The Ministry of Economy has introduced Federal Decree-Law No. 14 of 2023 on Commerce through Modern Means of Technology (e-commerce). This legislation serves as the primary federal framework regulating e-commerce in the UAE. Its core objectives are to improve the business environment by facilitating transactions and operations, increasing efficiency, reducing business costs, and fostering stability.
“The new law is an integrated framework for developing the legislative and regulatory environment for trade conducted via modern technical means in the country, in line with global best practices in this regard, said HE Abdullah Ahmed Al Saleh, Undersecretary of the Ministry of Economy. “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 law aims to establish a robust investment environment that encourages domestic and foreign investment, instilling investor confidence. It aligns with the country’s trade objectives, enhances its global trade stance, and ensures compliance with international trade standards while integrating modern business practices and maintaining transparency.
During a media briefing, H.E. Al Saleh outlined key provisions and outcomes of the law that align with the UAE’s vision for the sector:
- The law is aligned with global digital commerce trends, offering a flexible legislative approach to streamline businesses and provide consumer-friendly services within the country.
- It emphasizes the pivotal role of entities and authorities responsible for licensing and regulating e-commerce, logistic services, and digital payment gateways.
- The law refrains from imposing new requirements on digital traders or service providers.
- It safeguards consumer interests by protecting intellectual property rights regarding purchases made through modern technology. It ensures adequate technological measures for safe transactions and regulates refunds and exchanges of goods and services.
- It legally authorizes trade conducted through modern technology, akin to traditional methods and procedures.
- It introduces optional dispute resolution mechanisms such as arbitration and optional insurance coverage principles for obligations arising from modern technology-based trade.
- It integrates federal and local entity roles throughout the e-commerce value chain, with flexible legislation for these entities, from Central Bank requirements on digital payment gateways to the security mandates of federal and local entities concerning cybersecurity.
- It regulates shared responsibilities between concerned federal and local entities for approvals related to digital business transformation and e-commerce licensing requirements from economic development departments.
- It establishes an optional authority to oversee regulatory and judicial control operations.
- It organizes relationships between merchants (B2B), digital merchants, and consumers (B2C).
- The law applies to free zones and financial free zones for activities unrelated to financial pursuits.
- It governs contracts in the digital sphere, protecting online consumers and relevant parties.
- It leverages technological advancements and communication revolutions to boost trade growth via modern technology, especially during crises, utilizing the UAE’s infrastructure, logistics, and transportation sectors.
- It coordinates with relevant entities to regulate digital payment gateways in the country.
- Adopts the approach of imposition of fines since the Ministry of Economy, in coordination with the competent authority, has been mandated with preparing a list of violations and administrative penalties for actions committed in violation of the provisions of this law and issued by a Cabinet resolution.
The Ministry of Economy’s responsibilities under the new law involve:
- Formulating a general e-commerce policy.
- Supervising its implementation.
- Issuing specific terms and conditions for consumer protection.
- Coordinating to block applications, websites, or platforms that violate public order or morals.
The law sets criteria for engaging in trade through modern technology means in the UAE, including legal capacity, compliance with all legal and technical requirements, obtaining necessary approvals, permits, and licenses, ensuring secure technology infrastructure, and adhering to cybersecurity standards.
Regulations in place
Merchants conducting business via modern technology means must adhere to regulations regarding goods and services sold, refrain from deceptive practices or providing false information, issue detailed digital invoices to customers, and comply with future technological advancements without requiring law modifications. This technological neutrality supports ongoing advancements in conducting trade.
The new law also 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 will enhance the economic and legislative structure that boosts national and foreign investments and further diversification of business activities while ensuring the best services to consumers and increasing job opportunities.