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Product Regulation & Liability

United Arab Emirates: Enhancing consumer rights – Exploring the UAE’s latest Consumer Protection Regulations

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In brief

On 3 July 2023, the UAE issued Cabinet Decision No. 66 of 2023 concerning the Executive Regulations of Federal Law No. 15 of 2020 on Consumer Protection (“Executive Regulations“). The most prominent changes in the Executive Regulations include the additional safeguards granted to customers and guidance on prohibited clauses and conditions to be included in contracts and Terms & Conditions (T&Cs) with customers. With the widespread use of e-commerce globally, the Executive Regulations have also brought e-commerce providers under its remit and placed additional responsibilities on such providers.

Key takeaways

With the Executive Regulations coming into force on 14 October 2023, we have set out below the key provisions:

  • Prohibited conditions: The Executive Regulations safeguard the consumer from unfair contractual terms by setting out examples of conditions that would be considered null and void if they are included in a contract, T&Cs, invoice or other document issued by a supplier. These include, without limitation:
    • Granting the supplier the right to interpret or amend certain clauses or unilaterally terminate the contract without referring to the customer.
    • Prohibiting a customer from claiming compensation when a supplier breaches its obligations.
    • Prohibiting the use of the clause ‘Goods sold are neither returnable nor substitutable‘ unless: (i) the customer is aware of the defect and accepts the product in an ‘as-is’ basis and as evidenced in the purchase invoice; (ii) the product’s nature or property prevents its replacement or return such that the product cannot be reinstated to its condition at the time of purchase; or (iii) the product is a perishable product.
    • Obligating a customer to deal with particular finance or insurance companies.
  • Warranties: Although the Executive Regulations have not set out a minimum prescribed warranty period for products and services provided in the UAE, they set out the requirements that warranties must abide by. Additionally, customers are provided with three options in case of a breach of warranty by the supplier which include:
    • Full price refund (if the service has not been provided or its provision has not been fulfilled).
    • Partial refund of the price.
    • Re-provision of service.
  • Extension of warranties: The Executive Regulations extend the warranty period to cover the period during which the customer was unable to utilize the product due to the repair of defects or delay in maintenance. This means that suppliers would need to adjust the warranty period to account for any delays in fulfilling repairs and will therefore incentivize suppliers to complete any repairs efficiently.
  • Maintenance service provision: Suppliers are under an obligation to develop a mechanism which must be provided in writing (such as a booklet) in at least the Arabic language for the provision of spare parts and maintenance services. The details of such mechanism should be readily accessible by customers and be published on the supplier’s website.
  • E-Commerce: The Executive Regulations apply to e-commerce providers in line with the UAE Consumer Protection Law. They include numerous obligations on e-commerce providers such as ensuring compliance of standards, specifications and regulations and also being responsible for any failure of products offered by any third party that offers its products through its platform.
  • Product recall: Similar to the previous executive regulations, the Executive Regulations also contain the circumstances that product recalls would be required as well as the reporting mechanism (and notification of customers) relating to such recalls.
  • Promotions and discounts: The Executive Regulations reiterate the requirement for suppliers to apply for promotion and discount permits for any promotion periods. Most notably, the Executive Regulations impose an obligation on suppliers to inform customers of any discounts that will be offered for products or services within one week from the date of purchase of the product or service. In case of violation, the customer will be refunded the price difference within 30 days from the date of purchase of the good or service.
  • Administrative attachment on products: In the event there is adequate evidence that there is a breach of the UAE Consumer Protection Law or the Executive Regulations, or if there is any risk on the health and safety of customers, the UAE authorities are permitted to temporarily seize the products and test their conformity.
  • Penalties: An extensive list of violations and other obligations on the suppliers has been introduced and annexed to the Executive Regulations. Penalties include a warning in the first instance followed by the imposition of fines ranging from AED 50,000 to AED 1 million with a potential license suspension.

To speak to us in relation to the UAE Consumer Protection Law or the Executive Regulations, or matters and issues more generally, please reach out to the Baker McKenzie contacts above.

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Author

Hani has been practicing since 2007 with a focus on M&A, joint ventures, corporate reorganizations and post-acquisition integration as well as corporate structuring, foreign direct investment and market entry in the Middle East with a particular focus on the UAE and Qatar. His experience also covers general commercial contracts such as agency and distribution and advice on corporate governance, compliance and competition matters.
Hani focuses on the healthcare, technology and the retail sectors but he also gained substantive experience advising both companies and government agencies in the defense sector and had significant exposure assisting governmental authorities with developing their internal structures and drafting legislations.
Hani is also the lead Pro Bono partner in the UAE and the Middle East.
Hani holds an MBA degree and a Masters in Management alongside his law degree. He is fully trilingual and practices in English, French and Arabic, all three at a professional level.
Prior to joining Baker McKenzie’s UAE offices in April 2012, Hani worked as a corporate associate at an international law firm in both Dubai and Doha between 2008 and 2012 and prior to that worked at an FMCG company and a private equity group in Kuwait.

Author

Laya Aoun-Hani is a Counsel and senior member of the EMEA Baker McKenzie International Commercial & Trade Practice Group. With over 17 years of experience in the Middle East, Laya regularly advises multinational clients from different industries on commercial transactions, multijurisdictional distribution and agency arrangements and restructurings, commercial disputes settlements, competition law, trade compliance, export controls, trade sanctions and customs matters. She is the Middle East lead for the Baker McKenzie Consumer Goods and Retail Industry Group and has also extensive experience in the Healthcare sector.
Laya trained at one of the largest law firms in Lebanon and one of the largest international law firms in London before she joined Baker McKenzie in Dubai in 2013. She was a lecturer and coordinator of a Business Law course for five years at the Faculty of Business at Antonine University in Lebanon and she currently delivers training courses to lawyers in the private practice at the Dubai Legal Affairs Department.

Author

Sami is an associate in the Firm's Dubai office. Sami is a corporate lawyer with a focus on corporate reorganizations and restructurings, carve-outs, joint ventures and mergers and acquisitions. He also advises on foreign direct investment structures and advises multi-national clients on structuring their presence in the UAE.
Sami also advises on product compliance and consumer protection issues in the UAE.

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