The new regulations would replace an outdated, 35-year-old law and offer consumer protection.
New anti-fraud bill could be in force by next year
ABU DHABI // A Federal National Council committee has finished its proposed amendments to an anti-fraud bill that would replace a 35-year-old federal law.
The bill, likely to come into effect within the next year, will now cover the whole country and its free-zones, and combat service, commercial and contractor fraud.
Ali Al Nuaimi (Ajman), a member of the committee that made the amendments, said even though commercial fraud was minimal, it was still an issue requiring firmer legislation to replace the outdated 1979 law.
Fraud in the UAE, he said, was mainly focused on counterfeit goods, including bags, toys, clothes, electronics and car parts, with occasional cases involving fake food and medication.
During committee meetings, the seven council members also added service fraud to the law, to guarantee that consumers would not be tricked or cheated of services they were promised and paid for.
Contractors will also be subject to the law if they fail to meet contract specifications.
“It was the committee’s idea to add this,” Mr Al Nuaimi said. “Because there were many cases of people who faced fraud through building contractors. Also with decor, including homes and shops. With this law anything that needs a contractor will be covered.
“The contractor will not have the luxury to do what he pleases without a customer’s consent. Even wedding planners who do not deliver what has been agreed upon. It all falls under contractor fraud.”
Mr Al Nuaimi said with these additions to the law, the country’s ranking in the global competitiveness index was likely to jump. He added that the changes were crucial at a time when the UAE was gearing up for further construction.
And even though the law, as it came from the Cabinet, stated that it would cover the whole country, the committee insisted on adding a line that explicitly states free zones are also subject to the law.
“We wanted to be more specific because sometimes after laws are passed, they come and say it does not concern us,” he said.
“In the future anything to do with fraud, counterfeits, fakes, should not come in to the UAE. If they do come in even to the free zones or even for re-export, it would be a crime. We do not want to re-export fake items. it ruins the image of the UAE.”
Mr Al Nuaimi said anyone selling such items, including people who have been in place for years at places like Dragon Mart, would need to cease their businesses once the law was ratified.
Punishments for the new law are far greater than those called for in the 1979 law.
“People did care for the previous law, but with this law it will stop a lot of sales and trading in these products,” he said. “We don’t want these products in the UAE. We also don’t want these practices to burden luxury brand owners’ businesses.”
He said it did not matter if the consumer was aware the products were fake, the salesperson would still be liable.
Those breaking the law will be subject to two years in prison and/or a fine between Dh50,000 and Dh250,000.
While the current law allows for imprisonment, the fines are substantially lower.
Those who commit commercial fraud in human or animal food products or medication could face the same prison term and up to Dh1 million in fines with the new law, up from the previous Dh10,000 fine.
The new bill also punishes establishments that advertise bogus prizes and those with unclear product descriptions on items for sale.
“We expect with this law, commercial fraud will end,” Mr Al Nuaimi said.
The law will now be taken to the 40-member council for a public debate in the presence of the Minister of Economy, Sultan Al Mansouri.
Once passed by the council, it will be referred back to the Cabinet to give to the President, Sheikh Khalifa. After Sheikh Khalifa approves the law, it will be published in the Official Gazette and become effective immediately.