The United Arab Emirates (the “UAE”) issued Federal Law No. 46 of 2021 which came into force on the 2^nd of January 2022 (the “Law”). The Law aims to keep up with technological advancements to enhance electronic transactions in all sectors and encourage digital transformation and investment. In March 2023, Cabinet Resolution No. (28) of 2023 on the executive regulations of the Law was issued (the “Executive Regulations”) and published on 14 April 2023 which are about to come into force towards mid-July (i.e., 15 July 2023), being 90 days of publish date, providing specific guidelines on licensing procedures for trust service providers. The introduction of these regulations marks a significant milestone in the UAE’s journey towards building a robust and secure digital infrastructure in addition to showcasing that the UAE has a digitalized environment that is based on trust, transparency, and reliability.

The enforcement of the Law and the Executive Regulations would serve as keeping the pace with the technological advancement and safeguard the parties to transactions by preserving electronic signatures, seals and time stamps. Notwithstanding the foregoing, the Law may be also perceived to serve the eco-system by acknowledging and securing the paperless transaction option in line with the vision of the UAE that aims to promote and develop the country to meet the requirements of the cities of the future. Contracting parties would no longer be required to execute the transaction documents in wet-ink as the validity and enforceability of the electronic documents have the same weight and treatment similar to wet-ink signatures. 

Services

Pursuant to the Law, service providers are classified into two (2) categories according to the types of services which are provided. The Telecommunications and Digital Government Regulatory Authority (the “TDRA”) provides licenses for the provision of trust services and accredited trust services, as detailed below.

1. Trust Service, includes inter alia, to the creation of the electronic signature and stamps and issuance of a certification of the same; and
2. Accredited Trust Services, includes inter alia, creating the accredited electronic signature.

TDRA’s Role

In addition to the TDRA’s regulatory authority over the trust service providers, TDRA is also entrusted with a supervisory role to ensure the compliance of the trust service providers with the Law.

Licensing

The Executive Regulations set out the specific requirements and documentation which must be fulfilled in order to initiate/renew the license application process. Notwithstanding the TRDA’s discretion to request additional documents and/or extend the review process timeline, the TDRA conducts an inspection of the license application, a process that is expected to take one (1) month.

The Executive Regulations further provides that the trust service providers may suspend the provision of the trust services, provided that the TDRA’s prior consent is procured.

The UAE Trust List:

In case the TDRA approves the license application to provide trust services or accredited trust services, a license will be issued to the applicant. This license grants the applicant the authority to offer the approved trust services or accredited trust services. Following the grant of such license, the TDRA shall update the UAE Trust List to reflect the details of the service provider and type of license granted to the applicant; whether it is for providing trust services or accredited trust services.

The UAE Trust List, compiled by the TDRA and made available on its official website, encompasses a range of information, including the following details:

1. Information concerning the trust service providers, their respective license statuses, and the trust services they offer.
2. Information concerning the accredited trust service providers, their respective license statuses, the status of the accreditation and the accredited trust services they offer.

Conclusion

In conclusion, the introduction of the Law in the UAE, along with its accompanying Executive Regulations, marks a significant step towards embracing technological advancements and enhancing electronic transactions across all sectors. The Executive Regulations provides detailed procedures and requirements for obtaining licenses, while the UAE Trust List serves as a valuable resource for information on trust service providers and their respective trust services. With these forward-thinking initiatives, the UAE is well-positioned to foster a thriving digital ecosystem and drive its digital future.

With the Executive Regulations being about to enter into force, our team of experienced lawyers can offer practical legal advice to businesses, or organizations on the Law and its Executive Regulations and/or assist clients in understanding the necessary steps they need to take to align their operations with the legal requirements within the grace period prescribed by the Law which is anticipated to lapse on 2 January 2024.

Authors:  Yousef Al Amly, Partner and Salma Farouq, Associate.

For further information, please contact Alex Saleh (alex.saleh@glaco.com) and Yousef Al Amly (y.alamly@glaco.com).