The UAE has enhanced its legislation to combat commercial fraud, bolstering consumer protections and ensuring fair market competition. The Ministry of Economy (MoEc) has announced Federal Decree-Law No. 42 of 2023 on Anti-commercial Fraud, which aims to align the UAE with global standards and provide a comprehensive legal framework to address fraud in goods and services.
Key Provisions of the New Law
1. Expanded Definition of Fraudulent Goods:
- The law now includes goods that do not meet the specifications, standards, or descriptions declared by the supplier, as well as expired or damaged goods.
2. Comprehensive Definition of Suppliers:
- A supplier is defined as any entity involved in importing, exporting, manufacturing, selling, or storing goods and services. This clarification helps ensure accountability across the supply chain.
3. Roles and Responsibilities:
- The law outlines the duties of authorities, courts, and the new Higher Committee in handling fraud cases, providing a clear framework for enforcement.
4. New Regulations for Suppliers:
- Suppliers must notify authorities and customers when removing prohibited goods and are required to replace or refund fraudulent items. Authorities have the power to remove such goods at the supplier’s expense and impose penalties.
5. Enhanced Inspection Powers:
- Judicial officers are authorized to inspect, seize, and sample goods suspected of fraud, and can enter non-residential premises without prior notice if necessary.
6. Stricter Penalties:
- Fines range from Dhs5,000 to Dhs2,000,000 depending on the severity of the offence. Imprisonment can last from 6 months to 2 years, with extensions in severe cases. Managers aware of fraudulent activities who fail to act may also face penalties, including imprisonment.
7. Reconciliation Mechanism:
- Offenders can settle cases by paying a fine, provided the offence does not involve food, medicine, or products affecting public health and safety.
8. 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.
Combating Fraud
The MoEc has intensified inspection campaigns to uncover and penalize commercial fraud. In 2023 alone, 4,444 inspections revealed 620 violations. The updated law aims to enhance the efficiency of the economic sector and boost the competitiveness of trademark owners, establishing robust mechanisms to combat counterfeit, adulterated, and corrupt products and services.
Commitment to Fair Competition and Innovation
Abdullah Ahmed Al Saleh, Undersecretary of the Ministry of Economy, highlighted that this law represents a significant step 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.
Forward-Thinking Approach
Al Saleh emphasized that the law’s forward-thinking approach is designed to adapt to future economic developments, ensuring that the UAE remains a leader in maintaining a robust and competitive market environment. The new legal framework is intended to safeguard consumers from deceitful practices and ensure that the UAE’s commercial environment remains fair and competitive.
This updated legislation underscores the UAE's commitment to protecting consumers and maintaining a transparent and fair marketplace.
News Source: Gulf Business
