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Electronic Insurance Regulations Issued in The UAE

The UAE Insurance Authority recently published the Insurance Authority Board of Directors’ Resolution No. 18 of 2020 on Electronic Insurance Regulations dated 27 April 2020. The first draft of these regulations was published in January 2019, and after public consultation and discussion, a revised draft was published in December 2019, which has now been finalised.

The Regulations and the timing of it are very relevant in the current circumstances, i.e. the impact of COVID-19 and the social distancing measures by the government, marketing, and solicitation of insurance by physical means is at an all-time low.

The term electronic has been widely defined as anything relating to technology having electrical, digital, magnetic, wireless, visual, electromagnetic, automated, optical or similar capabilities. The scope of the Regulations extend to all electronic and smart insurance operations carried out on the internet address of the company, social media such as Facebook, Linkedin, multimedia such as YouTube, Instagram, blogs, applications such as google doc, Wiki, AI-based systems, text messages, instant chat channels, smart applications, etc.

All insurance companies and related businesses such as insurance agents, actuary, broker, surveyor, insurance consultant, carrying out operations through electronic mode, require prior approval from the Insurance Authority. The application for such approval must be accompanied by an action plan for electronic operations, approved by the Board, and contain analysis of the risk, projected volume and contingency plan for the electronic operations.

Life insurance policies with investment components cannot be transacted online, while the sale of life insurance policies with standard underwriting, such as term life is allowed. Health and general lines of business on property and liability risk, including marine cargo insurance can all be sold online and are subject to the Regulations.

The website of the insurance companies must be maintained by the IT department of the company, but if the management of such a website is being outsourced to a third-party, then prior approval of the Insurance authority must be obtained in this regard. Insurers currently use multiple online platforms for online marketing and selling, often procured through third-party entities. The intent of the Regulations is to capture and regulate, where possible all such third-party entities who are engaged in insurance distribution.

The Regulations also put much impetus on provisions of information security and also requires that storage of data must be in the United Arab Emirates. It is however not clear whether the Regulations require any Cloud server to be based within the United Arab Emirates.

In addition, the Regulations recognise that the electronic platforms and systems of the companies may not be developed enough to carry out these operations and hence allow outsourcing of electronic operations for this purpose. The Regulations also allow usage of third-party websites for sale of insurance but require the prior consent of the Insurance Authority to be obtained for any such arrangements.

The Regulations also recognise, for the first time, the “Price Comparison Websites” and interestingly state that only an insurance broker can deal with a price comparison website. The Regulations also require Price Comparison Websites to be registered with the Insurance Authority and a copy of the agreement signed between Insurance Broker and Price Comparison Websites must be shared with the Insurance Authority.

The prerequisites for registration of Price Comparison websites has also been listed in the Regulations but state that the application for registration must be made in accordance with the applicable regulations, implying that the Insurance Authority may be issuing further regulation on Price Comparison Websites shortly.

The Regulations state that the provisions shall apply from the date of publication of Regulations in the official gazette, but also allow insurance companies and insurance-related professions a time period of 6 months from the date of publication in the official gazette to align their position and operations with the Regulations.

While the recognition of Price Comparison Websites is a step in the right direction from the United Arab Emirates Insurance Authority given the global trends in this regard, the requirement for a Price Comparison Website to deal only through a broker creates an extra layer of regulatory requirement and therefore unnecessary costs, the benefit of which could have been passed on to end customers in the absence of such requirement.

Nonetheless, insurance markets globally have noticed a surge in demand for insurance policies through online mode and therefore this Regulation brings much-needed clarity, which will help in further growth of the United Arab Emirates insurance market.

The Impact of Defamation on Social Media

Defamation is the oral or written communication of a false statement about another that unjustly harms their reputation and usually constitutes a tort or crime. In several countries, a true statement can also be considered defamation.

In an era where often more questions arise than answers, the public is eager to read, share and explore everyone’s views on a particular topic.

Whether you are journalists or reporters providing professional coverage, business owners responsible for your employees’ conduct, family members responsible for your children or dependants’ actions, we all need some guidance and practical answers, in order to be aware of the legal implications of how we use our social media.

Whilst naturally we are all expressing and discussing our thoughts on the impact of COVID-19, it is important to be aware of the potential legal implications that the dissemination of information and expressions of opinion or fact could have in the United Arab Emirates.

Within the contents of this short article, we will outline the key points which individuals should be aware of before submitting and/or disseminating information, pictures, posts or any audio, audio-visual or written material regarding COVID-19 into the public domain. The points covered by this article are applicable to individuals, , patients, advice, corporations or any other form of information. The two major risks can be broadly summarised as an i) Invasion of Privacy and ii) Defamation.

Privacy. The right to a private and dignified family life is considered inherent in the United Arab Emirates and is appropriately safeguarded by numerous applicable laws and regulations. The disclosure of information or secrets relating to someone’s private or family’s life will attract liability under the Penal Code, the Cyber Crimes Law as well as laws related to media and publications in United Arab Emirates, if no prior consent is obtained from the individual.

This can include an image, photo, short videos or any materials that expose individual to the public without their consent, even for the purpose of public awareness.

To put this into the context of COVID-19, to expose an individual as exhibiting symptoms or as having the virus is likely to be interpreted as an invasion of an individual’s right to a private life. Furthermore, to take a picture of another person in a public place and ‘disseminate it’ by publishing it online could also be interpreted as an invasion of privacy.

The United Arab Emirates Criminal Court of Cassation issued a binding court judgement in relation to privacy laws in 2016, where it affirmed the imposition of serious sanctions against all entities involved in publishing content that violates the privacy of individuals. The individuals, in this case, were walking in public areas yet, they were filmed without their consent and this subsequently raised a claim for the invasion of privacy. The sanctions imposed by the Court of Cassation as a result of this invasion of a right to a private life included fines and deportation from United Arab Emirates territory.

The fundamental point is that patients, children, names, images, medical situations or related data, can all be classified as private information, which is exclusive owned by the individual concerned The disclosure of this information, in any form, should be carefully reviewed and assessed, in order to mitigate any potential risk.

It is important that Employers or Individuals with dependants, raise awareness on the implications of reporting on social media platforms in respect of the applicable laws to ensure no violation, even if unintentional, occurs. Ignorance of the law or lack of intention to violate another’s right to privacy is not an excuse. It should be noted that simply re-sharing what someone else has shared or published will not exempt an individual or entity from liability.

We have observed a high level of professionalism and adherence with the applicable laws and the third parties rights of media service providers, including TV channels, radio stations, online newspapers and other mediums. This is apparent from all the reports and audio-visual content that we are receiving in relation to COVID-19. We have also witnessed reliable content on the topic that provides sufficient information to public and corroborates with official sources.

Defamation. Defamatory or libellous posts on social media could result in defamation claims under the applicable laws in the United Arab Emirates. Whilst the creation and dissemination of parodic posts and content is a common occurrence in the United Kingdom and Europe, it is important to be aware that parody is not an available defence under United Arab Emirates Law. Instead, it is more likely that a parody may be seen as an attempt to humiliate an individual or an entity and to harm their reputation, no matter how ridiculous the parody is.

More recently, an exception to this rule was passed in the United Arab Emirates in DIFC Intellectual Property Law number 4 of 2019, in which it is considered that a registered Trademark, or a well-known Trademark, is not infringed in the DIFC if it is used in news reporting, news commentary or parody. However, this exception is specifically limited to DIFC and in relation to trademarks. This shows a willingness for parodic content to be recognised in the future, but for now, the public should be aware that parodic content, could be pursued by the concerned individuals and/or entities in UAE under the applicable defamation laws.

To put this into context, any posts relating to patients, medical staff members, law enforcement agencies or the public reacting to incidents of public interest can be subject to legal liability. Defamation criminal liability is pursuable within a strict time bar from publishing defamatory content. However, civil liability and invasion of privacy criminal claims can be longer than defamation offenses.

