Weekly Spotlight: The DIFC Launches a Consultation on Amendments to the 2007 Data Protection Law

The DIFC has launched a consultation on proposed amendments to the 2007 Data Protection Law. The consultation ends on 18 August 2019. If the amendments to DIFC Law No. 1/2007 are approved the Law’s remit will be expanded.

The main proposals are to align the 2007 law to incorporate international data protection standards, including elements of the EU General Data Protection Regulation and the California Consumer Privacy Act and not just incorporate EU best practices.

It is also proposed to expand the compliance framework and safeguards to include principles of accountability, jurisdiction, data breach notification, prior consultation and data protection officer appointments and provide clarity on consent and data subjects’ rights with respect to advance technology developments. Finally it is proposed to revise the powers of the Commissioner of Data Protection, administrative requirements and sanctions and enforcement.

Weekly Spotlight: DIFC Insolvancy Law Approved

Dubai’s Ruler has approved a new DIFC Insolvency Law which will come into force on 28 August 2019. New Insolvency Regulations have also been approved and they will come into force on 28 August 2019 as well.

DIFC Law No. 1/2019 provides for a new administration process where there is evidence of mismanagement or misconduct. It also enhances the rules governing winding up procedures and incorporates the Uncitral Model Law on cross border insolvency proceedings with certain modifications for application in the Centre. In addition, it introduces a new debtor in possession bankruptcy regime in line with best international practices.

Weekly Spotlight: Launch of a New Residency System for Expatriates in Dubai

Dubai’s Ruler and the UAE’s Vice President has announced the launch of a new residency system for expatriates. Under the Golden Card Scheme, residency for qualifying investors, entrepreneurs, those with special talents, researchers and outstanding students will be available. The spouses and children of Golden Card holders will also be able to obtain permanent residency under the scheme.

6800 expatriates from more than 70 countries have already been selected for the scheme. The investors are worth. an estimated 100 billion AED. The new permanent visa will generate foreign investment, encourage entrepreneurship, and attract top engineers, scientists and students. Exact criteria for the visa are yet to be made public but more details are expected in the coming days.

In the past, foreign residents typically had renewable visas valid for two or three years which were often tied to their employment. However, last year the government announced plans to reform its visa policies.

Weekly Spotlight: Amendments to the Abu Dhabi Global Market’s Crypto Asset Activities Guidance

Abu Dhabi Global Market’s Financial Services Regulatory Authority has amended its Crypto Asset Activities Guidance. The Guidance was first issued in mid-2018 and has since been amended twice. It was the first guidance of its kind when it was published then. The amended Guidance includes key updates on Stablecoins and Fiat Tokens, Custody, Technology Governance and Anti-Money Laundering and Sanctions Rules and Guidance.

Stablecoins which are fully backed by fiat currencies (Fiat Tokens) will be treated as a form of digital currency. When they are used as a payment instrument for Money Transmission which is defined under the Global Market’s Financial Services and Markets Regulations 2015, the activity will be licensed and regulated as Providing Money Services. The amended guidance also sets out the Authority’s approach to regulating issuers, custodians and exchanges using Fiat Tokens. The amended guidance provides further clarity on the types of crypto asset custody activities which can be undertaken and sets out the Authority’s expectations in terms of custody governance and operations.

In addition, there are amendments to the technology governance provisions in the guidance. For example, there are changes in the underlying protocol of a crypto asset which results in a fork or coding change, and the associated governance and control expectations for crypto asset exchanges and license holders.

Finally, the guidance has been amended to reflect the latest changes in anti-money laundering and sanctions changes and there is additional clarity on the use of new regulatory and surveillance technologies in this area.

Weekly Spotlight: Changes to the DIFC’s End of Gratuity Scheme Announced

The Dubai International Financial Centre have announced changes to the Centre’s end of gratuity scheme will come into effect on 1 January 2020. It follows the launching of an informal consultation in March 2019 where the Governor of the DIFC sent a letter to several hundred senior executives on replacing the end of service gratuity system with a new Employee Workplace Savings Trust savings scheme.

Under the changes, employees will contribute funds on an ongoing basis rather than being paid by their employer when they leave. However, the rate will be the same as the current gratuity and employees will be able to make extra contributions if they want to. Employees will also be able to determine if they want to invest in low, medium or high-risk options. When they leave they will receive their contributions and the end of service gratuity acquired to the date of the change. The replacement will only affect new benefits and gratuities. A new law laying out the provisions and requirements in detail will be issued and the scheme will be regulated by the Dubai Financial Services Authority. The master trust housing the scheme will be based in the DIFC.

However, it is not clear if the amended framework will only apply in the DIFC or will apply across the UAE.