“Digital Trade Law” fueling growth and innovation in Kuwait’s digital economy

• It will provide electronic payment options compatible with local banking systems.

• It will prevent misleading advertising or unjustly using logos or trademarks.

• The consumer has the right to withdraw from the contract within 14 days, except for some products and services.

The Ministry of Commerce and Industry in Kuwait aims to introduce the “Digital Trade Law” in the State of Kuwait, to establish a comprehensive regulatory framework that supports and enhances the digital trade sector in the country.

This law represents a significant advancement in regulating digital trade in Kuwait, striking a balance between facilitating commercial activities and protecting consumer rights, while enhancing the overall digital economic environment in the country.

Furthermore, the law aims to promote transparency, protect consumer rights, and regulate relationships between practitioners and consumers, as well as between relevant government agencies, while addressing technical developments and future challenges.

The Minister of Trade and Industry, Khalifa Al-Ajeel, will present the draft Digital Trade Law on Wednesday during a press conference. Following the presentation, the draft will remain open for public feedback until early January, allowing legal specialists, business owners, and companies to submit their comments before its adoption and issuance by the Council of Ministers.

The law highlights basic terms such as “e-commerce,” “merchant,” “practitioner,” “consumer,” and “sensitive data,” and clarifies its scope of application. It covers all commercial activities conducted through electronic or digital means for the purpose of displaying or providing products or services.

The law helps regulate registration processes in the commercial register and the register of practitioners to ensure transparency. It requires each trader to register their online store in the commercial register, while a separate “Practitioners Register” is established for those practitioners who are not registered in the commercial register.

The “Digital Commerce Law” addresses the organization of professions and the determination of approved workplaces, ensuring clarity and legal compliance. It places a strong emphasis on protecting consumer rights by imposing clear obligations on product or service providers to disclose their identity, the terms and conditions of the contract, and accurate data about the products or services.

This law grants consumers the right to withdraw from a contract within 14 days, with specific exceptions for products and services that cannot be returned. It also establishes transparent and effective mechanisms for addressing consumer complaints and ensures compensation in cases of delivery delays or breach of contract.

The law establishes regulations for electronic advertisements to control online advertising and promotions, including measures to prevent misleading advertisements and the improper use of logos or trademarks.

The law allows the use of promotions without prior approval, provided that clear conditions are met. However, discount campaigns must receive prior approval from the Ministry of Commerce and Industry, to ensure consumer protection.

The law also covers digital documents and digital signatures, setting standards for safe document preservation. Providers of products or services must obtain a license to use a digital signature, ensuring it cannot be modified or forged, and establishes responsibilities in case of misuse.

The law will require product or service providers to offer electronic payment options compatible with local banking systems and ensure they are secure. It will also allow the use of advanced technologies such as distributed record systems and smart contracts to enhance the consumer experience, provided they are transparent and free from censorship.

Regarding protection of the intellectual property, the law emphasizes the prohibition of using any protected content without a license, holding product or service providers responsible for any violations.

The law also establishes mechanisms to address complaints related to intellectual property violations, including the imposition of fines and the blocking of offending stores when necessary.

The law addresses cybersecurity by requiring product or service providers to apply sound data protection standards, including the use of encryption, periodic system updates, and reporting security breaches within 72 hours of detection, while taking responsibility for any damages caused by such breaches.

The law specifies the role of the Ministry of Commerce and Industry, in supervising e-commerce and issuing necessary regulations. It also establishes two committees: ‘The Violations Control Committee’ and ‘The Dispute Resolution Committee’ with powers to issue warnings, impose fines, and temporary closure of offending stores.

Source: Al Jarida