This article reviews Kuwait’s draft Decree-Law on Digital Commerce against the text of the proposed law and related materials, and refines the analysis for legal accuracy, completeness, and readability.

Legislative Status and Scope

The Ministry of Commerce and Industry (MOCI) has advanced a draft Decree-Law regulating the digital commerce sector in Kuwait. Following Cabinet approval, the Decree-Law will be submitted for ratification by His Highness the Emir. Under the draft’s final provisions, the executive regulation must be issued within one year of publication of the Decree-Law in the Official Gazette, and the Decree-Law will take effect one month after such executive regulation is published.

The law establishes a unified framework for “digital commerce,” defined as activities conducted wholly or partially by technological means for trading goods, providing services, advertising, or exchanging related data. It applies across digital stores, platforms, and intermediaries, and incorporates consumer rights, advertising standards, data security, electronic records and signatures, logistics, electronic payments, dispute resolution, and a structured penalties regime.

Institutional Architecture and MOCI Mandate

The draft Decree-Law designates MOCI as the primary regulator and supervisor of the digital commerce sector. Its mandate comprises:

• Policy and rulemaking. MOCI formulates public policy and issues necessary implementing decisions and regulations, including specialized instruments covering electronic auctions, intermediary platforms, and a monetary penalties regulation for non‑criminal violations.
• Registration infrastructure. MOCI establishes electronic registers for digital commerce providers and any other registers it deems necessary to organize the sector. Registration in the designated MOCI registers is a precondition to operate in the sector.
• Supervisory powers. MOCI supervises compliance, may require providers to furnish data, information, or documents, and coordinates with relevant authorities (including for intellectual property complaints).
• Enforcement tools. MOCI may notify violators and, where non‑compliance persists, block the offending digital store according to procedures set in the executive regulation. MOCI also oversees a Dispute Resolution Committee and a Violations Committee to adjudicate disputes and violations and to refer criminal matters to the Public Prosecution.

Registration and Provider Disclosure Obligations

The law requires all providers operating in the digital commerce sector to be entered in MOCI’s electronic registers before commencing activity. Providers must disclose, prominently and clearly in their digital stores:

• Identity and trade name (as applicable), registration details and number, and available contact methods including email, phone numbers, and electronic communication links.
• Clear terms and conditions of contracting, including the steps to form an electronic contract, the provider’s identity, final pricing and all fees, delivery terms and dates, payment methods, return and exchange policies, and any other information the executive regulation may require.
• Upon contracting, providers must issue an Arabic electronic invoice (with any additional language as a supplement) reflecting, at a minimum, the price, total amount inclusive of all charges, delivery details, payment method, and other mandatory data.

Providers must maintain an electronic record preserving sent/received documents in their original electronic form for at least five years and present them to MOCI upon request. Providers must also comply with the decisions of the National Cybersecurity Center concerning data security measures prescribed in the executive regulation.

Consumer Rights and Remedies

The draft Decree-Law strengthens consumer rights in digital transactions:

• Error correction. If a consumer commits an error when using a provider’s electronic contracting system and the system does not offer a means to correct errors, the consumer may cancel or modify the erroneous part, provided the provider is notified promptly and the consumer has not benefited from the product or service.
• Returns and cooling‑off. Without prejudice to statutory or contractual warranties, consumers may rescind an electronic contract within 14 days of product receipt to return or exchange and recover the price via the original payment method or an agreed alternative, without additional fees, provided the product is in its original condition. The law carves out specific exceptions, including for perishable goods, customized products, and certain high‑value products (e.g., precious metals and specified goods) which are subject to a shortened 24‑hour return period. The executive regulation will further delineate exceptions and digital services cases.
• Delivery delays. If delivery is delayed beyond the agreed date or 14 days elapse from the agreed delivery date, the consumer may terminate the contract and recover any sums paid.

These rights are supplemented by a general principle that providers must not deviate from advertised terms except in a manner that benefits the consumer.

Advertising, Promotion, and Influencer Activity

The law imposes prescriptive standards for digital advertising and promotion:

• Mandatory content. Digital advertisements must include the provider’s name and price, a clear and accurate description of the product or service, and provider contact details. For advertisements placed via social media accounts registered with MOCI, the ad may be linked to the provider’s official account containing the required information.
• Prohibited content. Advertisements may not contain false or misleading statements, violate public order or morals, or include counterfeit or unauthorized marks, images, or trademarks, or language that directly or indirectly misleads consumers.
• Cure periods and blocking. MOCI must notify advertisers of violations of advertising rules and grant 24 hours to rectify. If unremedied within that period, MOCI may block the offending store in coordination with competent authorities in accordance with executive procedures.
• Binding effect. Providers are bound by their advertising terms and may only deviate if it benefits the consumer.
• The law defines “influencers” as social media personalities who influence consumer decisions through content or promotion. Influencer marketing must comply with advertising rules, and influencers are prohibited from misleading, false, or unauthorized promotional content. Compensation to influencers should be routed through secure, traceable channels consistent with anti‑money laundering standards and Central Bank of Kuwait (CBK) payment-system requirements, and in compliance with the law’s advertising and registration framework where applicable.

