|
Privacy
In
this new age of cyberspace, a person's private information
and details have become open to the public. This causes concern
and worry to many. By completing routine applications or orders,
a person's details (medical, financial, salary details, etc.)
can be captured by marketers and this then becomes open to
abuse. In today's e-commerce market, potential consumers are
reluctant to provide e-businesses with mailing addresses and
credit card numbers for fear of the information being made
available to third parties. The result is that a large number
of consumers have thus far avoided purchasing items online,
thwarting the potential growth of e-commerce. In order to
maintain e-commerce growth, businesses and governments must
strengthen privacy regulations and ensure that consumers feel
as comfortable making a purchase over the Internet as they
do over the phone.
In
the United Arab Emirates ("UAE"), although the Constitution
and the Penal Code guarantee the right to privacy, the Civil
Code in its current form does not allow private individuals
to directly seek compensation for violations of their privacy
rights. Once the legal infrastructure is in place, however,
and e-businesses begin to take self-regulatory measures that
ensure consumer privacy, then e-commerce in the UAE will be
able to achieve sustained growth as it faces the challenges
of the new economy.
UAE
Federal laws and the recent two Dubai Laws have been unequivocal
in its support of privacy rights. The UAE Constitution in
Article (31) states that an individual enjoys: "Freedom
of communication by post, telegraph or other means of communication
and the secrecy thereof shall be guaranteed in accordance
with the law."
Complying
with the Constitutional right to privacy highlighted above,
the UAE Penal Code protects individuals from the interception
and subsequent disclosure or publication of their personal
data. Although the Penal Code does not specifically take into
account the influence of the Internet on privacy rights, the
wording of its provisions is broad enough to include privacy
violations that occur online.
Under
the existing laws, there is no controlling body a website
provider must register with in order to process personal data.
It is also unclear under the current state of the Law whether
or not selling data is permissible. However, Article 378 of
the Penal code prohibits the publication of personal data
relating to individuals. Furthermore, Article 379 forbids
the disclosure of entrusted secrets.
Whereas
the Penal Code deals adequately with the matter of online
privacy rights, the Civil Code contains no provisions pertaining
to the protection of privacy, online or otherwise. As a result,
individuals in the UAE currently do not have the right to
sue and demand compensation for alleged transgressions of
personal privacy.
Under
existing laws, there is no regulation in place on website
providers who intend to profile their customer base in order
to target advertising on their websites. However, under the
Dubai Electronic Transactions and Commerce Law No. 2 of 2002,
shall be punished by imprisonment and /or a fine not exceeding
Dhs.100,000.00 whoever intentionally disclose any information
included in records or files or electronic messages which
became accessible to him/her through their positions, subject
to certain exceptions mentioned in the said Law.
In addition, in Article (378), the Penal Code prohibits the
publication of people's private affairs: "Shall be punishable
by confinement for a period not exceeding one year and by
a fine not exceeding ten thousand Dirhams in both cases or
by one of these two penalties any individual who, through
any means of publicity, publishes news, pictures or comments
pertaining to the secrets of the people's private or familial
lives even if such publications are real and true."
Further
Article (379) forbids the disclosure of entrusted secrets:
"Shall be punishable by confinement for a minimum period
of one year and by a fine of at least twenty thousand Dirhams
or by one of these two penalties any individual who by reason
of his profession, craft, situation or art is entrusted with
a secret and who discloses it in cases other than those permitted
by the law, who uses it for his own advantage or another person's
advantage, all this unless the individual to whom the secret
pertains has consented that it be disclosed or used."
Said
Articles (378) and (379) prohibit those who have access to
people's personal data (including that which may be found
online) from disclosing or publicizing that information. For
those who fail to adhere to the law, the Articles set severe
penalties, which include fines and incarceration.
Whereas the Penal Code deals adequately with the matter of
online privacy rights, the Civil Code contains no provisions
pertaining to the protection of privacy, online or otherwise.
As a result, individuals in the UAE currently do not have
the right to sue and demand compensation for alleged transgressions
of personal privacy.
This
legal void is negatively affecting trade between the UAE and
one of its biggest economic partners, the European Union ("EU").
Under the EU Data Protection Directive, businesses in the
European Economic Area cannot transfer data to a business
based outside the EU unless there exists a trans-border data
flow agreement. EU member states are responsible under Article
(25) of the EU Directive to guarantee that personal data is
not transferred to a "third" (non-EU) country unless
"the third country in question ensures an adequate level
of protection" (Art. 25(1)). Adequacy is to be assessed
"in light of all the circumstances" of a particular
data transfer or set of data transfers, including the nature
of the data, the purpose and duration of processing, the country
of origin and the country of final destination, and applicable
general and sectoral laws, professional rules, and security
measures. Currently, the UAE does not ensure an "adequate
level of protection", nor is it a party to a trans-border
data flow agreement.
