UAE: Amendments to the Consumer Protection Law

UAE: Amendments to the Consumer Protection Law

On 10th November 2020, His Highness Khalifa bin Zayed Al Nahyan, President of the United Arab Emirates, issued Federal Law No. (15) of 2020 on Consumer Protection (the 'Consumer Protection Law'), repealing Federal Law No. (24) of 2006 on Consumer Protection (the 'Old Consumer Protection Law').

The Consumer Protection Law's main objective is to further protect consumers' rights in the United Arab Emirates ('UAE'). It extends to the sale and purchase of all goods and services supplied in the United Arab Emirates (including free zones) and e-commerce website and sources registered in the United Arab Emirates. 

Among its goals, the Consumer Protection Law aims to ensure: 

1. Health and safety for consumers; and 
2. The quality of goods and services and how they are marketed; 
3. Consumption patterns of sound.        

The Old Consumer Protection Act defines "Supplier" extensively and captures any legal person, including but not limited to manufacturers, distributors, service providers or any person "plays a part in producing or trading or storing a commodity to provide the same to the consumer". The concept of 'Supplier' now refers to suppliers of e-commerce services registered in the UAE. Given the substantial growth of e-commerce in the UAE, this latter point is essential, especially during the Covid 19 pandemic, which has intensified e-commerce activities. As such, a welcome change is the expansion of the legislation to include such events.

The main points that the Consumer Protection Law include the following:

Consumer rights protections: 

1. Suppliers have an obligation of protection of privacy and personal protection and not use consumer data: for promotion and marketing Article 4(5)); and when presenting them with some good or service, moral beliefs, practices and rituals (Article (4(6).
2. Issuance of documents in Arabic: The legislation requires that customers be presented with a comprehensive invoice containing: the trade name, address, class of product (or services), price and quantity, and any other details which may be needed to be released (as applicable) in compliance with the Executive Regulations (Article (8(3)). There is a requirement, at the discretion of the organization, for such an invoice to be given in Arabic and a version in some other language (Article 8(4)).
3. E-Commerce: Providers of e-commerce services registered within the UAE are expected to provide their names, legal status, address, licensing authority details and other adequate information in Arabic to customers and competent authorities. Details of parameters, contract terms, payment and maintenance conditions are also required (Article (25)).
4. Promoting/Discount Approval: An effective licence from the competent authority is required before the promotion of products or services or the implementation of general price discounts (Article (18)).
5. Penalties: From those outlined in the Old Consumer Protection Legislation, the applicable provisions for violating the Consumer Protection Law have improved. E.g., imprisonment of up to two years and a fine not exceeding AED 2 million may result in the following (Article (29)); Failure to comply with legible and straightforward labelling (including how a specific good should be used and installed); Providing deceptive pricing for products and services; Failure without charge to fix or replace a faulty product; and Advertising products or services unfairly (or providing false data). Penalties in the case of a re-offence can be doubled.

Under Article 36 of the Consumer Protection Law, it is expected that the Executive Regulations will conform with the Consumer Protection Law by 15th May 2021 and provide more clarification. We will include an update to this client warning until the same one is released. Furthermore, Article 33 of the Consumer Protection Law states that any who are caught in compliance with the provisions of the law shall ensure that they are entirely complied by 10th November 2021 or any other date appropriate to the UAE authorities. Article 36 of the Consumer Protection Law specifies that, by 15th May 2021, the Executive Regulations are required to comply with the Consumer Protection Law and offer more clarity. Furthermore, Article 33 of the Consumer Protection Law specifies that all those caught in compliance with the provisions of the law must ensure that they are fully complied with by 10th November 2021 or by some other date suitable for the authorities the United Arab Emirates.