Abu Dhabi: The government will step up efforts to fight fraud and trade in fake goods, with unscrupulous traders facing up to two years in jail, a Dh1 million fine and being named and shamed at their cost, states a draft law.

Traders in counterfeit goods will be penalised even if buyers knew about these goods ahead of the transaction, stated the draft law passed by the Cabinet in early January.

Fraudsters would face up to two years in jail or be fined between Dh250,000 and Dh1 million or both, according to the new bill, a copy of which was obtained by Gulf News.

“Anyone who deceives or attempts to deceive another party by means of fraud in human food, animal feed, medicines, crops or natural products may be punished. Anyone promoting by any media means or possessing fraudulent and/or deceitful products may also be punishable under this law.”

The only law on commercial fraud in practice in the country was drafted in 1979. It calls for a maximum jail term of two years and maximum fine of Dh10,000 for cheating a customer by delivering goods that are different to what is ordered.

His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, had said earlier the UAE will continue to develop legislation and laws to protect the community and markets from various types of crimes and fraud, in accordance with the best systems and international standards.

The new draft law also seeks to protect consumers, Shaikh Mohammed said, and added the legal move was in accordance with the directives of the government to build transparent and professional markets in which sellers and consumers enjoy full rights and duties.

“The consumer protection consolidates the principle of transparency and impartiality in the business sector,” he said.

The new legislation, which needs to be passed by the Federal National Council before it is signed into law by the President His Highness Shaikh Khalifa Bin Zayed Al Nahyan, empowers the court to order confiscation or destruction of food, medical drugs, crops and tools. Under the law, the court may also order publishing the convictions in two local Arabic and English dailies with the convicts bearing the cost.

The court may also order the business of offenders to be closed down for up to six months. If a business is a department store, only the offending department will be shut down. Repeat offenders may face revoking of their trading licences and double penalties.

The new federal bill will set up a federal committee to combat commercial fraud. The committee will study reports of fraud and deceit submitted by competent authorities and take the necessary decisions. Subcommittees will also be created in each emirate.

The bill includes several articles covering all types of commercial fraud, such as the sale, display or possession of counterfeit goods in addition to provisions related to the prohibition of misleading advertisements.

The bill lays down a mechanism to deal with counterfeit or rotten goods. It orders importers to return these goods to their source of origin within a specified period, or to destroy or recycle them. “In all cases, the importers will bear the costs for disposal of the goods,” according to the law.

The bill states that the conditions for fraud and deceit include any variation in the commodity agreed upon. This could be a fictitious type of product, or discrepancies in the origin, source, pricing or quantity.

Fraud may also be applicable in cases where products have been adulterated or an attempt to adulterate products is detected.