Accordingly,
the lack of online privacy laws in the UAE Civil Code and
across the Middle East is frustrating the dealings of Internet
Service Providers (ISPs) in the region with businesses in
the EU. If the legal situation persists, businesses outside
of the Middle East may be more reluctant to operate in the
UAE, which could retard the expansion of e-commerce in general
and the Dubai Internet City in particular. Perhaps most importantly,
the present legal vacuum means that individuals in the UAE
are being denied their right to personal privacy.
As
part of an effort to guarantee online privacy, companies would
be well advised to implement the following interim solutions:
-
Place
privacy policies on their corporate websites;
-
Keep
secure all personal data including names, addresses, and
other details of employees, customers, clients, prospects,
suppliers, and advisers;
-
Instruct
employees to never disclose personal data that they may
have access to unless the purpose of the disclosure is
legitimate and the person to whom the data is disclosed
is a proper recipient;
-
Post
for their employees a clear and detailed set of standards
on usage, storage, and permitted access to email messages;
-
Include
clauses in online contract that safeguard the privacy
of data disclosed to third parties; and
-
Adhere
to a policy of informing consumers of the ways in which
their information might be used and obtaining explicit
consent for such usage.
The
self-regulatory solutions mentioned above are certainly
steps in the right direction, but they cannot be effective
without the enactment and implementation of specific online
personal data laws, the lack of which has become one of
the greatest obstacles facing the new economy. The UAE should,
therefore, either amend its Civil Code to include online
privacy rights on pass specific privacy law in order to
secure the legal and infrastructural foundation for e-commerce
growth.
Top
of Page
Consumer
Protection
At
present, the UAE government has no consumer protection body,
however, there are relevant articles in the UAE Penal Code
which try to deal with fraud, misuse of identity and providing
false information. Other simple consumer protection laws
such as the Law of Cheating in Commercial Transactions (No.
4 of 1979), provide only simple articles about providing
false information regarding products, their origin or contents.
There are no laws or regulations yet governing what information
can be published or put online, and to what extent advertising
of information about products and services may be put forward.
However, in practice one should avoid anything which is
anti-Islamic, against the state and/or immoral.
The
laws also dealing with fraud fall short of governing the
fraud and immoral practices that go on in Cyberspace, and
the Penal Code or the Law of Cheating in Commercial Transactions
need to be stretched to deal with such transactions. The
Private and Public sectors need to work together to adopt
rules and regulations necessary for on-line consumers' protection.
At
the Organisation of Economic Cooperation and Development
(OECD) '2001 Emerging Market Economy Forum' in Dubai, which
marked the first time the event was held outside an OECD-member
country, government representatives together with business
leaders from across the globe discussed the need to create
universal rules on how to conduct e-commerce. Consumer protection
in the online environment is essential to the success of
e-commerce in the business-to-consumer marketplace. While
the Internet provides consumers continuous access to a global
marketplace, its borderless nature creates challenges to
the implementation of traditional consumer laws, policies
and practices. Consumers must be assured of effective protection
regardless of the medium of commerce.
The
OECD Committee on consumer policy developed a set of general
guidelines for government, business associations and consumer
groups to follow in order to protect consumers participating
in electronic commerce without erecting barriers to trade.
The following is an extract from the unclassified document
released by the OECD in 2000:
-
Advertising and marketing should identify the business
on whose behalf the marketing or advertising is being
conducted where failure to do so would be deceptive.
-
Businesses selling, promoting or marketing goods or services
to consumers should not engage in practices that are likely
to cause unreasonable risk of harm to consumers.
-
Businesses
should take into account the global nature of electronic
commerce and, wherever possible, should consider the various
regulatory characteristics of the markets they target.
-
Businesses
should not exploit the special characteristics of electronic
commerce to hide their true identity or location, or to
avoid compliance with consumer protection standards and/or
enforcement mechanisms.
-
Advertising
and marketing should be clearly identifiable as such.
-
Businesses
should develop and implement effective and easy-to-use
procedures that allow consumers to choose whether or not
they wish to receive unsolicited commercial e-mail messages.
-
Businesses
should take special care in advertising or marketing that
is targeted to children, the elderly, the seriously ill
and others who may not have the capacity to fully understand
the information with which they are presented.
