Shifting gears
Anwar El Khatib, chief legal counsel of Salik, talks about the UAE’s new Traffic Law and its impact on transforming road safety, business opportunities and industry dynamics.
The United Arab Emirates is steering toward a new era of road safety and traffic management with the introduction of Federal Decree-Law No. (14) of 2024. This legislation supersedes the long-standing Federal Law No. (21) of 1995, marking a pivotal step in aligning the country’s traffic regulations with modern technological advancements and evolving transportation needs. In this comprehensive overview, we explore the significant differences between the old and new laws, explain the provisions of the new law, and examine its anticipated impact on various industries, especially in data monetisation and motor insurance underwriting.
KEY DIFFERENCES BETWEEN THE OLD AND NEW TRAFFIC LAWS
The shift from the 1995 law to the 2024 framework represents a substantial transformation in how traffic is regulated in the UAE. Here are the key differences:
- Modern Definitions and Scope
Article 1 of the new law broadens the legal definitions to include contemporary transportation modes such as electric scooters, self-driving/autonomous vehicles, and personal mobility devices. This expansion ensures that the legal framework is robust enough to accommodate rapid technological advancements, reflecting the UAE’s commitment to fostering innovation in mobility.
- Enhanced Licensing and Registration
The Law introduces stricter conditions for vehicle registration and driving licenses. However, the minimum age for obtaining a driving license has been lowered from 18 to 17 years. This change aims to align with international standards and provide younger drivers with earlier access to driving, accompanied by comprehensive education and testing to ensure road safety.
- Advanced Traffic Control and Safety Measures
The Law highlights the integration of modern technology into traffic management. By utilising electronic systems for monitoring and enforcement, the law aims to streamline traffic flow, enhance safety, and significantly reduce accident rates. These technological interventions are designed to create smarter, more responsive traffic systems.
- Stringent Penalties
The new regulations impose more severe penalties for violations, particularly for offenses such as hit-and-run and driving under the influence. The zero-tolerance policy towards dangerous driving behaviors underscores the UAE’s dedication to protecting its citizens and residents.
ESTABLISHMENT OF THE TRAFFIC AUTHORITY
Article 47 of the Law establishes a dedicated Federal Traffic Council tasked with overseeing the implementation of traffic regulations, ensuring compliance, and coordinating the efforts of the Local Traffic Authorities and various stakeholders involved in traffic management. The Council is expected to enhance the effectiveness of law enforcement, providing a centralised framework for addressing traffic-related challenges and ensuring a consistent application of the law across the emirates.
IMPLEMENTATION AND EXECUTIVE REGULATIONS
The new traffic law is set to come into force in March 2025, as stated in Article 52, giving stakeholders ample time to adapt to the changes. In the interim, several executive regulations are expected to be issued, as outlined in Article 49. These regulations will provide the necessary details and guidelines for the law’s implementation, clarifying specific provisions and outlining compliance standards. They will also establish procedures for addressing violations, ensuring that the law is applied consistently and effectively across the UAE. As such, this article serves as an interpretation of the law’s intent and anticipated impact, pending the full release of executive details.
IMPACT ON INDUSTRIES
- Data Monetisation
The integration of advanced technologies in traffic systems generates a wealth of data, offering significant opportunities for businesses. This data can be monetised through analytics solutions that enhance traffic management and contribute to smart city initiatives. Companies can leverage this data to create innovative products and services that improve public safety and transportation efficiency.
- Motor Insurance Underwriting
The new law enables insurers to refine their risk assessment models by incorporating comprehensive data on driver behavior and compliance with traffic regulations. By linking data monetisation with insurance underwriting, companies can analyse real-time driving data to develop personalised insurance premiums. This approach not only allows for more accurate risk profiling but also incentivises safer driving practices.
- Transportation and Logistics
Improved road safety and traffic efficiency benefit logistics and transportation companies by reducing delays and enhancing the predictability of delivery schedules. This can lead to cost savings, improved customer satisfaction, and greater operational efficiency, as companies can better allocate resources and optimise routes.
OPPORTUNITIES FOR BUSINESSES
- Innovation in Technology
Companies specialising in data analytics, IoT, and smart applications have the opportunity to capitalise on the extensive traffic data generated under the new law. By developing innovative solutions, they can contribute to enhanced road safety and operational efficiency. The potential for collaboration with government agencies and other stakeholders presents additional avenues for growth and impact.
- Insurance Product Development
Insurers can design new products that incentivise safe driving and offer discounts for compliance with traffic regulations. These products not only attract more customers but also help reduce claims and enhance profitability. By utilising data from advanced traffic systems, insurers can tailor these products to reflect individual driving habits and conditions, creating a more competitive market landscape.
- Compliance and Consulting Services
With the complexity of the new regulations, there is a growing demand for consulting services to help businesses navigate compliance. By providing guidance on best practices and legal requirements, consulting firms can play a crucial role in ensuring that companies adhere to the new standards. This presents opportunities for firms to establish themselves as trusted advisors in the evolving regulatory environment.
CONCLUSION
The UAE’s new traffic law represents a significant advancement in the country’s approach to road safety and traffic management. By establishing a dedicated Federal Traffic Council and aligning with modern technological trends, the law not only enhances the driving experience but also creates new opportunities for business innovation and growth. As the law comes into force in March 2025, industries can seize these opportunities to drive economic progress while contributing to a safer, more efficient transportation ecosystem. The forthcoming executive regulations will further clarify the law’s application, ensuring that all stakeholders are well-prepared to comply with its provisions and capitalise on the benefits it offers. This interpretation of the new traffic law highlights the UAE’s proactive stance in shaping a future-ready transportation landscape, paving the way for continued development and prosperity in the region.
Text by:
Anwar El Khatib, chief legal counsel, Salik
