UAE Bolsters Anti-Commercial Fraud Framework with New Executive Regulations
Abu Dhabi, UAE – The United Arab Emirates has taken significant steps to fortify its legislative and regulatory landscape against commercial fraud with the recent introduction of the Executive Regulations of Federal Law by Decree No. (42) of 2023 concerning Anti-Commercial Fraud. Issued under Cabinet Decision No. (107) of 2026, these regulations aim to enhance market integrity, protect consumer rights, and safeguard the interests of trademark owners within the nation’s dynamic business environment.
During a recent media briefing, officials from the Ministry of Economy and Tourism highlighted the comprehensive nature of the new regulations, emphasizing their role in establishing robust mechanisms to address improper commercial practices. The framework is designed to improve compliance among commercial establishments and companies, while also boosting the efficiency of supervisory and enforcement procedures pertaining to commercial fraud and the trade of counterfeit, adulterated, or fake goods.
Pillar of Market Integrity and Business Confidence
A representative from the Ministry of Economy and Tourism underscored that combating commercial fraud is a fundamental pillar for fostering an efficient and transparent national economy that stimulates investment and innovation. The Executive Regulations mark a new milestone in modernizing market control mechanisms, aligning them with international best practices. These measures are expected to reinforce consumer protection against illicit goods, streamline seizure and inspection processes, and ultimately strengthen confidence in the UAE’s business environment, in line with the nation’s strategic vision.
The regulations were developed to adapt to rapid market evolution and contemporary trade patterns, including the challenges posed by e-commerce. They aim to bolster the competitiveness of the internal trade system by enhancing coordination among national authorities and improving law enforcement efficiency. This comprehensive approach is crucial for maintaining market integrity and solidifying the UAE’s position as a leading global hub for commerce.
Key Provisions for Enhanced Oversight and Enforcement
The new Executive Regulations introduce several critical provisions designed to empower proactive market oversight and streamline enforcement:
- Inspection and Detection: Clear procedures are outlined for inspections, violation detection, and handling of counterfeit goods.
- Custody and Disposal: Regulations govern the custody of seized items and their disposal to prevent re-circulation, including structured procedures for destruction.
- Inter-Agency Coordination: Enhanced coordination and data exchange between the Ministry and competent authorities on enforcement actions are mandated.
- Administrative Penalties: Provisions for applying administrative penalties are detailed to elevate compliance levels and deter unlawful commercial practices.
- Governance and Transparency: Principles of governance and transparency are reinforced through documentation and traceability across all stages of dealing with seized items.
Immediate Action on Illicit Goods
The regulations prescribe specific and immediate procedures for addressing adulterated, spoiled, or counterfeit goods. Suppliers are now required to cease sales and withdraw affected items from markets and warehouses within 24 hours of receiving notification. Furthermore, all points of sale must be notified to withdraw these goods, with public announcements made within 48 hours in both Arabic and English, detailing the goods and associated trademarks. The Ministry or competent authority will take custody of such goods at the violator’s expense, with provisions for immediate withdrawal by authorities if suppliers fail to comply.
An integrated framework for the safe disposal and destruction of illicit goods has also been established. This includes provisions for use or recycling where feasible and environmentally beneficial, and clear procedures for destruction to prevent re-use or re-circulation. The Supreme Committee for Combating Commercial Fraud will review applications for use, recycling, or destruction before judicial referral. In specific cases, re-export to the country of origin is permitted within 30 days if the goods pose no health or safety risks and no destruction order has been issued. Destruction operations, based on court judgments or Supreme Committee decisions, must be carried out by a joint team or approved specialized entity within 15 working days.
Administrative Penalties and Conciliation Procedures
The regulations stipulate administrative fines for traders who are proven to have known, or should have known through their professional expertise, that adulterated, spoiled, or counterfeit goods were harmful. This extends to various categories including pharmaceutical drugs, agricultural produce, organic food products, re-circulation of unfit goods, and engaging in misleading promotion or providing false data.
Furthermore, the regulations introduce conciliation procedures, allowing violators to submit a request within 10 working days of notification. The Ministry or competent authority will review the request within 15 working days. Conciliation may be approved if no prior penalties were incurred within the last 12 months, the violation was unintentional, the causes of the violation are rectified, and the conciliation amount is deposited. While conciliation offers an avenue for resolution, it does not absolve the party from civil liability for any damages caused.
The Ministry of Economy and Tourism affirmed that the primary objective of these regulations extends beyond mere penalty imposition, aiming instead to cultivate a robust culture of compliance, support legitimate commercial establishments, and elevate consumer protection standards. The Ministry encourages commercial establishments, trading companies, suppliers, and distributors to adhere strictly to the new provisions and urges consumers to report any non-compliant practices, underscoring their crucial role in safeguarding markets and combating commercial fraud.