Understanding UAE’s new law on counterfeit goods and services

The UAE has updated its laws to fight against commercial fraud, enhancing protections for consumers to ensure fair competition in the market.

The Ministry of Economy (MoEc) has clarified that Federal Decree-Law No. (42) of 2023 on Anti-commercial fraud contributes to the creation of an integrated legislation that will significantly enhance consumer rights protection and combat commercial fraud in the UAE, aligning with global standards. 

This law introduces comprehensive mechanisms and regulations to prevent the trade of counterfeit, adulterated, and corrupt products and to combat counterfeiting activities, ensuring fair competition and bolstering the UAE’s global competitiveness.

Combating fraud

The MoEc, in an official statement, said it had intensified inspection campaigns to identify and penalise commercial fraud. 

In 2023 alone, 4,444 inspections uncovered 620 violations.

In a note explaining the provisions of the new law, Al Tamimi & Co, write, “The new law has expanded its definition of fraudulent goods to now include goods that don’t conform to the specifications, standards, or descriptions declared by the supplier and goods that are expired or damaged. Moreover, the law now also makes clear a definition of what a “supplier” is…This new legislation has enhanced consumer protection against fraud in all its forms through several amendments. ”

The ministry noted that the amended law enhances the efficiency of the economic sector and the competitiveness of trademark owners, while also establishing integrated mechanisms to combat counterfeit, adulterated, and corrupt products as well as services.

Abdullah Ahmed Al Saleh, undersecretary of the Ministry of Economy, highlighted that this law marks a significant milestone in the UAE’s transition towards an economic model based on fair competition and innovation. “The primary objective of this law is to enhance the regulatory and legislative landscape for the economic sector, reinforcing the business environment and governance in line with the ministry’s strategic objectives,” he said.

Here are the key points of the new law:

• Definition of fraudulent goods:

1. 1. • The law now includes goods that don’t match the supplier’s declared specifications, standards, or descriptions, and those that are expired or damaged.

• Supplier:

1. 1. • A supplier is anyone involved in importing, exporting, manufacturing, selling, or storing goods and services. This comprehensive definition helps clarify responsibilities.

• Roles and responsibilities:

1. 1. • The law clearly defines the duties of various entities like authorities, courts, and the new Higher Committee in handling fraud cases.

• New regulations for suppliers:

1. 1. • Suppliers must now notify authorities and customers when removing prohibited goods and are obligated to replace or refund fraudulent items.
      • Authorities can remove such goods at the supplier’s expense and impose penalties.

• Inspection powers:

1. 1. • Judicial officers can inspect, seize, and sample goods suspected of fraud, entering non-residential premises without prior notice if necessary.

• Stricter penalties:

1. 1. • Fines now range from Dhs5,000 to Dhs2,000,000, depending on the severity of the offence.
      • Imprisonment can last from 6 months to 2 years, extendable in severe cases.
      • Managers aware of fraudulent activities but not acting to prevent them may also face penalties, including imprisonment.

• Reconciliation mechanism:

1. 1. • Offenders can settle cases by paying a fine, provided the offence does not involve food, medicine, or products that affect public health and safety.

• Appeal procedures:

• • Appeals against decisions must be filed within 15 days and will be decided within 30 days. Seized goods that risk perishing must be addressed by the court within 24 hours.
• Regular inspections:
• • • The Ministry of Economy (MoEc) has intensified inspection campaigns to identify and penalise commercial fraud. It said that over 4,444 inspections uncovered 620 violations in the country.

Al Saleh emphasised that this law’s forward-thinking approach is designed to adapt to future economic developments, ensuring the UAE remains a leader in maintaining a robust and competitive market environment.

This new legal framework intends to safeguard consumers from deceitful practices and ensure that the UAE’s commercial environment remains fair and competitive.

Read: Abu Dhabi warns residents, tourists against fake currency dealers