Electronic Payments, Technologies, and Logistics

The law modernizes operational rails for digital commerce:

• Electronic payments. Providers must offer simple, transparent, non‑discriminatory electronic payment options consistent with CBK instructions. Providers may only use payment service providers licensed by CBK. Imposing additional fees on electronic payment use requires prior CBK approval and clear disclosure in the electronic contract. The executive regulation will prescribe further payment-use rules.
• Records and signatures. The law recognizes electronic records and requires retention of electronic documents for not less than five years. It regulates electronic signatures in the sector and sets grounds for cancellation (e.g., death or loss of capacity for natural persons, dissolution for legal persons).
• Emerging technologies. Providers may use modern technologies such as blockchain and smart contracts with consumers, subject to conditions set in the executive regulation.
• Innovation pathway. Persons proposing innovations, products, or services not yet covered by the legislative framework may apply to MOCI with a description and merits of the proposed solution, under rules to be set in the executive regulation. Functionally, this creates a structured “sandbox‑like” avenue for controlled innovation in digital commerce.
• Logistics and delivery. Providers may offer logistics services directly or via licensed third parties in or outside Kuwait, or via compliant technological means. Providers must clearly disclose logistics costs, delivery options, and timelines in the electronic contract, and may not impose additional logistics fees unless pre‑specified in the contract terms.

Committees and Enforcement Processes

The draft Decree-Law establishes two specialized bodies within MOCI:

• Dispute Resolution Committee. Chaired by a judge (no lower than Counselor) seconded by the High Council of Judiciary, with two members from relevant MOCI departments. The Committee ensures transparent, expedited resolution of non‑criminal e‑commerce disputes, including whether goods/services are defective, conform to descriptions, and meet their intended purpose. It hears grievances against store blocking decisions, may impose monetary penalties for non‑criminal violations in accordance with the monetary penalties regulation, order rectification within a specified period, or refer matters to the Public Prosecution where crimes are suspected. Procedural rules, decision‑making, notifications, and remuneration are to be set in the executive regulation.
• Violations Committee. Chaired by an adviser from the Fatwa and Legislation Department, with two MOCI members. It examines violations referred by MOCI investigators and may dismiss cases, refer non‑criminal matters to the Dispute Resolution Committee, or refer criminal violations to the Public Prosecution. It may also order temporary blocking of a provider’s store for up to 30 days in accordance with the law.

Penalties and Ancillary Sanctions

The penalties chapter adopts a deterrent approach. Without prejudice to harsher penalties under other laws, imprisonment of up to one year and fines from KD 1,000 to KD 10,000 may be imposed, including for:

• Operating in the digital commerce sector without registration where required by law.
• Submitting false data or forged/simulated documents for registration in MOCI’s registers.
• Offering illegal products or services, or products/services contrary to public order, morals, or public health via technological means.
• Failing to comply with final decisions of the Dispute Resolution Committee in contravention of the executive regulation.

Penalties are doubled for repeat offenders. Courts may order confiscation of tools used to commit offenses or proceeds derived therefrom. Procedurally, designated MOCI staff will have inspection and judicial-seizure authority in accordance with the law and the executive regulation.

Intersections with Related Legal Regimes

• Intellectual property. The draft confirms that materials used in marketing or delivery (e.g., images, videos, text, logos, software) are subject to Kuwait’s copyright framework. MOCI, coordinating with competent bodies, will handle IP complaints in the digital commerce context.
• Cybersecurity and data protection. Providers must implement cybersecurity measures promulgated by the National Cybersecurity Center. The executive regulation will specify technical and organizational measures for securing data at rest and in transit.
• Financial services perimeter and AML/CFT. Electronic payments and settlement activity must comply with CBK rules. Compensation flows to influencers and marketing agencies should be processed through licensed channels and remain traceable, in alignment with anti‑money laundering standards and CBK requirements.
• Civil and commercial law. In matters not expressly covered by the Decree-Law, general civil and commercial statutes apply, provided they do not conflict with the digital nature of transactions.

Practical Implications and Preparatory Steps

The Decree-Law transitions Kuwait from a largely permissive environment to a prescriptive, enforcement‑focused regime. Providers, platforms, marketplaces, and influencers should prepare to:

• Map activities against MOCI’s registration requirements and complete registration prior to operation.
• Update store disclosures, terms and conditions, privacy and cybersecurity policies, and advertising practices to align with the law and forthcoming executive regulation.
• Implement compliant electronic invoicing in Arabic, electronic recordkeeping for at least five years, and processes for 14‑day returns and delivery delay remedies, including exception management.
• Align electronic payment acceptance, pricing, and fee practices with CBK rules; engage only CBK‑licensed payment providers; and verify that any additional fees have prior CBK approval and are clearly disclosed.
• Establish internal controls for advertising content review, influencer vetting, contract templates, and 24‑hour remediation workflows following MOCI notices.
• Build a dispute handling and remediation program calibrated to the Dispute Resolution Committee’s jurisdiction and procedures.
• For novel technologies or business models, prepare documentation to utilize MOCI’s innovation pathway governed by the executive regulation.

Conclusion

The draft Decree-Law is a pivotal step in Kuwait’s digital transformation. It clarifies definitions, codifies consumer rights and advertising standards, formalizes registration and supervisory infrastructure, embeds data security and payments compliance, and creates clear dispute-resolution and enforcement pathways. Its structured approach—to registration, disclosures, consumer remedies, advertising integrity, secure payments, and penalties—will elevate market trust and transparency and position Kuwait as a more attractive, well‑regulated hub for digital commerce.

While the law will become effective one month after publication of the executive regulation, businesses should begin alignment now across registration, contracting, payments, cybersecurity, advertising, logistics, and dispute handling to ensure a smooth transition to compliance.

Authors: Ashraf Hendi, Partner and Head of Banking & Finance and Maryam Tarek, Associate.