United Arab Emirates: The UAE Anti Fraud Law

Last Updated: 16 March 2018
Article by M Kaul
Most Read Contributor in United Arab Emirates, July 2019

Anti Fraud Law in the UAE 

The United Arab Emirates recently enacted Federal Law Number 19 of 2016 concerning Combating Commercial Fraud (the Anti-Fraud Law or the Law) has replaced the erstwhile Federal Law Number 4 of 1979 dealing with the Concealment of Fraud and Deception in Transactions commercial in nature (the Old Anti-Fraud Law).

The much-anticipated Anti-Fraud Law has been in the news since the draft of the aforesaid law was introduced and circulated in the year 2013. As the United Arab Emirates grew into a commercial hub for trade and business between different jurisdictions, the requirements of a stricter regime and policies became increasingly essential to safeguard and protect the market from fake and counterfeit goods. As a result, the Anti-Fraud Law purports to regulate the framework and robust more policies towards a legal regime necessary to curb and combat fraudulent commercial activities to provide an efficient mechanism to counter infringement of intellectual property.

The Definitions

The Anti-Fraud Law sets out more extensive definitions, explicit penalties and broadens the scope to deal with commercial frauds, mainly dealing with intellectual property.

The definition of Commercial Fraud states that 'Deception of one of the customers by any means whether by changing or altering the goods or their amount or nature or price or their material description or origin or source or fitness or any other matter related thereto, or presenting untrue or misleading trading information on the promoted products, which include fraud, limitation and cheating by doing service which does not conform with the applicable laws or may include false and misleading statement.'

Importantly, the Anti-Fraud Law explicitly sets out the definition of Counterfeit Goods as 'the goods which bear, without permission, a trademark which is identical or similar to a legally registered trademark.' The preceding definition significantly extends the scope of the Law by ruling out any ambiguity relating to nature of goods falling under the ambit of this Law, in as much as, the Law shall cover unauthorized use of goods and products with identical as well as deceptively similar or lookalike trademarks.

Also, the Law also provides for more clarity by clearly defining and categorizing goods into Goods, Fraudulent Goods, Corrupt Goods, and Counterfeit Goods.

Important Provisions

A noteworthy feature is the applicability of this Law within UAE. Article 2 of the Law explicitly provides for the provisions of the Anti-Fraud Law applies to whosoever commits the very act of commercial fraud including the free zones in the UAE. In most scenarios, the discrepancy in the procedures and regulations between mainland and free zones has to lead to uncertainties in the enforcement of rights and entitlements. However, this Law addresses the concerns and extends its scope explicitly to the free zones.

Pertinently, Article 2 further explains what falls under the purview of commercial fraud and includes Importation, export, re-exportation, manufacture, sale, offer for sale, possession with the intent to sell, storage, rent, marketing or circulation/trading of fraudulent, corrupt or counterfeit goods. Importantly, the expansive definition mentioned above regulates the manner in which possession, importation, and re-exportation undertaken in the UAE including the free zones.

Further, the law also provides recourse towards the use and possession of corrupt and fraudulent good as even counterfeit goods. Article 3 of the Law among other things ensures that regardless of the criminal liability on the offender, the relevant ministry will issue an order to import the corrupt of fraudulent goods to their source within a stipulated period. However, if the importer failed to abide by the order passed and did not return the goods to the source, the relevant authority also has the right to destroy the products or will give away the permission for usage of goods for any other appropriate purpose. The law further mentions that the usage of counterfeit goods should be in accordance with the rules and regulations outlined in the law.

In the manner, as provided aforesaid, the law makes a distinction in the way in which corrupt/fraudulent goods and counterfeit goods may be dealt with.

Another provision of the Law which is step up towards adequate safeguard mechanism is Article 4 of the Law which imposes an obligation upon the traders to provide all necessary and relevant information including trade books and financial statements concerning the goods owned and possessed including to any evidence towards details and documents to that effect.

