UAE Anti-Commercial Fraud Law

Article (1) Definitions

General and enforcement provisions

For the purposes of this Decree-Law, the following words and expressions have the meanings assigned to them, unless the context requires otherwise: State: The United Arab Emirates. Ministry: The Ministry of Economy. Minister: The Minister of Economy. Competent Authority: The competent local authority in the relevant Emirate entrusted with applying this Decree-Law. Competent Court: The competent federal or local court, as the case may be. Supreme Committee: The Supreme Committee for Combating Commercial Fraud. Commercial Fraud: Deceiving a customer by any means by substituting or changing the nature, quantity, kind, price, essential characteristics, origin, source or validity of goods; providing incorrect or misleading commercial information about promoted products; or any other matter concerning them that leads to deception of the customer. Goods: Any natural material or animal, agricultural, industrial, processed or intellectual product, including basic and luxury products and raw, manufactured and semi-manufactured materials. Fraudulent Goods: Goods altered in a manner that deprives them of part of their material or moral value, whether by addition, reduction or a change to their substance, nature, kind, type, properties, form, components, measure, dimensions, number, capacity, standard, origin or source; goods advertised or promoted contrary to their true nature; or goods that do not conform to the specifications and standards prescribed in the State. Spoiled Goods: Goods no longer fit, wholly or partly, for exploitation, use or consumption. Counterfeit Goods: Goods bearing, without authorisation, a trademark identical or similar to a legally registered trademark. Establishment: Any person carrying on an economic activity, any person associated with it, or any grouping of such persons, irrespective of the legal form through which economic activity may be carried on in the State. Supplier: Any natural or legal person that imports, exports, re-exports, manufactures, produces, markets, circulates, promotes, disposes of, sells, possesses, stores, transports or offers goods for its own account or for the account of another. Customer: The natural or legal person who purchases the goods. Withdrawal of Goods: Any measure intended to prevent fraudulent, spoiled or counterfeit goods from being placed on the market in the State.

Article (2) Objectives of the Decree-Law

General and enforcement provisions

This Decree-Law aims to: 1. Combat the counterfeiting of genuine goods and commercial fraud in all its forms and types. 2. Establish mechanisms, controls and procedures to combat commercial fraud and prevent trade in counterfeit, fraudulent and spoiled goods. 3. Create a lawful commercial environment conducive to the protection of intellectual property rights.

Article (3) Scope of Application

General and enforcement provisions

This Decree-Law applies to every person who commits an act of commercial fraud in the State, including in free zones.

Article (4) Fraudulent, Spoiled or Counterfeit Goods

General and enforcement provisions

1. It is prohibited to import, export, produce, manufacture, offer, sell, store, transport, market, circulate, promote or dispose of fraudulent, spoiled or counterfeit goods, or to possess them for sale. Attempting any such act is also prohibited. 2. A person violates this Decree-Law if that person commits, participates in or attempts any of the following: a. Importing fraudulent, spoiled or counterfeit goods, or materials intended for such purposes, for the purpose of commercial fraud; or knowingly exporting, re-exporting, manufacturing, producing, selling, storing or transporting them. b. Deceiving, defrauding or counterfeiting in relation to the kind, number, quantity, dimensions, measure, weight, capacity, standard, identity, reality, nature, qualities, components, origin, provenance, composition or expiry date of goods. c. Possessing, directly or through another, for the purpose of marketing, circulating, promoting or offering for sale fraudulent, spoiled or counterfeit goods, or materials used to adulterate or counterfeit goods. d. Using utensils, containers, wrappers, packaging, labels or printed matter to equip or prepare fraudulent, spoiled or counterfeit goods intended for sale. e. Filling, packaging, bundling, tying, distributing, storing or transporting fraudulent, spoiled or counterfeit goods. f. Possessing fraudulent, spoiled or counterfeit goods with the intention of altering, changing or substituting them. g. Describing, advertising or presenting goods in a manner containing false, deceptive or misleading information.

