The United Arab Emirates (the UAE) has rewritten its commercial fraud regulations for the first time since 2020. Cabinet Decision No. 107 of 2026 (the Resolution), issued on July 13, 2026, took effect on August 12, 2026. It sets out how the authorities detect commercial fraud, the procedures for withdrawing and disposing of goods, and the remedies available to a business. The Resolution is the implementing regulation for Federal Decree-Law No. 42 of 2023 on Anti-Commercial Fraud (the Federal Law), replacing Cabinet Decision No. 11 of 2020, which implemented the repealed Federal Law No. 19 of 2016 on Combating Commercial Fraud. The Federal Law and the Resolution apply throughout the UAE, including the free zones, and reach every stage of the supply chain, from importers and manufacturers to distributors, traders, storage providers and transporters.
The Federal Law and the Resolution serve different functions. The Federal Law defines commercial fraud, whereas the Resolution addresses the regulatory and operational aspects, identifying the competent authority, the steps to be taken and the applicable time limits.
Jurisdiction
The Resolution divides regulatory responsibility. The competent authority in the relevant Emirate has the primary jurisdiction. The Ministry of Economy and Tourism (the MOET) may take over a matter in cases of inaction by the competent authority for 10 working days, distribution of the goods across more than one Emirate, serious risk to human or animal health or to the environment, or a matter that requires measures to be taken at the state level.
For a business, this allocation determines which authority it is answerable to, which imposes any penalty, and which decides any grievance.
Powers of Inspection
The Resolution grants powers of inspection to judicial officers. For conducting investigation, they have the authority to enter and inspect commercial premises, warehouses, and other non-residential locations. They may also access devices, networks, electronic media, information systems and computer programs.
Under the Resolution, inspections are expected to conclude within 5 working days, and sample testing within 15 working days. The time period for perishable items is determined by the competent accredited laboratories. Where fraud is suspected, the goods may be detained at the supplier’s premises, and the supplier will bear the cost of testing, irrespective of the result.
Release of Goods
Where the testing establishes that the goods are not adulterated, defective or counterfeit, the judicial officer must record that finding, lift the custody, release the goods immediately and notify the supplier. Those steps must be taken within 3 working days from the date the results are issued. The supplier is nonetheless not entitled to any payment or compensation for the value of the samples taken or for the costs of testing and analysis. The samples may be returned to the supplier where possible.
Withdrawal of Goods
Where the testing confirms that the goods are adulterated, defective or counterfeit, the judicial officer seizes them and notify the supplier to cease sale immediately. The supplier has 24 hours to withdraw the goods from markets and warehouses and to notify every point of sale and every entity supplied. The points of sale and entities have a further 24-hour window to withdraw. The competent authority must be provided with evidence demonstrating that the notification, withdrawal and recovery procedures have been carried out. The supplier must publish a notice within 48 hours, in Arabic and English, covering the trademark, product description, country of origin, refund process and return arrangements. The supplier must also submit a written report on the withdrawal within 5 working days of the date on which it commenced.
The costs of the withdrawal are borne by the supplier. Where the supplier does not act in time, the competent authority must, within the following 48 hours, withdraw the goods and recover the costs from the supplier.
Disposal of Goods
Withdrawal is limited to the removal of goods from the market, and does not determine what happens to them. Under the Resolution the goods may be returned to source, used, recycled or destroyed. Requests for use, recycling or destruction are considered by a committee before the matter is referred to the competent court. Once proceedings have been referred to the court, or a judgment has been issued, the court is competent to consider such requests.
Where no destruction order has been issued, the supplier must return the goods to the country of origin or export within 30 days of seizure, at its own expense, provided they are suitable for re-export and pose no risk to health or the environment. If the supplier does not do so, the authorities will dispose of or return them at the supplier’s cost, and penalties may follow. As an alternative, MOET or the competent authority may put the goods to use or recycle them, subject to intellectual property rights.
The destruction of goods requires a judgment of the competent court or a decision of a committee, and must be implemented within 15 working days of that judgment or decision. The supplier will bear the cost of destruction, including where destruction takes place outside the UAE.
Administrative Fine on a Trader
The Resolution also extends liability to traders down the supply chain. An administrative fine, as set out in the Federal Law, may be imposed on a trader who knew, or ought to have known by virtue of their profession, trade or expertise, that the goods or materials used were harmful. Liability extends where the trader returns goods to the market after they have been proved unfit for use; purchases such goods intending to place them into the market for unlawful gain; promotes such goods; or provides misleading information about the nature, quality, origin or composition of such goods.
The practical effect of the administrative fine is to give distributors and retailers a reason to inquire about the goods, rather than rely on the supplier.
Settlement and Grievance
The Resolution permits certain violations to be settled. Settlement is available only where the violation resulted from error or negligence rather than bad faith or intent. The violator must have rectified the causes of the violation. Settlement is also barred where the violator was fined under the Federal Law within the 12 months preceding the violation. An application must be submitted within 10 working days of notification and determined within 15 working days. If no decision is issued in that period, the application is deemed rejected. The violator must be aware that a settlement does not extinguish civil liability, nor does it mean that no violation occurred.
A decision rejecting a settlement application may be challenged by a grievance filed with the same authority within 7 working days from notification of the rejection. The grievance must be decided within 10 working days from its submission, and failure to decide within that period is deemed a rejection.
Conclusion
The Resolution sets fixed deadlines at every stage and allocates costs. The obligations are not unreasonable, but meeting them depends on operational capability that has to exist before a finding is made. A business that cannot contact its distribution list within hours, has no recall provisions in its supply contracts, or cannot show from its records what was sold and to whom will struggle to comply.
Citations
Cabinet Decision No. 11 of 2020 on the Implementing Regulation of Federal Law No. 19 of 2016 on Combating Commercial Fraud (repealed)
https://uaelegislation.gov.ae/en/legislations/1408
Cabinet Decision No. 107 of 2026 on the Implementing Regulation of Federal Decree-Law No. 42 of 2023 on Combating Commercial Fraud
https://uaelegislation.gov.ae/en/legislations/4544
Federal Decree-Law No. 42 of 2023 on Combating Commercial Fraud
https://uaelegislation.gov.ae/en/legislations/2151
Federal Law No. 19 of 2016 on Combating Commercial Fraud (repealed)
https://uaelegislation.gov.ae/en/legislations/1036
Research and drafting assisted by Saad Mahmud, Associate, MAR LAW Global.
