Selling fraudulent, spoilt or counterfeit goods in the UAE carries up to two years’ imprisonment and a fine of AED 5,000 to AED 1,000,000, rising to AED 100,000 to AED 2,000,000 where the goods are harmful to health, are medicines, crops or organic food, or where false weights and measures were used. Those penalties come from Federal Decree-Law No. 42 of 2023 Concerning Anti-Commercial Fraud, which replaced Federal Law No. 19 of 2016 and applies including in free zones.

The provision that surprises traders most is Article 6(1): you are not exempted from the penalty even if you prove the customer knew the goods were fake. Selling a knowing buyer a counterfeit is still an offence. This guide covers what counts as commercial fraud, the mandatory recall and destruction at your own expense, the inspection and seizure powers, the automatic release deadlines that work in your favor, the personal liability of whoever actually runs the business, and the grievance route you must use before any court.

What Counts as Commercial Fraud

Article 1 defines commercial fraud as deceiving customers by any means, whether by replacing or changing the goods’ nature, amount, type, price, fundamental features, origin, source or validity, or by providing false or misleading commercial data on the promoted products, or any other matter that leads to deceiving the customer.

The law then separates three categories of goods, and the distinction matters because the obligations attach to all three:

  • Fraudulent goods: goods that have undergone a change causing them to lose some material or moral value, by addition or reduction, or a change in essence, nature, type, properties, shape, elements, measure, size, number, capacity, calibre, origin or source, or that are advertised or promoted in a manner contradicting their reality, or do not conform to the specifications and standards specified in the UAE.
  • Spoilt goods: goods that have become wholly or partly unsuitable for exploitation, use or consumption.
  • Counterfeit goods: goods bearing, without permission, a trademark identical or similar to a legally registered trademark.

Read the fraudulent-goods definition carefully. It reaches ordinary marketing. Advertising a product in a way that contradicts its reality makes it fraudulent goods, as does non-conformity with UAE specifications and standards, with no counterfeiting or tampering required at all.

The law also defines “Provider” broadly: every natural or legal person who imports, exports, re-exports, manufactures, produces, markets, trades, promotes, disposes of, sells, possesses, stores, transports or displays goods, for its own account or for others. A warehouse operator, a logistics provider and a marketplace seller are all providers.

The prohibited acts

Article 4(1) prohibits importing, exporting, producing, manufacturing, displaying, selling, storing, transporting, marketing, trading, promoting, disposing of or possessing counterfeit goods for the purpose of selling, and prohibits attempting any of those acts. Article 4(2) then lists seven categories of violation, which include:

  • Importing fraudulent, spoilt or counterfeit goods with intent to commit commercial fraud, and knowingly exporting, re-exporting, manufacturing, producing, selling, storing or transporting them.
  • Deception, fraud or counterfeiting regarding type, number, amount, measurement, quantity, weight, capacity, calibre, reality, nature, properties, elements, source, origin, composition or expiration date.
  • Possession, personally or through an intermediary, for marketing, trading, promoting or offering for sale.
  • Using utensils, containers, wrappers, packages, labels or publications to prepare such goods for sale.
  • Packing, wrapping, strapping, distributing, storing or transporting them.
  • Possessing them with intent to modify, change or alter them.
  • Describing, advertising or displaying goods in a manner containing false, deceptive or misleading data.

The Customer’s Knowledge Is No Defence

Article 6(1) states that the provider shall not be exempted from the penalty if it proves the customer’s knowledge that the goods are fraudulent, spoilt or counterfeit.

This closes the argument that most counterfeit sellers rely on, that the buyer knew perfectly well what they were getting at that price. In UAE law that is irrelevant to the seller’s liability. The offence protects the market and the trademark system, not just the individual buyer.

Article 6(2) then runs in the opposite direction, and it is unusual. The Executive Regulation may impose an administrative fine on the customer where the fraudulent, spoilt or counterfeit goods, or the materials used in defrauding them, are harmful to the health and safety of humans or animals and it is proven that the customer was aware of this. Knowingly buying dangerous fakes can itself attract a fine.

Separately, Article 7 gives the bona fide customer a direct remedy: the provider is obliged to refund the value, or exchange or replace the goods according to the customer’s wishes, without prejudice to the customer’s right to claim compensation. That sits alongside the general returns and refunds regime covered in our guide to consumer rights in the UAE.

