AI regulation in the UAE: navigating a holistic framework

The adoption of AI across the globe is proceeding at a rapid pace. Disruption in many sectors has been attributed to the use of AI models in various industries. This has led many jurisdictions to play catch-up to both regulate and foster AI. The Gulf Cooperation Council (GCC) has been quite proactive in this regard. The UAE, at the forefront, has implemented national policies regarding the adoption of AI across government services.

In recent years, the country has updated legislation, procedures, and policies, including new intellectual property (IP) legislation, data privacy regulations, and competition laws, among other changes. However, no GCC country has yet adopted a full national legislation. AI is regulated with a combination of different federal, sectoral, and existing laws, although regulations are being worked on. These are supplemented by the adoption of policies and principles.

The UAE is divided into seven emirates. Federal law applies to each one, while each emirate has also promulgated its own laws. In addition, the UAE allows the operation of several free zones, which are economic areas distinct from onshore areas that have regulatory schemes, rules, and exemptions for conducting business related to specific sectors.

Many free zones – such as the Dubai International Financial Centre (DIFC), the Abu Dhabi Global Market, and Dubai Silicon Oasis – offer licences geared towards AI companies that offer tax benefits, visas, etc. For example, DIFC has an AI-specific licence aimed towards entrepreneurs in that space (see “UAE launches ground-breaking artificial intelligence and coding license”).

The UAE updated several components of its IP legislation in 2021, including its Patent Law, Trademark Law, and Copyright Law. There were also updates to the Data Protection Law. None of the laws specify or have references to AI (it is worth noting, however, that the DIFC amended its Data Protection Law to incorporate the processing of data via autonomous and semi-autonomous systems, including AI).

The UAE has also adopted its National AI Strategy 2031 as an integral part of its policy on AI since 2017. The main objective of the strategy is to facilitate the integration of AI and related technologies across different sectors, with the long-term aim to position the UAE as a forerunner in AI innovation and investments. Furthermore, the UAE established the UAE Council for Artificial Intelligence, which is tasked with the supervision and providing guidance regarding the integration of AI in government entities.

Entities are also being set up within each emirate. For instance, the Artificial Intelligence and Advanced Technology Council has been formed to support Abu Dhabi’s vision to be a leader in research and investment related to AI. Similarly, Dubai set up the Dubai Centre for Artificial Intelligence and the Dubai Future Council on Artificial Intelligence.

In the absence of an express federal legislation, existing laws may be used to fill in the gap. Federal Decree-Law No. 38 of 2021 on Copyright and Neighboring Rights, along with its implementing regulation (Cabinet Resolution No. 47 of 2022), outlines the rights of copyright holders and their licensing, which governs the use of IP by third parties, particularly in training data. The UAE does not recognise “fair use” as understood in the US but has concepts of fair dealing; i.e., the use of copyright content for educational purposes.

Federal Decree by Law No. 45 of 2021 Concerning the Protection of Personal Data applies to the electronic processing of data related to residents in the UAE. It requires the lawful processing of personal data, consent focused data collection, and requirements for having filters for output deemed unlawful.

Federal Decree Law No. 25 of 2018 on the Projects of Future Nature gives the federal government the authority to grant licences for “implementation of any innovative project based on modern technologies of a future character or using artificial intelligence”. Prohibitions that would normally apply in obtaining a licence would be exempt for these companies. However, the law does not define AI or innovative project, so the law is applied on a case-by-case basis, with the onus on the entity seeking exemptions to show innovation.

On top of these, developers and users of AI systems need to pay attention to the UAE Civil Code, the Consumer Protection Code, and the Cybercrimes Law as the laws could make them liable for negligence, defectiveness, and liability for products and/or services.

Industry-specific legislation or guidelines also need review; however, some of these matters are also governed by each emirate in addition to federal law. For example, Dubai’s Autonomous Vehicles Regulation (Law No. 9 of 2023) applies throughout the emirate and even in free zones. It prohibits any autonomous vehicle from operating on the roads in Dubai without the necessary licence from the authorities. The Roads and Transport Authority sets out the compliance that vehicles must adhere to.

Similarly, the Central Bank of the UAE has issued the “Guidelines for Financial Institutions Adopting Enabling Technologies”, which covers AI, analytics, blockchain, verification through biometrics, etc.

Under the current standards of IP law, an AI cannot own or register IP under its own name. The UAE Law on Industrial Property states (and as per the practice) only a natural person can be named an inventor. Similarly, only a natural person can be the owner of a trademark or have copyright assigned to them (including a company).

There are no restrictions on using AI to create new trademarks (that fall under the definition of trademarks) or works, but they are subject to the IP laws if they are created using infringing material. Similarly, data and content obtained from data scraping is subject to the terms and conditions of that website; however, there are no known cases of enforcement of a website’s terms and conditions.

Under Article 3 of Federal Decree-Law No. 36 of 2023 Regarding Regulating Competition, the Competition Law applies to all undertakings with regard to the exploitation of IP rights inside and outside the UAE. The Competition Law bans restrictive agreements such as collusion and price fixing, and abuse of a dominant position in the relevant market (e.g., selling a good or service at a price that hinders other undertakings from competing or unjust discrimination between consumers in identical contracts). Predatory pricing restrictions are also included. The implementation of AI in commerce and its use can fall within the scope of these restrictions.

The UAE has adopted UNESCO’s Recommendation on the Ethics of Artificial Intelligence and, as per the National AI Strategy 2031, adopted a non-binding UAE Charter for the Development and Use of Artificial Intelligence. The UAE’s AI Ethics Principles revolve around the following tenets identified by Thomson Reuters:

• Transparency – ensuring that AI systems and their decision-making processes are understandable and accessible to users;

• Accountability – establishing clear lines of responsibility for the development and use of AI systems; and

• Fairness – mitigating bias in AI systems to ensure equitable treatment of all individuals and groups.

The government has also published a guide on the use cases of generative AI.

As a whole, AI regulations are still evolving. A federal law is expected but as of now, companies and users need to keep in mind the holistic approach to AI regulation in the UAE.