Ministry of Economy: New law on combating commercial fraud bolsters UAE’s legislation and protects consumers in line with best global standards

The 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.

>> Abdullah Al Saleh: The law marks a significant milestone in the country's efforts to develop proactive legislation for economic sectors and enhance governance within business environment.

The Ministry of Economy (MoEc) has clarified that Federal Decree-Law No. (42) of 2023 on Combating 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 the best 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.

H.E. 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,” H.E. said.

H.E. said: “The introduction of this new law aims to enhance the competitiveness of the business environment for both companies and trademark owners in the country, replacing the previous law on combating commercial fraud. Additionally, it seeks to foster innovation in businesses and provide support for 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.”

“In the past stage, the  Ministry of Economy  has collaborated with partners of federal and local government entities, as well as the private sector, to enhance law concerning commercial fraud. This effort has been instrumental in creating a competitive environment for the establishment of businesses, increasing flexibility in economic and trade activities, and strengthening the UAE's status as a leading global hub for commerce, business, and innovation.” H.E added.

The Ministry has 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, in turn, 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.

The MoEc highlighted the significant outputs of the new law, which encompassed:

• Creating a conducive and secure purchasing environment for purchases 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.

• Violations of the law result in the imposition of administrative penalties designed to encourage greater compliance among businesses by deterring them from selling counterfeit, adulterated or corrupt products within the country.

• Strengthening collaboration between the local and federal authorities and empowering local authorities to address counterfeit and adulterated products, thereby promoting investments and business activities in the country.

• Implementing regulations to eliminate counterfeit, adulterated, or corrupt products from markets and warehouses. This includes reimbursing their value and ensuring that suppliers comply with mandatory commercial records and requests for product release.

• Establishing the Supreme Committee for Combating Commercial Fraud to effectively implement measures against commercial fraud across UAE markets by collaborating with federal and local authorities.

• Prohibiting 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. Similarly, undertaking any of these activities is forbidden. This aligns with the best international standards and reinforces the UAE's reputation as a country with robust legislation against such practices. This comprehensive approach aims to protect the interests of both businesses and consumers alike.

According to the law, commercial fraud involves deceiving a consumer through various means. This deception can involve altering or modifying elements such as 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's Efforts to Combat Commercial Fraud within the Country

The MoEc, in collaboration with the 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, which have identified 620 violations.