Recall and Destruction, at Your Expense

Article 5(1) obliges the provider, on its own initiative or on the order of the Ministry or the competent authority, to recall fraudulent, spoilt or counterfeit goods from markets and stores, to inform the authority, and to announce the recall in appropriate ways. The authority may then recall, dispose of, destroy or return the goods to their source at the provider’s expense, without prejudice to the penalty.

Article 5(2) removes any doubt about who pays: in all cases the provider must pay any costs or expenses incurred by the authority in relation to the recall, disposal, destruction or return.

Two points deserve emphasis. The recall duty arises of the provider’s own accord, not only on an order, so discovering a problem in your own stock triggers an obligation rather than a choice. And the duty includes announcing the recall publicly, which is a reputational cost the law imposes deliberately.

Article 8 adds two standing obligations. The provider must produce its mandatory commercial books showing the commercial data, value and supporting documents and invoices for goods it owns or possesses whenever requested. And it must place on the goods identification cards or written, printed, drawn or engraved information showing the components of the commodity and how to use, maintain or store it, in accordance with UAE law.

Inspection, Seizure and the Deadlines That Protect You

Under Article 10(1), judicial enforcement officers may enter shops, stores, factories, establishments and any place not intended for residential use at any time, inspect, review records and books, seize suspicious goods or leave them with the provider under its responsibility, and take samples for examination and analysis.

Article 11 prohibits preventing officers from performing their work, and prohibits the provider from disposing of seized goods before the examination results approving them are issued. Both prohibitions carry the Article 17 penalty.

What is less well known is that the law imposes hard deadlines on the authority, and they operate in the provider’s favor:

Situation Deadline and effect
Goods seized or reserved, no confirming court order Goods are released if no order confirming the reservation is issued within 45 days of seizure (Art. 12(2))
Goods subject to rapid destruction or damage That period is reduced to 20 days (Art. 12(2))
Application to release perishable seized goods The court may order release within 24 hours of the request, on three conditions (Art. 12(1))
Administrative closure of the shop Must be put to the court within 10 working days or the closure decision is considered non-existent (Art. 13)

The three conditions for a 24-hour release under Article 12(1) are that the provider submits evidence the goods are subject to rapid destruction or damage, that samples of the reserved goods have been taken for examination, and that the court finds it likely there is no risk to public health from release.

Article 13’s closure power is significant and time-limited. The Minister, the head of the local authority or an authorized representative may close the shop or place by a reasoned decision in cases of necessity or urgency where there is strong evidence of fraudulent, spoilt or counterfeit goods. But the matter must be presented to the competent court within ten working days to confirm or cancel the closure, and if it is not, the decision is considered non-existent. That is a strong procedural protection, and it is easy to miss when a business is scrambling to reopen.

Penalties

Conduct Penalty
Violating Articles 4, 5, 8 or 11 (the prohibited acts, the recall duty, the provider’s obligations, or obstructing inspection) Imprisonment up to 2 years and/or a fine of AED 5,000 to AED 1,000,000 (Art. 17)
Aggravated cases Imprisonment and/or a fine of AED 100,000 to AED 2,000,000 (Art. 18)
Recidivism within 5 years of a final conviction for a similar crime Penalty doubled, plus closure of the shop for up to 1 year (Art. 21)

Article 18 lists three aggravating circumstances: using counterfeit or different weights, measures, seals, labels or examination machines, or methods that make weighing, measuring or examining incorrect; goods or materials harmful to the health and safety of humans or animals; and goods that are medical drugs, agricultural crops or organic food products.

Article 19 makes two consequences mandatory rather than discretionary. The court must order confiscation or destruction of the goods, drugs, crops, products, materials and tools used, and must order a summary of the final conviction published in two local daily newspapers, one of them in Arabic, or by other means the court determines, all at the convicted party’s expense. The court may also order closure of the shop for up to six months.

Personal liability for whoever actually runs the business

Article 20(1) punishes the person responsible for the actual management of the violating legal person with the same penalty, where it is proven that they were aware of the crime and did not take the necessary measures, or where their serious breach of management duties contributed to it.

