UAE Issued New Penalties Under the Consumer Protection Law

Posted by Awatif Mohammad Shoqi Advocates & Legal Consultancy on April 4th, 2024

Introduction:

The Ministry of Economy in the UAE has recently introduced a comprehensive list of violations under Cabinet Decision No. 66/2023 concerning the Executive Regulation of Federal Law No. 15/2020 on Consumer Protection. Federal Law No. 15/2020 regarding Consumer Protection has further amended some provisions through Federal Decree Law No. 5 of 2023.

Cabinet Decision No. 66/2023, serving as the Executive Regulation of Federal Law No. 15/2020 on Consumer Protection in the UAE, outlines measures to safeguard consumer rights and regulate supplier responsibilities. It mandates transparent labelling of commodities with essential information, prohibits misleading advertising, and establishes guidelines for warranty implementation and handling defective products. Additionally, it authorizes the Minister to set standards for after-sale services and requires suppliers to obtain permission for promotions and discounts. These regulations aim to ensure fair practices, transparency, and consumer satisfaction in commercial transactions throughout the UAE.

The new Consumer Protection Law and its executive regulation represent a significant step toward ensuring fair treatment of consumers. This advancement includes two primary aspects: Empowering local authorities to enforce consumer protection laws more effectively by granting them important legislative powers. These authorities now hold fundamental legal capabilities, including:

• Receiving, investigating, and addressing consumer complaints.
• Imposing administrative sanctions and fines for violations of the law and its executive regulation.
• Addressing grievances filed against decisions regarding disciplinary measures.

Administrative Sanctions under Cabinet Decision No. 66/2023:

The Ministry of Economy may impose one or more administrative sanctions on the supplier for violations of any provision of Federal Law No. 15/2020 concerning Consumer Protection. These sanctions include:

1. Notice: An initial warning issued to the supplier.
2. Administrative Fine: A monetary penalty, with doubled amounts for repeated violations.
3. Temporary Administrative Closure: Closure lasting between 24 hours and 90 days.
4. Suspension of Activity: Full or partial suspension for 24 hours to 90 days.
5. Revocation of License: Withdrawal of license and removal from the commercial registry.

Cabinet Decision No. 66/2023 details a comprehensive table of 46 financial penalties ranging from Dh 100,000 to Dh 1 million, depending on the nature and impact of the violations. Significant penalties include fines for:

1. Article 8(4): A fine of AED 100,000 if the supplier fails to issue the invoice in the Arabic language.
2. Article 11: A fine of AED 100,000 for the failure of the supplier to provide the consumer with the warranty document.
3. Article 20: A fine of AED 500,000 for the failure to advise both the concerned body and the consumer of potential harm and protection measures.
4. Article 24(2): A fine of AED 1,000,000 for closing the return file without obtaining permission from the concerned body.
5. Article 27(2): A fine of AED 500,000 for failure to provide an alternative commodity in case of a supplier-responsible failure.
6. Article 28(1): A fine of AED 500,000 for failure to provide a new alternative commodity or its value in case of a recurrent failure during the warranty period.
7. Article 18: A fine of AED 300,000 for failure to provide periodical maintenance services for the warranted commodity.
8. Article 32(d): A fine of AED 100,000 for selling commodities or services at prices lower than the cost price to create a monopolistic condition.
9. Article 32(a): A fine of AED 100,000 for discrimination between consumers in the sale of commodities or utilization of services.
10. Article 32(b): A fine of AED 200,000 for hiding or abstaining from selling a commodity, imposing conditions irrelevant to the original dealing.
11. Article 32(h): A fine of AED 100,000 for purchasing competing commodities or services from the market to control the prices.

The Ministry of Economy regulations provide detailed measures aimed at restricting monopolistic practices and safeguarding consumer rights. They are authorized to impose administrative sanctions and financial penalties for violations, ensuring adherence to these guidelines and encouraging a fair marketplace conducive to consumer welfare.

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Author

Awatif Mohammad Shoqi Advocates & Legal Consultancy is a full-service law firm in UAE, duly licensed to perform legal services and advocacy in the United Arab Emirates with a head office in Dubai and branch office in Abu Dhabi.  Our firm serves and represent both local and expatriate companies and individual clients.