According to the provisions of Federal Decree-Law No. (42) of 2023 on Anti Commercial Fraud,

Commercial fraud is one of the most serious crimes threatening the national economy. It leads to a loss of consumer confidence in the goods they purchase, making them victims of the greed of fraudsters who deceive them with goods that do not meet the required specifications and whose quality is disproportionate to the price charged by these professional fraudsters, who do not hesitate to exert every effort to increase their wealth at the expense of their victims.

Recognizing the seriousness of this crime and keen to protect public trust, the UAE legislator issued Federal Decree-Law No. (42) of 2023 on Anti- Commercial Fraud, which repealed Federal Law No. (19) of 2016 on Anti Commercial Fraud. This new law includes a number of strict provisions to effectively combat commercial fraud. The legislator clarified that the intended objectives behind issuing Decree No. (42) are as follows:

1- Combating the counterfeiting of original goods and commercial fraud in all its forms and types.

2- Establishing mechanisms, controls, and procedures to combat commercial fraud with the aim of preventing trade in counterfeit, adulterated, and substandard goods.

3- Creating a legal and encouraging business environment that protects intellectual property rights.

The UAE legislator, in Article 1 of Decree-Law No. 42 mentioned above, defined commercial fraud as: “Deceiving customers by any means, whether by replacing or changing the commodities’ nature, amount, type, price, fundamental features, origin, source, or validity, or providing false or misleading commercial data on the promoted products, or any other matter related thereto that leads to deceiving the customer..” The legislator also defined adulterated goods as: “Any piece of goods that has undergone a change that has caused it to lose some of its material or moral value, whether by addition or decrease, or change in essence, nature, type, properties, shape, elements, measure, size, number, capacity, caliber, origin, or source, or advertising or promoting it in a manner that contradicts its reality, or not conforming to the specifications and standards specified in the State..” Furthermore, the legislator defined counterfeit and spoiled goods. It is noteworthy that the legislator has broadened the cases classified as commercial fraud, demonstrating a commitment to… In the interest of consumers and to enhance public trust.

Article (17) of the aforementioned Decree-Law punishes commercial fraud with imprisonment for a period not exceeding two (2) years and a fine of not less than five thousand (5,000) dirhams and not more than one million (1,000,000) dirhams, or one of these two penalties. The legislator also increased the penalty for commercial fraud if the act of fraud, deception, or counterfeiting of goods is accompanied by the use of counterfeit or altered scales, measures, weights, seals, labels, or testing equipment, or by the use of methods and means that render the weighing, measuring, or testing of the product inaccurate, or if the counterfeit goods pertain to medical drugs or are harmful to human health.

We note from the above that the severe penalties imposed by the legislator on the crime of commercial fraud are one of the strong reasons that deter anyone who dares to commit this crime, which spreads an atmosphere of trust and reassurance among the dealers, which is reflected positively on trade and on the national economy in general.

Dr. Ghassan Arnous

Consultant – Zayed Alshamsi Advocates and Legal Consultant