Article 20(2) adds joint liability: that person is jointly liable with the company for paying the fines where the violation was committed by an employee in the company’s name or for its benefit. Incorporating does not put the manager behind a shield, and the trigger is awareness plus inaction, or a serious breach of duty, rather than personal participation in the fraud.

Reconciliation and the Grievance You Cannot Skip

Article 22 allows the Ministry or the competent authority to conduct reconciliation for violations at the violator’s request, in exchange for paying not less than twice the minimum fine the violator would be required to pay under the administrative penalties regulation. Reconciliation is therefore available but deliberately priced above the floor.

Article 23 sets a mandatory grievance route. Any interested party may submit a written grievance to the Minister or the head of the competent authority against any decision issued under the decree-law, within 15 working days of being notified. The grievance must be decided within 30 days, and that decision is final. Silence for 30 days counts as rejection.

The grievant may then appeal the rejection to the competent court within 30 working days of notification, or of the expiry of the decision period without notification. Article 23(3) closes it off: in all cases it is not permissible to appeal before the court except after the decision has been grieved against and the grievance rejected, or the deadline has passed without notification. Going straight to court gets the case dismissed on admissibility, the same structure that governs trademark and industrial property decisions at the same Ministry.

How This Fits With the Rest of the Regime

Commercial fraud overlaps with several other regimes, and knowing which one you are in decides the remedy:

  • Trademark law gives the rights holder private remedies, customs seizure and its own criminal penalties for counterfeiting. The commercial fraud law targets the trade in the goods regardless of who owns the mark, and a customer or competitor can report it without being the rights holder. See trademark registration in the UAE.
  • Customs is where most counterfeit goods are first stopped, and holds there run on their own short deadlines, covered in our guide to UAE customs duty and import rules.
  • Consumer protection handles the individual buyer’s refund and complaint, while this decree-law handles the trader’s liability. Article 7 bridges them by giving the bona fide customer a statutory refund, exchange or replacement right.
  • Free zones are not outside it. Article 3 applies the decree-law to anyone who commits an act of commercial fraud in the UAE, including free zones, which removes a common assumption among free zone traders.

Article 14 establishes a Supreme Committee for Anti-Commercial Fraud affiliated with the Minister, with its formation, work system and jurisdiction to be set by Cabinet resolution. Article 15 leaves the schedule of violations and administrative sanctions, and the authorities that impose and collect them, to a separate Cabinet resolution.

Practical Compliance Points for Traders

  • Your marketing is in scope. Describing, advertising or displaying goods with false, deceptive or misleading data is an Article 4(2) violation on its own. So is non-conformity with UAE specifications, which makes otherwise genuine goods “fraudulent goods” by definition.
  • Expiry dates are named expressly. Article 4(2)(b) lists expiration date alongside origin and composition, so date management is a criminal compliance issue, not just a stock control one.
  • Label properly. Article 8(2) requires information showing components and how to use, maintain or store the product. Missing labelling is an Article 17 offence in its own right.
  • Keep invoices retrievable. Article 8(1) requires production of commercial books, values and supporting invoices on request. A clean supply chain paper trail is the practical defence to an allegation that you knowingly dealt in fakes.
  • Diarize the deadlines if goods are seized. 24 hours for a perishables release application, 45 days (or 20 for perishables) before goods must be released absent a confirming order, and 10 working days before an administrative closure lapses.
  • Managers should document their interventions. Article 20 turns on awareness plus failure to take necessary measures. Evidence of the measures taken is what breaks the chain.

Frequently Asked Questions

What is the penalty for selling counterfeit goods in the UAE?

Under Article 17 of Federal Decree-Law No. 42 of 2023, imprisonment for up to two years and/or a fine of AED 5,000 to AED 1,000,000. Article 18 raises it to imprisonment and/or a fine of AED 100,000 to AED 2,000,000 where false weights, measures, seals, labels or examination machines were used, where the goods or materials are harmful to human or animal health and safety, or where the goods are medical drugs, agricultural crops or organic food products.

Is it a defence that the customer knew the goods were fake?

No. Article 6(1) states expressly that the provider is not exempted from the penalty if it proves the customer’s knowledge that the goods are fraudulent, spoilt or counterfeit. Article 6(2) works the other way: the Executive Regulation may impose an administrative fine on the customer where the goods or the materials used are harmful to human or animal health and safety and the customer is proven to have been aware of that.

