Ministry of Economy: New Law on Combating Commercial Fraud Bolsters UAE’s Legislation and Protects Consumers in Line with Best Global Standards

The Ministry of Economy (MoEc) announced that Federal Decree-Law No. (42) of 2023 on Combating Commercial Fraud has been introduced to significantly enhance consumer rights protection and combat commercial fraud in the UAE. This new law aligns with the best global standards, establishing comprehensive mechanisms and regulations to prevent the trade of counterfeit, adulterated, and corrupt products, ensuring fair competition, and bolstering the UAE’s global competitiveness.

H.E. Abdullah Ahmed Al Saleh, Undersecretary of the Ministry of Economy, highlighted that this law is 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,” H.E. said.

The new law aims to enhance the competitiveness of the business environment for companies and trademark owners in the country, replacing the previous law on combating commercial fraud. It also seeks to foster innovation in businesses and support the protection of intellectual property. The law aligns with federal laws on ‘Consumer Protection’, ‘Trademarks’, ‘Copyright and Neighbouring Rights’, and ‘Commercial Agencies’. Its provisions have been developed with a forward-thinking and adaptable approach that takes future developments into account.

H.E. Al Saleh added, “In collaboration with federal and local government entities, as well as the private sector, the Ministry of Economy has enhanced laws concerning commercial fraud. This effort has created a competitive environment for the establishment of businesses, increased flexibility in economic and trade activities, and strengthened the UAE's status as a leading global hub for commerce, business, and innovation.”

The Ministry emphasized the law’s crucial role in fostering a competitive trade and business environment. It will drive the growth and improvement of the domestic trade system and enhance the retail sector. The law will promote sound commercial practices and effectively combat the sale of counterfeit, adulterated, and corrupt products. This will attract major brands and positively impact their economic performance. Additionally, it will encourage research, development, and innovation, benefiting consumers and the UAE’s overall economy.

Key outputs of the new law include:

1. Creating a Conducive Purchasing Environment: By effectively combating counterfeit, fraudulent, and corrupt goods, the law applies to all types of commercial deceit across the country’s markets, including free zones.

2. Imposing Administrative Penalties: Violations result in penalties designed to encourage compliance among businesses by deterring the sale of counterfeit, adulterated, or corrupt products.

3. Strengthening Collaboration: Local and federal authorities will work together to address counterfeit and adulterated products, promoting investments and business activities.

4. Implementing Regulations: Regulations will eliminate counterfeit, adulterated, or corrupt products from markets and warehouses, including reimbursing their value and ensuring supplier compliance with commercial records and product release requests.

5. Establishing the Supreme Committee for Combating Commercial Fraud: This committee will effectively implement measures against commercial fraud across UAE markets by collaborating with federal and local authorities.

6. Prohibiting Involvement in Fraudulent Activities: The law prohibits any involvement in the importation, exportation, production, manufacturing, display, sale, storage, transportation, marketing, trading, promotion, disposal, or possession with the intention to sell counterfeit, corrupt, or adulterated products, aligning with the best international standards and reinforcing the UAE's robust legislation against such practices.

Commercial fraud involves deceiving a consumer through various means, such as altering or modifying the nature, quantity, type, price, essential characteristics, origin, source, validity, or providing inaccurate or misleading commercial information about the promoted products, ultimately misleading the customer.

The MoEc, in collaboration with economic departments, has been conducting regular inspection campaigns in local markets to combat instances of commercial fraud and trademark counterfeiting. Since the start of 2023, a total of 4,444 inspection rounds have been conducted by the Ministry, identifying 620 violations.