The UAE’s Commercial Agencies Law now stipulates severe penalties for violations, including the seizure of goods and fines of up to Dh400,000. This applies to any party found in breach of the law, whether it involves a third party or two contractual parties.
Hasan Al Kilany, Senior Legal Counsel at the Ministry of Economy, emphasized that penalties will be strictly enforced to uphold the law’s integrity. A new disciplinary Cabinet resolution has also been introduced to address those who compromise the UAE’s commercial agencies law.
The fines are an integral part of the Commercial Agencies Law, which officially took effect on June 16, 2023. Previously, disputes of this nature were handled in civil courts.
Under the new disciplinary Cabinet resolution, individuals involved in wrongdoing will face a tiered penalty system. It begins with a warning, followed by a Dh100,000 fine for initial offenses, escalating to Dh200,000 for recurring violations and the seizure of goods. The most severe penalty entails a Dh400,000 fine.
The new Commercial Agencies Law applies across all sectors and emphasizes that commercial agencies must be exclusively owned by UAE nationals or public joint-stock companies with a minimum of 51 percent ownership by nationals.
These penalties are designed to address various violations, including instances where agents in one emirate attempt to bypass geographical restrictions and operate in another emirate for the sale of goods.”