On September 20, 2021, the United Arab Emirates published 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 enacted as part of sweeping reforms to UAE laws.
A number of improvements are made by the ETL, mainly electronic signatures would now be considered the same as handwritten signatures. Previously, there were no distinctions, but under the ETL, there are three types of signatures: standard electronic signature, approved electronic signature, and qualified electronic signature. Each of these signatures will be associated with a corresponding level of security.
The law also provides for trust service providers who will be licensed by the Telecommunications and Digital Government Regulatory Authority (“TDRA”) and the TDRA will be the relevant regulator and implementing authority for the ETL.
The ETL further clarifies that all transactions may be entered into using electronic signatures, unless otherwise restricted, whereas previous law provided exclusions on the use of electronic signatures. Transactions can be concluded on any medium and can be partially or totally concluded by means of electronic signatures.
The ETL also includes provisions on the misuse of electronic signatures. Trust service providers and signatories may be held liable for the unauthorized use of electronic signatures or seals and for the disclosure of confidential information. The ETL will be followed by an implementing regulation for the TDRA which will detail the technical aspects of the law and the scope of its application.
The ETL will come into effect on January 2, 2022 and is expected to support the UAE’s transformation towards adopting new technologies and driving the growth of the digital economy. The grace period for implementing the new law is 12 months, during which time companies in the UAE can implement and adopt the ETL.
Originally published on December 28, 2021
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