Decree Amending the "Unified System" to Combat Commercial Fraud in Cooperation Council Countries
A Law Decree No. 93 of 2026 amending Article (11) of the Unified Law (Regulation) on Combating Commercial Fraud of the Gulf Cooperation Council (GCC) States, issued by Law No. 20 of 2019, was published in the official gazette, “Al-Kuwait Al-Youm.” Its articles read as follows:
Article 1:
The text of Article (11) of the Unified Law (Regulation) on Preventing Commercial Fraud of the GCC States, annexed to the aforementioned Law No. 20 of 2019, is replaced with the following text:
“Any person who violates the provisions of Articles (2), (3), and (5), and subparagraphs (a) and (b) of Article (8) of this Law (Regulation) shall be punished with imprisonment for a term not exceeding two years, and/or a fine of not less than 5,000 (five thousand) Saudi Riyals or the equivalent in the currencies of the GCC States, and not more than 1,000,000 (one million) Saudi Riyals or the equivalent in the currencies of the GCC States, or with either of these two penalties.”
Article 2:
Ministers shall, each within their respective purview, implement this Law Decree. It shall enter into force from the date of its publication in the official gazette.
The explanatory memorandum to Law Decree No. 93 of 2026 amending Article (11) of the Unified Law (Regulation) on Combating Commercial Fraud of the GCC States, issued by Law No. (20) of 2019, reads as follows:
Law No. (20) of 2019 was issued, encompassing the Unified Law (Regulation) on Combating Commercial Fraud of the GCC States. It regulated the provisions for combating commercial fraud, specified the prohibited forms of fraud, established the obligations imposed on suppliers, and set forth the rules regarding the seizure and disposal of fraudulent goods, in addition to the penalties prescribed for violations of its provisions.
Article (2) of the aforementioned Law specified the prohibited forms of commercial fraud. Article (3) obligated suppliers to withdraw fraudulent goods from markets and warehouses. Article (4) established the presumption of the supplier’s knowledge of the nature of the fraudulent goods. Article (5) required suppliers to refund the value of the fraudulent goods to the buyer. Meanwhile, Article (6) regulated the granting of judicial police powers to a category of employees tasked with enforcing the provisions of the Law.
Article (11) of the aforementioned Law had prescribed penalties for violations of the provisions of Articles (3), (4), and (6), and subparagraphs (a) and (b) of Article (8), without including references to Articles (2) and (5), despite the fact that these articles contain substantive provisions directly related to the prohibited forms of commercial fraud and the obligation to refund the value of fraudulent goods to the buyer.
Furthermore, Articles (4) and (6) do not contain prohibited acts or omissions that, in themselves, constitute grounds for criminalization and punishment. Article (4) establishes a rule regarding the presumption of the supplier’s knowledge of the nature of the fraudulent goods, while Article (6) regulates the granting of judicial police status to certain employees.
A review of the original drafting of Article (11) of the Unified Law (Regulation) on Combating Commercial Fraud of the GCC States—as adopted by the Supreme Council of the GCC in its 37th session, held in the Kingdom of Bahrain from 6 to 7 December 2016—and through the communication from the General Secretariat of the GCC regarding a typographical error in the text of the said article, revealed that the text of Article (11) was subsequently corrected to align with the legislative intent, so that the penalty covers violations of the provisions of Articles (2), (3), and (5), and subparagraphs (a) and (b) of Article (8).
Accordingly, the present Law Decree was prepared to rectify the error in the references stipulated in Article (11) of the aforementioned Unified Law (Regulation) and to align the national text with the corrected text of the Unified Law (Regulation) on Combating Commercial Fraud of the GCC States.
Article 1 of the Decree provides for the replacement of the text of Article (11) thereof, with the effect that the penalty shall cover violations of the provisions of Articles (2), (3), and (5), and subparagraphs (a) and (b) of Article (8), while excluding references to Articles (4) and (6).
Article 2 stipulates that the Decree shall enter into force from the date of its publication in the official gazette.
Given that the Amir’s Order was issued on 2 Dhul-Qa’dah 1445 AH, corresponding to 10 May 2024, and Article 4 thereof stipulates that laws shall be issued by Law Decrees, the present Law Decree was accordingly prepared.