Such
industry led initiatives should provide a first line of
defense against false or deceptive online advertising. The
global network challenges the ability of each country or
jurisdiction to adequately address issues related to consumer
protection. In the absence of any laws or regulations it
is construed in legal terms that people are free to do what
they deem appropriate in their practices. However, should
regulation by government be adopted, then these rules should
be very carefully drafted in order not to contradict with
the concept of free trade.
Top
of Page
Media
Broadcasting,
publication and printing in the UAE are governed by the
UAE Federal Law No 15 of 1980 for Printed Matter and Publications.
According
to the UAE Law - media, advertising, broadcasting, publication
or printing of any publications must be approved by the
Ministry of Information. Any matter published, broadcast,
printed or circulated in the UAE must be deposited with
the Ministry of Information and a license obtained from
the Ministry of Information.
Therefore,
for any broadcasting, printing or publishing, the approval
of the Ministry of Information must first be obtained. In
all circumstances, a proper license has to be granted from
the Ministry of Information before broadcasting, printing
or publishing is authorized. In most circumstances, besides
fees for issuance of a license, a bank guarantee is also
required.
It
is not clear from the UAE Law whether the law governs only
publications or broadcasting which is intended for UAE residents,
or whether it also governs international publications or
broadcasting which are intended for broadcast and publication
to persons who are resident outside the UAE. However, the
terms of the Law are general, and can be used to argue both
circumstances, and thus either an amendment to the current
UAE Law is necessary, or new laws need to be drafted to
cope with the future merging of media and information systems
and networks.
It
should be noted, however, that there is currently a mutual
understanding between the Federal government and the local
government of Dubai to allow some exemptions to the above
rules through the issuance of a special license by Dubai
Media City.
Top
of Page
Taxation
There
is no federal tax legislation on the taxation of corporations
in the UAE and instead each emirate has its own tax. There
is currently legislation in force in the emirate of Abu
Dhabi and Dubai establishing a general corporate taxation
regime (the Abu Dhabi Income Tax Decree (as amended) and
Dubai Income Tax Decree (as amended). In practice, however,
only oil, gas and petrochemical companies, hotels and the
branch offices of foreign banks are required to pay tax,
although there is no provision for this in the Law. Such
taxes are normally determined by agreement with the relevant
bodies.
The
Government of the Emirate of Abu Dhabi (the Department of
Customs) does impose customs duties on imports, in accordance
with policies laid down by the UAE Customs Council (a Federal
body) which reflects the UAE's GATT and Gulf Cooperation
Council (GCC) commitments. The Constitution of the UAE specifically
reserves for the Federal Government of the UAE the right
to raise taxes on a Federal basis for the purposes of funding
its budget.
Income
tax is non-existent in the UAE and the only tax which is
charged on individuals, albeit indirectly, is the municipal
tax which is imposed on hotel services, business and residential
property rentals.
Avoidance
of double taxation treaties have been signed with several
countries, such as India, Sri Lanka, Pakistan, Morocco,
Tunisia, Turkmenistan, Syria, Lebanon, Thailand, China,
Poland, Romania, Italy, Holland, Belgium, Singapore, Malaysia,
Indonesia, Finland, Switzerland, Germany, France, and there
are plans to sign such with Canada.
Although
taxation is not an issue immediately pertinent to the UAE,
it is an issue of concern for many other jurisdictions.
The Internet, a market-place without boundaries, presents
complicated administrative challenges for traditional means
of taxation. This possibility and the risk of discriminatory
taxes unfairly applied only to Internet transactions are
among the unknown costs of doing business on-line.
Some
International Electronic Commerce transactions may touch
numerous national and international taxing jurisdictions
- increasing the odds that consumers will be overwhelmed
by multiple taxes. As e-commerce expands - and more businesses
use the Internet - governments are examining how best to
impose taxes. Taxing authorities are concerned that e-commerce
will erode their tax base, and some urge quick action to
impose taxes on e-commerce.
The
immediate question regarding Internet taxation is: what
governing entity or entities have jurisdiction to tax an
Internet transaction? Governments consider criteria as diverse
as location of purchaser, location of server, and location
of the bank from which funds for purchase are withdrawn.
Internet
taxation remains a thorny issue, as countries seek to ensure
that current sales and used taxes are not avoided through
electronic transactions, while at the same time trying to
avoid the imposition of levees that might impede the development
of electronic commerce. A number of countries and organisations
are studying ways to come to a more permanent agreement
that balances a free trade position with revenue concerns.
Top
of Page
|
