News & insights

UAE: Amended Draft of the New Anti-Commercial Fraud Law

April 8, 2014

The UAE Federal National Council had recently approved the draft Anti-Commercial Fraud Law after introducing some amendments to the original version that was first submitted in early 2013. The said amendments address potential concerns expressed by brand owners regarding namely the re-exportation of counterfeit products.

The previous version of the draft law included a strict definition of Counterfeit Products delimiting the same to “Products which bear, without permission, a trademark which is identical to registered trademark”. Accordingly, the new version of the draft law expands the scope of one of its key provisions to include similar trademarks within the coverage of the proposed law. Counterfeit Products are thus defined as “Products that bear, without permission, a trademark identical or similar to a registered trademark”.

Another major concern is further addressed by the new version of the draft law regarding the long debated issue of re-exportation of counterfeit products. Under article 5 of the previous text, authorities were empowered to require importers to return spoiled, fraudulent and counterfeit products to their source. The approach adopted by the said article was not adequately coherent with the remaining provisions of the proposed law which have set high standards of anti-counterfeiting measures. Put differently, this approach does not reflect the leading image of the UAE in combating counterfeit products as it would result merely in displacing the problem to another jurisdiction. Accordingly, the said concerns were answered by the new version of the draft law which excluded counterfeit products from being re-exported.

The new provisions in this respect are expressed in article 5 which reads as follows:

Without prejudice to criminal liability, the relevant authority may issue a decision ordering the importer to return Fraudulent or Spoiled products to their source during a specific period. If the importer does not return them to the source within this period, the relevant authority may order their destruction, or allow their use for any other eligible purpose, or it may return them to their source, Counterfeit products will be destroyed, all of which is subject to the rules and regulations set out in the implementing regulation of this law.

The forgoing amendment will be certainly appreciated by brand owners and would certainly confirm UAE position as a pioneer in protecting Intellectual Property Rights.

The mechanism set forth in the previous version of the draft law remained substantially unaltered and positive in at least two major respects:

– The establishment of a single centralized body to combat counterfeit goods in the UAE, “The Higher Committee for Combating Commercial Fraud”, assisted by subcommittees on an Emirate level.

– The introduction of hefty penalties for dealing in counterfeit products.

The new draft law is certainly considered a positive enhancement of the existing enforcement framework in the UAE especially after attending the concerns stressed by previous reviews and studies.