UAE issues new law for e-commerce businesses

The law protects consumer interests and regulates refund and exchange of goods; here are the 10 highlights of the newly introduced law

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Ashwani Kumar

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Image used for illustrative purposes.
Image used for illustrative purposes.

Published: Thu 7 Dec 2023, 3:51 PM

Last updated: Thu 7 Dec 2023, 6:25 PM

A new e-commerce law has been introduced in the UAE with a proactive and forward-looking approach aimed at enhancing the competitiveness of the business environment in the Emirates, a top official said.

Introducing the law, Abdullah Ahmed Al Saleh, Undersecretary of the Ministry of Economy, said the UAE is steadily transitioning to a new economic model that has resilience, innovation and entrepreneurial thinking as its key pillars.

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"We are witnessing a new milestone in the country's efforts to achieve sustainable economic and social development through the promulgation of the new law for e-commerce."

The law aims to stimulate trade growth through advanced technologies and the development of smart infrastructure in the country.

"The new law is an integrated framework for the development of the legislative and regulatory environment for trade conducted via modern technical means in the country, in line with global best practices in this regard. It will help our efforts to achieve the national target of raising the UAE's position to the number one ranking globally in the development of proactive legislation governing new economic sectors, in the light of the 'We the UAE 2031' vision."

The Federal Decree-Law No. 14 of 2023 on Commerce through Modern Means of Technology (e-commerce) aligns with the UAE's strategic direction for digital transformation.

Al Saleh also underlined that the new law is the UAE's main federal legislation governing e-commerce.

Abdullah Ahmed Al Saleh
Abdullah Ahmed Al Saleh

"It has been designed to enhance the business environment in the country by facilitating the conduct of business and contracting, enhancing its efficiency, reducing the cost of doing business, and enhancing stability."

The law does not impose new requirements on digital traders or providers of other services. It protects consumer interests and regulates the refund and exchange of goods and services.

Al Saleh pointed out that the new law considers future developments and does not limit the provision of trade to specific technological means such as digital or even blockchain but covers any current or future modern technological means. This means that this law does not require modification whenever a new technology emerges in the future. It also contributes to achieving the requirement of technological neutrality, especially since this legislation primarily relies on technology and its ongoing advancements to conduct trade.

Al Saleh confirmed that the law would enhance the economic, legislative structure that boosts national and foreign investments and further diversification of business activities while ensuring the provision of the best services to consumers and increasing job opportunities.

10 highlights of e-commerce law

1. The law is compatible with international digital commerce trends and adopts a flexible approach to legislation to streamline businesses and facilitate services for consumers in the country.

2. It emphasises the key role of entities and authorities responsible for licencing and regulating e-commerce, as well as the associated logistic services and digital payment gateways.

3. The law protects consumer interests, both in terms of safeguarding intellectual property rights regarding the purchase of goods or services through modern technology means and the provision of sufficient technological protection measures to enable consumers to safely purchase goods and services, as well as regulating the refund and exchange of goods and services.

4. It legally authorises trade conducted through modern technology means, making it similar to traditional methods and conventional procedures.

5. The law provides optional jurisdictions for dispute resolution, including arbitration, and introduces the optional insurance coverage principle regarding obligations arising from trade through modern technological means.

6. It integrates roles of federal and local entities involved in the entire e-commerce value chain, enabled by flexible legislation for those entities, starting from the requirements of the Central Bank on digital payment gateways, followed by the requirements of the Federal Tax Authority and the TDRA, in addition to the security requirements of federal and local entities regarding cybersecurity.

7. It regulates the shared roles of the concerned federal and local entities with regard to the requirements and necessary approvals from the local entities concerned with the digital transformation of business activities and the e-commerce licensing requirements of economic development departments.

8. It creates an optional authority for the integration of supervisory, regulatory, and judicial control operations.

9. It organises the relationship between the merchants (B2B) and the relationship between the digital merchant and the consumer (B2C).

10. The law organises the relationship between parties of digital contracts and protects online consumers and relevant parties. It organises digital payment gateways in coordination with the relevant entities in the country.

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