Articles 5 to 8 of the Anti-Fraud Law also provides for a regulatory framework to be developed for this Law. In this regard, The Ministry of Economy shall form a Higher Committee which will inter alia be responsible for proposing strategies and policies, identify obstacles and advise on a mechanism to tackles issues, to carry out necessary activities assigned by the Ministry of Economy. Having a federal committee in this manner shall ensure integrated policies and mechanism in place to safeguard the interest of bona fide traders and brand owners. Article 6 further provides for establishment of sub-committees at each Emirate level and shall be assigned with the task of issuing warnings to the traders and businesses violating the Law, close down traders and businesses in violation of the Law, for a maximum of 2 years, follow up on the destruction or returning to source of the fraudulent/corrupt or counterfeit goods and provide the Ministry with periodical reports regarding its day to day activates in relation to the Law.

Role of the Committee

Importantly, the Anti-Fraud Law confers the sub-committee with the responsibility of undertaking matters of conciliation and settlements concerning violations of the Law. In this regard, Article 8 provides that upon a request for conciliation by the offender, the sub-committee may set an amount of fine payable in lieu of the conciliation which shall not be less than twice the minimum limit of fine prescribed under the Law. In the event the offender rejects/refuses the conciliation, the offense shall be referred to the Public Prosecutor for further prosecution. The Law provides limited opportunities to appeal against the decision of the sub-committee, particularly in the case where the conciliation is rejected by the sub-committee or against the decision of the sub-committee to close down a business. In both the situations as mentioned above, the businesses can object to the closing down an appeal against the rejection of conciliation before the Higher Committee.

It is understood that the Law provides that a set of implementing regulations shall prescribe relating to the manner and guidelines in which the said Law is to be implemented, for instance, setting out the process of the conciliation or determining the types of warnings that may be issued by the sub-committee. However, such implementing regulations are yet to be published.

Penalties under the Law

The essential provisions prescribed under the Law in relation to heavy penalties imposed on violators, which is a welcome change from the Old Anti-Fraud Law, is necessary to deter offenders and curb commercial frauds. The Old Anti-Fraud Law provided for a maximum penalty of jail term for two years and a maximum fine of AED10,000 (UAE Dirham ten thousand) for cheating a customer by delivering goods that are different to what was ordered. In contrast, Article 12 under the Law imposes a harsher penalty for the violators such as an imprisonment of almost two (2) years or some fine which ranges from AED 50,000 (UAE Dirham fifty thousand) to AED 250,000 (UAE Dirham two hundred fifty thousand) or both of the above. In addition, anyone who attempts to commit a commercial fraud under the Law shall face a punishment of imprisonment of up to 1 (one) year or a fine of an amount between AED10, 000 (UAE Dirham ten thousand) to AED100,000 (UAE dirham one hundred thousand), or both of the above.

As an exception, Article 14 imposes a higher penalty of imprisonment for a period of up to two years or a fine of AED 250,000 (UAE Dirham two hundred fifty thousand) to AED 1,000,000 (UAE Dirham one million) or both, where the fraud or offense is in relation to human foods, animal foods, medical drugs, agricultural crops or organic products. Additionally, in case of conviction in the offenses as listed in Article 14 above, the court shall order close down of the accused for up to six months, in addition to the prescribed punishment. In addition, in the event of repeating violation for the aforesaid offenses, the court shall be at a liberty to order more severe punishment or cancellation of the license.

It is pertinent to note that the Law imposes an astringent obligation upon the offender/violator of the Law, in as much as, Article 16 provides that the trader shall not be exempted from any punishment prescribed under the Law, even where the buyer is aware that the goods are fraudulent, corrupt or counterfeit.


The new Anti-Fraud Law is another progressive legislation, which is in tandem with the recently changing legal climate in UAE. This Law has made positive advancements towards formulating a robust legal framework to safeguard and protect the interest of registered brand owners and bona fide businesses. While the Anti-Fraud Law is indeed a welcome change, it still is at a nascent stage, where the success of the framework shall be heavily dependent upon the smooth operation of the Higher Committee and sub-committee and the manner in which the administrative processes assigned to them are carried out. Importantly, the regulatory framework and policies will be clearer once the implementing regulations are enacted. In any event, the heavy penalties provided for shall act as a deterrent against commercial frauds and crimes and shall bridge the lacuna created by the Old Anti-Fraud Law towards an effective measure to combat intellectual property crimes and other commercial frauds.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions