The UAE Ministry of Economy (“the Ministry”) has issued Cabinet Decision No. 89/2023 (“the Cabinet Decision”) specifying the administrative penalties which will be levied for violation of Federal Law No. 3 of 2022 Concerning the Regulation of Commercial Agencies (“the Commercial Agencies Law”).
These administrative penalties have been issued to support the operation of existing commercial agencies in the UAE in compliance with the provisions of the Commercial Agencies Law.
Violation of any clauses of Article 2 of the Commercial Agencies Law, which include:
- Ownership of a commercial agency by non-UAE nationals
- Percentage of the nationals in a Public Joint Stock Company falling below 51%
- An international company engaging in the business of commercial agencies for its owned products without obtaining the approval of the cabinet.
Shall lead to the cancellation of the commercial agency.
For violation of other clauses of the Commercial Agencies Law the Ministry may issue a written warning to the violating party and grant them a period not exceeding 15 days to rectify the violation.
From minor penalties starting at AED 5000, fines for repeated violations can also go up to AED 400,000. In cases where the violation is considered serious, the Ministry may impose a severe administrative penalty, order to seize the goods by the UAE Customs, suspend the commercial agency for a certain period or revoke the commercial agency’s license.
An appeal against the administrative penalty imposed may be filed to the Minister of Economy within 30 days from the date of being notified of the penalty and such appeal shall be decided within 30 days from the date of its submission. The decision issued regarding the appeal shall be final.
This article does not constitute legal advice and should not be relied upon as such. For any further information or any queries, please contact our Corporate Commercial Department by clicking here.