MIO Law Firm Blog

How To Protect Yourself From Scams In The UAE (Anti-Fraud Law)

Posted by MIO Law Firm on Dec 20, 2017 3:23:55 PM

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UAE Federal Law No. (19) for the year 2016 In respect of Combating Commercial Fraud

The new anti-fraud Law No. 19 of 2016 designed to restrain counterfeit goods and other anti-commercial instances of fraud has come into force in the UAE. The new legislation replaces Federal Law No. 4 of 1979 in countering the Suppression of Fraud and Deception in Commercial Transactions.


As the United Arab Emirates’ economy continues to evolve and mature, it has experienced a steady expansion in both the complexity and volume of commercial transactions.


 What are counterfeit goods:

The New Law defines counterfeit goods as:

“the goods that bear, without permission, a trademark identical to or similar to the legally registered trademark.”

Accordingly, based on this definition under the New Law, the brand owners are now permitted to take action in respect of goods bearing similar and identical marks to their own registered trademark.


Common Scams In The UAE

The Dubai Financial Services Authority (DFSA) has a dedicated section on their website covering the latest scams that might affect the DIFC and investors.


Currently, typical scams range from unknown people contacting you by phone, email or fax and informing you of an amazing investment opportunity. A variation of this scam is when an unknown person calls or emails you to inform you that you have won an amazing lottery or prize. After you respond, you will gradually be told that you have to pay a small registration fee or transfer mobile credit to another mobile.


Another scam is the fake bank email or phishing scam. While this scam takes many forms, the most common are when you receive an email claiming to be from a bank or credit card company informing you that due to security, maintenance, irregularities, and upgrades you need to provide account details, PIN numbers and passwords. You will then be directed to a fake website which looks identical to your bank’s website.


Moreover, since the used car market is huge in the UAE, therefore car scams are widespread. Undoubtedly, when you buy a second-hand car in order to save several thousands of dirhams but not being careful, you can be affected negatively.


 The Higher Committee for Anti-Commercial Fraud

The new Law No. 19 of 2016 established the Higher Committee for Anti-Commercial Fraud a body tasked with combating commercial fraud in the UAE. The legislation also created a sub-committee at Emirate level to implement the functions of the Higher Committee.


With the adoption of this law, the Higher Committee is now charged with proposing policies to fight commercial fraud on a national level and is also authorized to address common challenges faced by brand owners in the UAE.


The Higher Committee responsibilities include:

  • To propose strategies and policies to combat commercial fraud
  • To study reports of commercial fraud referred to it by Emirate level authorities and take the necessary decisions
  • To study obstacles facing law enforcement and propose new procedural mechanisms.
  • Delivering the working system of the subcommittees.
Article 6 identifies tasks for the Emirate level sub-committees. These include:
  • Considering requests for conciliation by those who violate the law
  • Putting infringers on notice
  • Ordering temporary closure of offending establishments
  • Administering destruction operations and
  • Recycling or re-exporting infringing goods.


Law No. 19 of 2016 Application And Enforcement

Article 2 of Law No. 19 states:


“provisions of this law will be applied to anyone who commits an act of commercial fraud, and the free zones are not exempted from the provisions of this law”.


The law classifies the act of selling, displaying, and possessing counterfeit goods as an act of commercial fraud. The importation, exportation, re-exportation, manufacturing, storage, rental, marketing, selling are also considered acts of commercial fraud.


Great Information Disclosure Provisions

Under the provisions of Article 4 of Law No. 19, a trader is obliged to submit to the competent authority all commercial books and ledgers, detailing trade data for goods either owned or in the trader’s possession, in addition to information on the goods value. A trader is required to provide all supporting documentation and invoices upon request.


This legislation is designed to unmask the supply chain relating to the counterfeit business. Article 4 may also assist in bringing civil claims against IP infringers. This new ability to obtain disclosure is anticipated to generate more claims while allowing victims to be compensated.


A New Take On Penalties

Law No. 19 also includes new penalties designed to increase in the UAE’s fight against fraud and counterfeit goods. Article 12 of Law No. 19 penalizes anyone who commits a commercial fraud with a maximum jail term of two years and/or a fine ranging between AED 50,000 and AED 250,000.


The exception to the new ceiling of an AED 250,000 to the fine imposed for crimes negatively affecting human health (pharmaceuticals, food or organic food products). These are punishable by a fine of up to 1 million dirhams and a two-year jail term.


Article 18 also gives courts the power to close offending establishments for a period not exceeding 6 months. This closure is in addition to other penalties, which may be imposed by the legislator.


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Topics: Anti-fraud Law