It is worth reminding everyone that in accordance with articles 372 and 373 of United Arab Emirates Federal Law No. 3 of 1987 in the United Arab Emirates, a defamatory statement is one that exposes a person to public hatred or contempt, even if the statement is true and correct. This means that a person is potentially exposed to a claim for defamation by publishing or disseminating any negative news about an individual or an entity. If the defamatory statement is made against a public officer or governmental entity, the imposed sanction could be significantly worse.

We should all be aware that the protection of privacy, for the data of patients, defamation, cyber-crimes and all other related legal provisions in the United Arab Emirates are going to be likely reviewed and subject to enforcement proceedings should any violations be revealed. The priority now is for public safety but authorities and concerned individuals will be monitoring and documenting posted content that may be revisited in the future to explore any legal liabilities.

On a final note, social media platforms are extremely beneficial to the general public as they enable the transmission of awareness, encourage the freedom of speech and facilitate communication on an international basis, at a time where countries are shutting their borders and encouraging people to isolate. For example, the level of awareness that people gained on COVID-19 in such a short period is unprecedented. However, users should be aware that social media platforms are not private and the misuse of such platforms by sharing any content, statement or image that they come across, is subject to appropriate sanctions.

Freedom of speech is granted and protected so long as it is in compliance with local regulations and public orders.

Federal Tax Authority Extends The Excise Tax

On the 1st of October 2017, the Federal Tax Authority (FTA) implemented an Excise Tax on certain products, including 100% on both tobacco-related products and energy drinks and 50% tax on carbonated drinks.

BSA traces its roots to 2001 when it was first founded in Dubai, with the primary mission of offering legal services that combine comprehensive knowledge of local law with a modernised and progressive approach to legal practice.

Due to the success of these taxes in reducing the consumption of these products, the FTA, as per Cabinet Decision No (52) of 2019, has chosen to extend this Excise Tax, as follows:

  • 100% on any liquids used in electronic smoking devices and tools, regardless of it containing nicotine, in accordance with the Customs Codes as determined by a decision issued by the Finance Minister;
  • 100% on any electronic smoking devices and tools, regardless of it containing tobacco or nicotine, in accordance with the Customs Codes as determined by a decision issued by the Finance Minister; and

50% on any sweetened drinks, including any products to which sugar or other sweeteners are added and produces:

  • ready-to-drink beverages;
  • concentrates, powders, gels, extracts or any form that can be converted into a sweetened drink;
  • any type of sugar determined under Standard 148 of the GCC Standardisation Organisation under the heading “Sugar”; and
  • any type of sweeteners determined under Standard 995 of the GCC Standardisation Organisation under the heading “Sweeteners Permitted in Food”.

Products which will be exempt from the definition of sweetened drinks and therefore not subject to the new Excise Taxes include:

  • ready-to-drink beverages containing at least 75% milk;
  • ready-to-drink beverages containing at least 75% milk substitutes;
  • baby formula, follow up formula or baby food;
  • beverages consumed for special dietary needs, as determined under Standard 654 of the GCC Standardisation Organisation under the heading “General Requirements for Pre-packaged Foods for Special Dietary Use”; and
  • beverages consumed for medical uses as determined under Standard 1366 of the GCC Standardisation Organisation under the heading “General Requirements for Handling of Foods for Special Medical Purposes”.

The expansion of the Excise Tax on the additional products shall take effect on the 1st of December 2019.

Our lawyers come from diverse backgrounds with the majority dual-qualified in both regional and multinational jurisdictions and who speak Arabic, English and French fluently.

Our team stays abreast of regional and international legal developments and tailors the firm’s advisory approach to our clients’ respective industry sector needs.

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New Dubai RERA Law Issued

His Highness Sheikh Mohammed bin Rashid Al Maktoum, in his capacity as the Ruler of Dubai, earlier this week issued the Dubai law No. of 2019 pertaining to the Real Estate Regulatory Agency initially established by law No. of 2007 as predominantly the regulatory arm of the Dubai Land Department.

The New Law provides for a reorganisation of RERA’s legal capabilities and capacities and defines a set of important objectives for RERA, including the contribution to the advancement of the real estate sector through an integrated system of regulatory and control measures which shall enhance its role in the overall economic development of Dubai, provide an assuring and supportive environment for the real estate development projects to safeguard the rights of both real estate developers and investors, keep pace with the steady growth of the real estate sector and all related activities, enhance the role of United Arab Emirates nationals in this sector and implement programs that will enable them to participate in real estate activities, as well as to develop the codes of principles and ethics required for practicing real estate activities.

The New Law confirms that RERA will continue to exercise certain powers established under the previous law, including the organisation and supervision of real estate development escrow accounts, approving qualified banking and financial institutions to manage these accounts, and the adoption of rules governing practitioners of the real estate development activity, the sale and rental of real estate, real estate brokers, real estate assessment and joint ownership of real estate property.

The New Law came with a number of key modifications and additions to RERA’s functions and specialties broadening thereby its scope of authority over real estate activities in the Emirate. The newly introduced powers include that RERA shall now be responsible for organising and licensing real estate activities and supervising the practitioners of these activities in order to ensure their compliance with the laws and regulation governing the real estate sector.

RERA will also be responsible for the supervision and inspection of the management, operation and maintenance of joint real estate properties, proposing the necessary legislations to regulate the work of real estate practitioners, and issuing the necessary regulations for the training and qualification of employees in the organisations licensed to practice real estate activities through the Dubai Real Estate Institute, in addition to the registration and issuance of identification cards to practitioners of real estate industry.

Rima Mrad Featured in List of Influential Women

Attorney Rima Mrad was recognised as one of The 50 Most Influential Women in the Middle Eastern Financial sector by a leading international finance publication.

Founded in 2001, this is a law firm that reflects the energy and ambition of the Middle East. The law firm is deeply rooted in the region, offering a competitive advantage to clients seeking advice that works in the real world and is truly in tune with the market.

Throughout its history, the law firm has demonstrated an innovative and entrepreneurial spirit. Its clients include a number of public and private sector companies, as well as local and international businesses from various industries.

The law firm regularly represents and collaborates with international law firms to deliver high-end legal services. Its relationships and contacts at key bodies, including regulators, mean it is able to do more than just advise; the law firm is able to go beyond the traditional law firm role to resolve commercial issues and make things happen for its clients.

The fact it has rights of audience in every country where it has an office means that the law firm can litigate all the way from the boardroom to the courtroom. The law firm has a truly multicultural team with an unrivalled depth of Arabic talent, including a high proportion of local advocates in each country where the law firm has offices.

Innovative legal minds, innate cultural understanding and local rights of audience before all courts: the law firm has the ambition, energy and talent to help your business succeed.

Its lawyers come from diverse backgrounds, with the majority dual-qualified in both regional and international jurisdictions and fluent in multiple languages including Arabic, English and French. The team is fully cognisant of regional and international legal developments and tailors its approach to specific industry sector needs.

Rima was singled out due to her expansive client list and her experience across real estate initial public offerings, insurance and investment banking mergers and acquisitions, as well as refinancing and private equity fundraising in the oil and energy sector.

BSA Named Regional Law Firm of the Year

BSA Ahmad Bin Hezeem & Associates LLP announced as Regional Law Firm of the Year at the Middle East Legal Awards 2019.

The Middle East Legal Awards hosted by the Association of Corporate Counsel (ACC) and Legal Week recognised BSA as the Regional Law Firm of the Year. During the ceremony, the judges highlighted BSA’s impressive regional expansion, exceptional approach to client care and innovative strategies including a trade mission to UK & Ireland to boost investment in Saudi Arabia.

BSA was also highly commended in CSR Initiative of the Year category for its annual Legal Clinic event where we provide free of charge legal advice to members of the public on a wide range of legal matters.

About BSA

BSA is a law firm originally founded in Dubai with the primary mission of delivering top-tier legal services based on our comprehensive knowledge of local, national, and international law.

Since our inception in 2001, we have rapidly expanded to a leading full-service law firm, with offices throughout the Middle East and France. Our lawyers are internationally educated, bi-lingual in languages such as English, Arabic, and French, and dual-qualified in both regional and international jurisdictions, having rights of audience in every country within which we operate.

BSA is a law firm that truly reflects the energy and ambition of the Middle East.

If you would like to find out more information about BSA, please visit https://bsabh.com/