UAE Electronic Transactions Law – electronic signatures now accepted in the UAE
The UAE has made significant reforms to the country’s legal system in recent weeks in order to meet globally recognised business standards. As a result, many laws have been revised, including the Federal Law No. 1 of 2006 on Electronic Commerce and Transactions.
As of 2 January 2022, this law has been replaced by the Federal Decree Law No. 46 of 2021 on Electronic Transactions and Trust Services. Under this law, the Telecommunications and Digital Government Regulatory Authority (TDRA) will act as the regulator for implementing the new legislation.
It is important to note that there is a grace period of one year given for compliance.
The Federal Decree Law No. 46 of 2021 clarifies that all transactions can now be entered into using electronic signatures, whereas the previous law prohibited it’s use for specific transactions, such as property transactions.
H.E. Talal Humaid Belhoul, Chairman of TDRA’s Board of Directors states that, “This law is complementary to the efforts of transforming the UAE into a digital nation characterized by a strong partnership among various sectors.”
What are the Key Changes in the new UAE Electronic Transactions and Trust Services Law?
As aforementioned, in the previous law, there was prohibited use of electronic signatures for specific transactions. However, this has since been amended, with electronic signatures now being assigned the same weight as handwritten signatures. This means that an electronic document will not lose its legal validity or enforceability due to its electronic form.
This new law also provides individuals with the option to use any form of electronic signature or stamp for any transactions they desire, including contracts with the UAE government entities. This will involve the coordination with the Federal Authority for Identity and Citizenship (FAIC).
Furthermore, transactions can be concluded in whole or in part by electronic signature. These contracts will be valid, enforceable and legally effective even in the absence of personal or direct interaction by any physical person in the contracting process.
Previously, the old law did not have any distinction for the different types of electronic signatures. However, this has since been revised in the new Electronic Transactions and Trust Services Law, with there now being three types of electronic signatures: Electronic signature, qualified electronic signature, and approved electronic signature
- Electronic Signature
This is a signature that consists of letters, figures, codes, sound, fingerprints, or a processing system of an electronic form attached or logically linked to an electronic document, which verifies the identity of the signatory and the acceptance of the content of the data associated with the document.
- Qualified Electronic Signature
This is an electronic signature that satisfies the following conditions:
- The electronic signature is completely and exclusively associated with the signatory and under their control.
- It includes characteristics to identify the signatory.
- It is linked to the data in a manner that allows the identification of any modification to the data.
- Approved Electronic Signature
This is an electronic signature that fulfils the following conditions:
- The electronic signature and stamp are created based on an approved and valid authentication certificate in accordance with the new law.
- The electronic signature and stamp are created using an approved electronic signature or stamp tool.
- The data to prove the authenticity of the approved signature and the approved electronic stamp shall be identical to the data submitted to the approved party.
- The data identifying the signatory of the approved authentication certificate shall be properly submitted to the approved party.
License Required from the TDRA
In the new Federal Decree Law No. 46 of 2021 on Electronic Transactions and Trust Services, it is stated that all trust service providers must obtain a license from the TDRA to provide electronic signatures services, such as the creation of an electronic signature. However, it is important to note that the details of these licensing requirements have not yet been published.
Once obtained, the licensed trust service providers will be given a Trust Mark by the TDRA as evidence of government certified trust services complying with all the legal requirements.
The TDRA will create a list of trust service providers, including those who provide approved electronic signature services, and the services that each provider offers.
As a result of this amended law, customers will be able to identify licensed service providers by checking whether they hold an approved trust mark issued by the TDRA, which also details the services that they are licensed to provide.
Facilitation of Licensing Processes
UAE’s new Electronic Transactions and Trust Services law enhances the facilitation of licensing processes based on new services that support digital transactions. This includes many civil and commercial transactions, such as marriage, personal status and notary public, real estate transactions such as renting, buying, selling, and contract modification.
The revised law will also increase the effectiveness of judicial procedures and the settlement of civil and commercial disputes.
Furthermore, the digital signature will facilitate the issuance of permissions, licenses, or approvals in the form of electronic records, and acceptance of fees or any other payments in electronic form. It will enable placing bids and receiving tenders related to government procurement electronically.
Implementing Executive Regulations
The Electronic Transactions Law will be supplemented with implementing executive regulations which will detail the technical requirements for the different signatures introduced under this new law as well as other details on the application of it.
How can PRO Partner Group help?
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If you need guidance in complying with the new Electronic Transactions and Trust Services Law and any other related company setup, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman, Qatar or Saudi Arabia then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at firstname.lastname@example.org or complete the contact form below and we will be delighted to assist you.