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The End of Warnings: How Cabinet Resolution No. (107) of 2026 Rewrites the Rules of Commercial Fraud Enforcement in the UAE
3 min 24 sec
Written by
b.alazzeh@tamimi.com 
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On 13 July 2026, the UAE Council of Ministers issued Cabinet Resolution No. (107) of 2026 concerning the Executive Regulations of Federal Decree by Law No. (42) of 2023 Regarding Combating Commercial Fraud (the Resolution). The Resolution repealed Cabinet Resolution No. (11) of 2020 and came into force on 14 August 2026, 30 days after its publication in the Official Gazette.
Resolution No. (107) of 2026 includes legislative changes which mark a fundamental shift in the philosophy of commercial fraud enforcement in the UAE. It has shifted from a compliance framework built on graduated warnings and conciliation to one predicated on immediate enforcement, digital-age inspection powers, and an unprecedented extension of liability to customers who knowingly deal in counterfeit goods.
This article compares the earlier regulations with the new Resolution, identifies the principal changes it introduces, and examines their practical consequences for businesses and trademark owners.
Inspection and sampling procedures
Resolution No. (107) of 2026 significantly expands inspection powers and modernises sampling procedures. Notably, officers may inspect electronic devices, networks, information systems, and software, expressly bringing online commerce and digital evidence within the scope of enforcement.
Where samples are collected and submitted to accredited laboratories for testing, the examination may take no more than 15 working days, and suppliers bear the associated testing costs. This does not, however, prevent authorities from requesting authentication reports from brand owners in relation to suspected counterfeit goods.
Seizure and detention reports
The earlier regime required one report, prepared with the merchant, recording basic information about the samples and goods. In comparison, the new Resolution introduces a broader reporting system covering seizure and detention, release, closure of premises, and obstruction of officers.
Reports must record the time and place, license details, goods and their condition, the violation, and the instruments used. A seizure report must also inform the offender of the right to seek settlement within seven working days. This creates a clearer and more complete record for enforcement and subsequent proceedings.
Recall of goods from markets
Withdrawal of defective products is now governed by a detailed timetable rather than a general ministerial power implemented by sub-committees. Within 24 hours of notification, the supplier must stop sales, begin withdrawal, and notify every point of sale. Within 48 hours, it must publish Arabic and English notices identifying the supplier, trademark, goods, origin, refund process, withdrawal period, and return locations. If the supplier does not act, the authorities may intervene and recover the expense.
Disposal of fraudulent goods
The new Resolution expands disposal options of fraudulent goods to include use, recycling, destruction, and return to source. Unlike the previous framework, authorities no longer need the brand owner’s permission to use fraudulent goods, provided that no IP rights are infringed, counterfeit marks are removed, and disposal does not endanger health, safety, or the environment. This provides greater flexibility while maintaining clear IP and public-interest safeguards.
Destruction controls
Destruction remains applicable and subject to the competent authority’s decision. However, the new Resolution introduces a deadline of 15 working days. The Resolution also permits destruction outside the UAE where necessary, providing a practical solution for large or specialised inventories.
Recycling provisions
Article 14 of the Resolution permits the competent authority to seek recycling proactively, including before a destruction order, where environmental or economic benefits justify it. This change introduces a sustainability-oriented remedy without allowing recycling to become a route by which infringing goods or marks return to the market.
Conciliation and settlement procedures
The former conciliation procedure allowed 15 working days to apply, followed by committee review and a possible grievance. In contrast, the new settlement process shortens the application period to 10 working days, requires a decision within 15 working days, treats silence as rejection, and requires payment within five working days after signing.
A rejection to the conciliation request may be challenged within seven working days and is decided within 10 working days. Settlement is available only for violations caused by error or negligence, not intent or bad faith. It is also unavailable where a fine was imposed within the preceding 12 months. Applicants must remedy the violation and make an advance deposit of at least twice the applicable minimum fine. Settlement does not eliminate civil liability or make the underlying conduct lawful.
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The new Resolution introduces administrative fines, in amounts determined by the competent authority, where a customer knew or should have known that goods were fraudulent, corrupt, or counterfeit
Administrative penalties on customers
The earlier regulations contained no customer-liability provision. Article 20 of the new Resolution introduces administrative fines, in amounts determined by the competent authority, where a customer knew or should have known that goods were fraudulent, corrupt, or counterfeit. The assessment may take into account the customer’s profession, trade, or level of expertise.
The abolition of the warnings mechanism
The earlier regulations used two written warnings, each allowing three working days to cure a violation before escalation, while the new Resolution contains no replacement warning mechanism. Enforcement may proceed directly through seizure, detention, administrative penalties, settlement, or prosecution. The new change removes a predictable grace period and places the burden on businesses to identify and correct non-compliance before inspection.
The absence of warnings also reduces the opportunity to cure defects after an inspection has begun. For trademark owners, it should accelerate intervention against counterfeit goods.
The new Resolution marks a clear shift from a warning-led approach to immediate, documented, and technology-enabled enforcement. Businesses should therefore adopt proactive supply-chain and digital controls, maintain clear procedures for withdrawal, and recognise that settlement does not prevent subsequent civil claims.
The extension of liability to customers further broadens the compliance risk. The practical message is clear: compliance must come before inspection, as the new framework is built around enforcement rather than graduated warnings.
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