Article (5) Withdrawal from Markets and Warehouses and Destruction

General and enforcement provisions

1. On its own initiative or upon an order of the Ministry or Competent Authority, as the case may be, a Supplier shall withdraw fraudulent, spoiled or counterfeit goods from markets and warehouses, notify the Competent Authority or Ministry, as applicable, and announce the withdrawal by appropriate means. The Competent Authority or Ministry may withdraw such goods and dispose of, destroy or return them to their source at the Supplier's expense, without prejudice to the penalty imposed on the Supplier. The Executive Regulation shall specify the necessary procedures, controls, time limits and coordination between the Ministry and Competent Authority. 2. In every case, the Supplier shall pay all costs and expenses incurred by the Competent Authority or Ministry in withdrawing, disposing of, destroying or returning the goods under Clause 1.

Article (6) Customer's Knowledge of Commercial Fraud

General and enforcement provisions

1. A Supplier is not exempt from the penalty prescribed by this Decree-Law by proving that the Customer knew the goods were fraudulent, spoiled or counterfeit. 2. Subject to Clause 1, the Executive Regulation shall regulate the cases in which an administrative fine may be imposed on a Customer who is proved to have known that the fraudulent, spoiled or counterfeit goods, or materials used in their adulteration, were harmful to human or animal health and safety.

Article (7) Refund for Fraudulent, Spoiled or Counterfeit Goods

General and enforcement provisions

At the request of a good-faith Customer, the Supplier shall refund the value of fraudulent, spoiled or counterfeit goods, replace them or exchange them, without prejudice to the Customer's right to claim compensation.

Article (8) Supplier Obligations

General and enforcement provisions

A Supplier shall: 1. Upon request, provide the Competent Authority or Ministry, as applicable, with the mandatory commercial books or equivalent records showing the commercial particulars and value of goods owned or possessed by the Supplier, together with all supporting documents and invoices. 2. Place identification labels on the goods, or other written, printed, drawn or engraved information accompanying a product, stating its components and the manner of its use, maintenance or storage, in accordance with the laws in force in the State.

Article (9) Judicial Enforcement

General and enforcement provisions

Employees designated by a resolution of the Minister of Justice, in agreement with the Minister or the head of the local judicial authority, as the case may be, shall have the capacity of judicial enforcement officers to establish violations of this Decree-Law, its Executive Regulation and the resolutions issued for its implementation.

Article (10) Powers and Duties of Judicial Enforcement Officers

General and enforcement provisions

1. Judicial enforcement officers may at any time enter commercial premises, warehouses, factories, establishments and all non-residential places to inspect them, examine records and books, seize suspected goods or hold them with the Supplier under the Supplier's responsibility, and take samples for examination and analysis. The Executive Regulation shall prescribe the procedures and time limits for inspection, examination and holding of goods. 2. A judicial enforcement officer shall take the preventive measures necessary to ensure occupational health and safety while performing inspection duties.

Article (11) Prohibitions

General and enforcement provisions

1. It is prohibited to prevent judicial enforcement officers from performing their duties. 2. A Supplier is prohibited from disposing of goods held pending examination before the examination result authorises their release.

Article (12) Application for Release of Goods

General and enforcement provisions

1. A Supplier whose goods have been seized or held may apply to the Competent Court for their release. Within 24 hours after the application, the Court may order release subject to the following conditions: a. The Supplier provides evidence that the goods are perishable or liable to rapid deterioration. b. Samples of the held goods have been taken for examination. c. The Court is satisfied that release is unlikely to endanger public health. 2. Without prejudice to Clause 1, the goods shall be released if the Competent Court does not issue an order confirming the hold within 45 days following the day of seizure; for goods liable to perish or deteriorate rapidly, that period may not exceed 20 days.

Article (13) Closure

General and enforcement provisions

In a case of necessity or urgency, where strong evidence indicates that a Supplier possesses fraudulent, spoiled or counterfeit goods, the Minister, the Minister's delegate, the head of the local authority or that head's delegate may issue a reasoned decision closing the shop or place where the offence occurred. The matter shall be referred to the Competent Court within 10 working days after the decision for confirmation or cancellation of the closure; otherwise the decision shall be deemed never to have existed.

Article (14) Supreme Committee for Combating Commercial Fraud

General and enforcement provisions

A committee named the "Supreme Committee for Combating Commercial Fraud" shall be established under this Decree-Law and shall report to the Minister. Its composition, working system and competences shall be determined by a Cabinet resolution issued upon the Minister's proposal in coordination with the Competent Authorities.

