The Defining Hour for the UAE Markets: How Does UAE Cabinet Resolution No. (107) of 2026 Redraw the Rules of Trade and Compliance?

A Legal Analysis and Comprehensive Narrative of the Executive Regulation of the Commercial Fraud Law, issued pursuant to Federal Decree-Law No. (42) of 2023

1. Immediate Enforcement and Regulatory Control: Markets Without Grey Areas

Compliance in the UAE market is no longer a routine administrative exercise. Under the new Executive Regulation of the Commercial Fraud Law (Cabinet Resolution No. 107 of 2026), compliance has become a race against time, where every minute and every hour matters.

The Regulation establishes an integrated framework between federal and local authorities to eliminate procedural gaps. Local authorities are required to take action within ten (10) working days from the date they are notified by the Ministry of Economy and Tourism of a suspected product. Failing such action, the Ministry is empowered to exercise direct nationwide withdrawal powers, particularly where the goods are distributed across more than one emirate or pose risks to public health or the environment.

At the same time, judicial officers are granted broad enforcement powers to inspect commercial premises and digital platforms, seize samples within five (5) working days, and refer them to accredited laboratories for testing within a period not exceeding fifteen (15) working days. All testing costs are borne entirely by the trader, who is not entitled to compensation for the seized samples. Conversely, where laboratory results confirm that the goods are compliant, the competent authorities must release them within three (3) working days from the issuance of the test results.

2. Product Recalls and Liability of Market Participants: The 24-Hour Countdown

Once commercial fraud or counterfeiting is established, the Regulation places the commercial establishment under an exceptionally strict timeline. The trader must immediately cease dealing in the products, initiate their withdrawal from the market, and notify all sales outlets within twenty-four (24) hours.

Within forty-eight (48) hours, the trader must publish an official recall announcement in both Arabic and English through the media, with a minimum advertisement size of 15 × 15 cm, clearly explaining the mechanism for refunding affected consumers. In addition, a comprehensive inventory report must be submitted to the competent authorities within five (5) working days. Failure to comply authorizes the authorities to carry out the recall directly at the trader's expense while imposing stringent administrative penalties.

In an unprecedented expansion of liability, penalties are no longer confined to the supplier or the original manufacturer. Pursuant to Article (20), any dealer or trader who purchases or promotes counterfeit or adulterated goods, while knowing—or being presumed to know by virtue of the nature of their business—that such goods are fraudulent, may also be held administratively liable. This expanded responsibility is particularly relevant in sectors involving pharmaceuticals, organic food products, and agricultural produce, where independent administrative fines may be imposed.

3. Final Disposal of Goods and Administrative Settlement: Balancing Enforcement with Economic Flexibility

With respect to the fate of seized goods, the Executive Regulation strikes a balance between rigorous enforcement and economic practicality. Where the goods are safe and legally exportable, the trader must re-export them to the country of origin within thirty (30) days at the trader's own expense. Otherwise, the goods must be officially destroyed within fifteen (15) working days.

The Regulation also permits the competent authorities to apply to the court or the Higher Committee for approval to recycle confiscated goods or allocate them for public benefit, provided that any counterfeit trademarks are removed. This approach promotes environmental sustainability and economic value while safeguarding intellectual property rights.

Recognizing that not all violations arise from intentional misconduct, the Regulation introduces an administrative settlement mechanism, allowing certain violations to be resolved before judicial proceedings commence. However, this mechanism is subject to strict conditions. The settlement request must be submitted within ten (10) working days, the trader must demonstrate that the violation resulted from error or negligence rather than bad faith, the trader's record must be free of any previous administrative fines during the preceding twelve (12) months, and the agreed settlement amount must be paid within five (5) working days from the date of signing the settlement agreement.

In light of this decisive legislative development, our firm strongly recommends that all commercial establishments and companies immediately review and update their supplier agreements to include provisions allocating inspection and recall costs to suppliers. Businesses should also implement robust digital inventory traceability systems capable of facilitating product recalls within twenty-four (24) hours and conduct thorough compliance verification of products and trademarks before they enter the UAE market, thereby ensuring full regulatory compliance and minimizing legal risk.