Business | Markets
Consumer law in line with WTO requirements
The issue of a new consumer protection law in the UAE is the latest move to bring the country in line with World Trade Organisation (WTO) requirements for increased competition, according to analysts.
- By Robert Ditcham, Staff Reporter
- Published: 00:00 August 30, 2006
Dubai: The issue of a new consumer protection law in the UAE is the latest move to bring the country in line with World Trade Organisation (WTO) requirements for increased competition, according to analysts.
Serious objections to the absence of competition legislation were raised by the WTO at a three-day Trade Policy Review held earlier this year and attended by the UAE's Economy Minister Shaikha Lubna Al Qasimi.
At the time, the global trade watchdog asked the UAE to liberalise certain areas of the trade and economy. It highlighted the fact that importing activities and distribution services are often reserved for exclusive national agents, and that branches of foreign companies are obliged to recruit a local agent.
Though the Consumer Protection Federal Law covers consumers' rights and supplier's liabilities, rather attempting to break the hold of big business, the move is seen as an important step towards greater openness and preventing creation of monopolies.
"The law doesn't really affect our relationship with the principal brand owner," said one prominent Dubai retailer, who wished to remain anonymous.
"But it puts greater demand on both the principal and the distributor to work together to provide a better service to the customer."
The only part of the law dealing with UAE agencies ensures that a commercial agent or distributor honours all guarantees provided by the manufacturer or the trade agent of a commodity.
"This law doesn't specifically tackle the domination of the UAE's retail scene by relatively few agents, but it's another step in achieving creating greater transparency and maturity," said an analyst.
When the consumer protection law comes into affect it will cover issues including penalties for supplying faulty goods, supplier's liabilities and the formation of a consumer protection department. A hot line will be set up to receive customer complaints.
According to Shaikha Lubna the law will "grant full rights to consumers in the process to choose, buy, exchange or returning a commodity in addition to other rights granted to consumer by the law".
The law is considered a build up towards the introduction of the Competition Law, as outlined by the UAE's trade policy report submitted to the WTO.
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