Does the UAE commercial fraud law apply in free zones?

Yes. Article 3 states that the decree-law applies to anyone who commits an act of commercial fraud in the State, including free zones. There is no free zone carve-out, so importers, warehousers, marketplace sellers and re-exporters operating from a zone are within its scope.

What counts as fraudulent goods in the UAE?

Any goods that have undergone a change causing them to lose material or moral value, by addition or reduction, or a change in essence, nature, type, properties, shape, elements, measure, size, number, capacity, calibre, origin or source. The definition also expressly covers goods advertised or promoted in a manner that contradicts their reality, and goods not conforming to the specifications and standards specified in the UAE, so misleading marketing and non-conformity are enough without any tampering.

Do I have to recall goods, and who pays for the destruction?

You do, and you pay. Article 5(1) obliges the provider, of its own accord or on the order of the Ministry or the competent authority, to recall fraudulent, spoilt or counterfeit goods from markets and stores, to inform the authority and to announce the recall appropriately. The authority may recall, dispose of, destroy or return the goods to their source at the provider’s expense, and Article 5(2) obliges the provider to pay any costs or expenses the authority incurs in doing so.

How long can UAE authorities hold seized goods?

Article 12(2) provides that the goods shall be released if no order confirming the reservation is issued by the competent court within 45 days following the day of seizure, reduced to 20 days for goods subject to rapid destruction or damage. Separately, Article 12(1) lets the provider apply to the court for release of seized goods, and the court may order it within 24 hours where the goods are subject to rapid destruction, samples have been taken, and the court finds no likely risk to public health.

Can the authorities close my shop for commercial fraud?

Yes, but with a hard deadline. Article 13 permits closure by a reasoned decision of the Minister, the head of the local authority or an authorized representative, in cases of necessity or urgency with strong evidence of fraudulent, spoilt or counterfeit goods. The matter must be presented to the competent court within ten working days to confirm or cancel it, failing which the decision is considered non-existent. A court may separately order closure for up to six months on conviction, or up to one year on recidivism.

Can a company manager be personally punished for commercial fraud?

Yes. Article 20(1) punishes the person responsible for the actual management of the violating legal person with the same penalty, where it is proven they were aware of the crime and did not take the necessary measures, or where their serious breach of management duties contributed to its occurrence. Article 20(2) makes that person jointly liable with the company for the fines where the violation was committed by an employee in the company’s name or for its benefit.

Can I settle a commercial fraud case in the UAE?

Reconciliation is available under Article 22. The Ministry or the competent authority may conduct reconciliation at the violator’s request in exchange for paying an amount not less than twice the minimum fine the violator would be required to pay under the administrative penalties regulation. The Executive Regulation determines the procedures and controls.

Can I go straight to court against a commercial fraud decision?

No. Article 23 requires a written grievance to the Minister or the head of the competent authority within 15 working days of notification, decided within 30 days, with silence treated as rejection. Only then may you appeal to the competent court, within 30 working days. Article 23(3) states that in all cases an appeal before the court is not permissible except after the decision has been grieved against and the grievance rejected, or the deadline has passed without notification.

Official Sources

Information is current as of August 2026. Every article number, definition, deadline and penalty above was read from the official English text of Federal Decree-Law No. 42 of 2023 Concerning Anti-Commercial Fraud, which was issued on 28 September 2023, entered into force two months after publication in the Official Gazette, and repealed Federal Law No. 19 of 2016. Four limitations are stated rather than smoothed over. The Executive Regulation governs a great deal of operative detail that the decree-law delegates to it, including the procedures, controls and periods for recall and destruction, the inspection and seizure procedures, the cases in which an administrative fine may be imposed on a customer, and the reconciliation procedures; its consolidated text was not retrieved for this guide, so those points are given as the decree-law expresses them. Article 15 leaves the schedule of violations and administrative sanctions to a separate Cabinet resolution, so no administrative fine figure is quoted here and only the statutory criminal penalties are given. Article 14 leaves the Supreme Committee’s formation, work system and jurisdiction to a Cabinet resolution that was not retrieved. And enforcement is shared between the Ministry and each emirate’s competent authority, so the practical route and contact point differ by emirate. The Arabic text of UAE legislation prevails in case of any conflict with an English translation. This is general information, not legal advice.