In a significant development, the Ministry of Economy in the United Arab Emirates (UAE) has announced a fine of up to Dirhams 400,000 (Rs 90,36,535) on companies found to be violating the updated Commercial Agency Law.
International businesses selling goods or services to non-contractual entities may face fines after an initial warning.
As per a report by Khaleej Times, Hasan AlKilany, Senior Legal Counsel at the UAE Ministry of Economy, emphasized on Monday, September 11, that this is a significant change from the previous law, which required complaints to be resolved in civil courts.
The new disciplinary Cabinet resolution will result in two levels of punishment for this individual: a warning for the first offence, followed by fines of Dirhams 100,000 (Rs 22,58,596) and Dirhams 200,000 (Rs 45,17,802), along with Customs’ seizure of goods. The fines could reach as high as Dirhams 400,000 for repeat violations.
The new commercial agencies law came into effect on June 16, 2023, affecting all sectors.
The business of commercial agencies will be exclusive to UAE citizens, as well as public joint-stock companies, of which citizens own at least 51 percent.
Penalties are imposed for any wrongdoing, such as an agent bypassing geographical limitations and selling goods in another emirate.