Article (15) Administrative Sanctions Schedule

General and enforcement provisions

A Cabinet resolution, issued upon the Minister's proposal and in coordination with the Competent Authority, shall specify the violations and administrative sanctions for acts contrary to this Decree-Law, its Executive Regulation and implementing resolutions, the authorities empowered to impose sanctions, and the authority responsible for collecting administrative fines.

Article (16) Penalties

Penalties and remedies

Without prejudice to any more severe penalty prescribed by another law, the offences set out in this Decree-Law are punishable by the penalties prescribed herein.

Article (17) Penalty for Specified Violations

Penalties and remedies

Any person who violates Articles 4, 5, 8 or 11 of this Decree-Law shall be punished by imprisonment for up to two years and a fine of not less than AED 5,000 and not more than AED 1,000,000, or by either penalty.

Article (18) Aggravated Penalty

Penalties and remedies

The penalty for the offences referred to in Article 17 is aggravated to imprisonment and a fine of not less than AED 100,000 and not more than AED 2,000,000, or either penalty, in the following cases: 1. The fraud, deception or counterfeiting of goods, or an attempt at it, is accompanied by the use of false or altered scales, measures, gauges, seals, labels or testing equipment, or methods or means that render weighing, measuring or testing of the product inaccurate. 2. The fraudulent, spoiled or counterfeit goods, or the materials used to adulterate them, are harmful to human or animal health and safety. 3. The fraudulent, spoiled or counterfeit goods are medicinal products, agricultural produce or organic food products.

Article (19) Confiscation, Destruction, Publication and Closure

Penalties and remedies

1. Without prejudice to Articles 17 and 18 and the rights of good-faith third parties, the Competent Court shall order the confiscation or destruction of fraudulent, spoiled or counterfeit goods, medicinal products, produce, products, materials and tools used in the offence. A summary of the final conviction shall be published in two local daily newspapers, one in Arabic, or by another means specified by the Court, at the convicted person's expense. 2. The Court may order the closure of the shop or place where the offence occurred for up to six months.

Article (20) Liability of the Person in Effective Management of a Legal Person

Penalties and remedies

1. The person responsible for the effective management of an offending legal person is subject to the same penalty prescribed in Articles 17 and 18 if that person is proved to have known of the offence and failed to take the necessary measures, or if a serious breach of management duties contributed to the offence. 2. That manager is jointly liable with the legal person for payment of fines imposed where the offence was committed by an employee of the legal person in its name or for its benefit.

Article (21) Recidivism

Penalties and remedies

For a repeat offence, the penalty prescribed by this Decree-Law shall be doubled and the shop or place where the offence occurred shall be closed for up to one year. A person is a repeat offender if that person commits a similar offence within five years after the date of a previous final conviction.

Article (22) Settlement

Penalties and remedies

At the offender's request, the Ministry or Competent Authority, as applicable, may settle any act contrary to this Decree-Law, its Executive Regulation or implementing resolutions in return for payment of an amount not less than twice the minimum fine applicable under the administrative sanctions schedule referred to in Article 15. The Executive Regulation shall prescribe the procedures and controls required for settlement.

Article (23) Grievances against Decisions and Appeals

Penalties and remedies

1. An interested person may submit a written grievance to the Minister or head of the Competent Authority, as applicable, against any decision issued under this Decree-Law, its Executive Regulation or implementing resolutions within 15 working days after notification of the contested decision or measure, attaching all supporting documents. The grievance shall be decided within 30 days after submission; the decision on it is final, and no response within that period constitutes rejection. 2. The grievant may appeal a decision rejecting the grievance to the Competent Court within 30 days after notification of the rejection or expiry of the period for deciding the grievance without notification. 3. In all cases, no appeal may be brought before the Competent Court until a grievance has first been made and rejected, or the period referred to in Clause 2 has expired without notification.

Article (24) Repeals

Final provisions

1. Federal Law No. 19 of 2016 Concerning Anti-Commercial Fraud is repealed, as is every provision contrary to or inconsistent with this Decree-Law. 2. Regulations and resolutions issued under Federal Law No. 19 of 2016 remain in force to the extent that they do not conflict with this Decree-Law, until replaced in accordance with this Decree-Law.