proof in criminal cases. The Prosecution Office’s records of investigation are now available digitally and can be submitted to the court electronically.
Pursuant to Law 2/2002 concerning Electronic Transactions and Commerce, Dubai has become the first emirate in the Middle East to legislate on online commercial activities. The new law is a combination of model laws such as the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Electronic Commerce, other eastern laws such as the Electronic Transactions Act of 1998 of Singapore and local specifications.
Among other things, the new law addresses the submission of e-documents to government departments and institutions in the emirate of Dubai, public confidence in the security and accuracy of e-transactions, e-messages and e-registers, and the elimination of uncertainties regarding electronic writing and signature requirements.
The law does not apply to personal status transactions such as marriages, divorces and wills, negotiable instruments, ownership documents of immovable property, transactions related to the purchase and sale of immovable property or any document that requires attestation by the public notary.
The law makes it voluntary for an individual to use or accept information electronically. However, acceptance may be concluded from 'positive' conduct. Further, government departments and institutions are free to enter into e-commerce and other e-transactions at their discretion, although the relevant government department and institution must expressly agree to dealing electronically in transactions to which it is a party.
Electronic messages are recognized under the law, and an electronic document or file is regarded as equivalent to a written document required by any law, provided that the requirements of access and storage set out in chapter two thereof are satisfied. Further, the law recognizes electronic signatures and outlines the criteria according to which they are regarded as equivalent to handwritten signatures. In addition, electronic information is deemed to have evidential value, to be assessed in accordance with certain considerations set out in Article 12.
Regarding online contracts, the law provides that a contract is not invalid or unenforceable solely because it is formed by one or more electronic messages. The government use of electronic registers is also addressed by the law. According to Article 27, a government department or institution in the emirate of Dubai may:
- accept the filing, submission, creation or retention of documents in the form of electronic records;
- issue any permit, licence, decision or approval in the form of electronic records;
- accept fees or any other payment in electronic form; and
- submit tenders and receive bids relating to government purchases by electronic means.
The law contains enabling provisions allowing the government to enter into electronic transactions at its discretion.
A range of crimes are regulated under the law concerning, for example, publication of a certificate for fraudulent purposes, false or unauthorized request, breaches of obligation of confidentiality and offences by corporate bodies. The law also deals with the confiscation of tools of crimes and provides for the termination of the criminal case and conciliation.
An interesting caveat is found under Article 36 which authorizes the chairman of Dubai Technology, E-Commerce and Media Free Zone Authority to exempt any individual or corporate body from all or some of the provisions of the law or any of the regulations issued thereunder. The chairman may also set up special courts or arbitration tribunals to settle lawsuits and resolve disputes related to the application of this law.
Although the Electronic Transactions and Commerce Law lacks provisions dealing with other aspects of e-commerce and electronic transactions such as privacy, jurisdiction, data protection, domain names, decency and cybercrime, it certainly provides a sound foundation on which to build. By introducing a legal framework for electronic transactions, the Dubai government is assuring companies that their interests are protected, thus encouraging them to invest in Dubai and promoting e-commerce in the emirate.
In an attempt to fill existing legislative gaps, a second part of the law on the penalties of e-crimes is being prepared in Dubai Internet City and will be forwarded to the government shortly. It is expected to address frauds, value of transactions and the criminalization of hacking.
History proves that the most successful nation states have well-defined, developed and modern laws. With this in mind, the UAE government at both the federal and local levels has taken the initiative to ensure that investors are afforded legal protection, and that the legal system adequately addresses the new issues associated with the digital economy. Recent practice proves that growth and expansion run parallel to the developments of local and federal laws and regulations.
Finally, in order to encourage international companies to invest, and to attract the visionaries needed to sustain the momentum to keep the United Arab Emirates at the forefront of the digital economy, the development of existing UAE laws and the promulgation of new cyberlaws are also vital.
For further information on this topic please contact Samer Qudah at Al Tamimi & Company by telephone (+971 4331 7090) or by fax (+971 4331 3177) or by email ([email protected]). The Al Tamimi & Company website can be accessed at www.tamimi.com and www.internetcitylaw.com.