In brief
The UAE has issued Cabinet Decision No. 107 of 2026 (“Implementing Regulation”), implementing Federal Decree-Law No. 42 of 2023 on Combating Commercial Fraud (“Federal Decree-Law”). The Federal Decree-Law establishes the principal prohibitions, obligations, enforcement powers and penalties relating to adulterated, defective and counterfeit goods. The Implementing Regulation sets out the procedures for inspection, seizure, withdrawal, disposal and settlement, and imposes detailed recall and reporting requirements. Of particular relevance are the circumstances in which the Ministry of Economy and Tourism (“Ministry”) may intervene and the accelerated product recall and reporting requirements.
Key takeaways
- Authorities have extensive powers to inspect premises, seize goods and order product withdrawals.
- Suppliers face accelerated recall obligations, including 24-hour and 48-hour compliance deadlines.
- Detailed reporting requirements apply once a recall is initiated.
- Authorities may step in and conduct recalls directly at the supplier’s expense where suppliers fail to act.
In more detail
Enforcement and investigation procedures
The Implementing Regulation gives both the Ministry and local competent authorities a central role in enforcing commercial fraud rules. Competent authorities are responsible for the withdrawal, disposal, destruction or return of adulterated, defective and counterfeit goods. The Ministry may also intervene directly where goods are distributed across multiple Emirates, present significant risks to human or animal health or the environment, or where a competent authority does not take action within 10 working days of being notified.
The Federal Decree-Law grants judicial officers broad inspection powers, including entering commercial premises, warehouses, factories and other non-residential locations, reviewing records, taking samples and seizing suspected goods or leaving them with the provider under its responsibility. The Implementing Regulation details the exercise of those powers, including inspection of relevant systems and devices where required, sampling and laboratory analysis, and custody and release procedures. In a withdrawal, the Ministry or competent authority must also warn the public against purchasing or using the affected products.
Accelerated product recall regime
One of the most notable developments is the introduction of a fast-tracked recall process.
Where the Ministry or the competent authority determines that goods are adulterated, defective or counterfeit, the supplier may be ordered to immediately cease selling or offering those products for sale. Within 24 hours of receiving the notification, the supplier must take the necessary measures to withdraw the products from the market and warehouses and notify all points of sale and entities to which the products were supplied. Those parties must also be instructed to withdraw, recover and remove the products from circulation within 24 hours. Suppliers must retain evidence demonstrating that these actions have been completed. The recall process is also accompanied by public communication obligations. Suppliers are generally required to publish a recall announcement through approved media channels within 48 hours of receiving the notification. Authorities may shorten this deadline where the products present heightened health, safety or environmental risks. The announcement must contain detailed information regarding the affected products, the supplier’s contact details, refund procedures, and the locations designated for product returns.
Importantly, suppliers that fail to carry out a recall within the required timeframe may find the authorities conducting the withdrawal themselves and recovering all associated costs from the supplier. Authorities also have powers to withdraw products where the supplier cannot be reached.
Enhanced reporting obligations
The Implementing Regulation imposes detailed post-recall reporting requirements.
Within five working days of commencing withdrawal procedures, suppliers must submit a report to the Ministry or the competent authority describing the recall process and its progress. The report must include information on the affected products, unsold inventory, products distributed within the market, quantities withdrawn and refunded products. Authorities may also require the submission of additional data, documentation or periodic reports and may require suppliers to implement further measures relating to the withdrawal process.
Settlement mechanism for certain violations
While the Federal Decree-Law permits settlement of violations, the Implementing Regulation introduces a formal procedure for seeking settlement.
A settlement application may be submitted to the Ministry or the competent authority where the relevant violation resulted from error or negligence rather than intentional misconduct or bad faith. However, settlement is not available where the violator has been fined under the Federal Decree-Law during the preceding 12 months for the violation in question. To obtain settlement approval, the violator must rectify the causes of the violation and pay the agreed settlement amount. While settlement may offer businesses a practical route to resolve certain enforcement matters, it does not eliminate civil liability to affected parties and does not change the fact that the underlying conduct constitutes a violation.
Call to action
- Review and update product recall and incident response procedures to ensure they align with the Implementing Regulation’s accelerated notification, withdrawal and reporting requirements.
- Assess product traceability and record-keeping systems to ensure the business can quickly identify affected products, supply chain participants and customers in the event of a recall.
- Review contractual arrangements with distributors, retailers and logistics providers to confirm that responsibilities for product withdrawals, customer notifications and information sharing are clearly allocated.
- Establish clear internal escalation and governance procedures to facilitate timely responses to regulatory investigations, inspections and reporting requests.
- Consider conducting product recall readiness training and simulation exercises to test internal procedures and ensure key stakeholders understand their responsibilities under the new framework.
At Baker McKenzie, we remain available to assist with compliance with the Implementing Regulation and the new commercial fraud framework, including reviewing internal policies and procedures, advising on reporting and recall obligations, conducting compliance gap assessments, and delivering tailored training and product recall readiness exercises to help businesses prepare for regulatory inspections, investigations and enforcement actions.