UAE Competition Law Update: Ministerial Decision No. 96 of 2026 Granting Temporary Exemptions to Certain Agreements relating to Essential Goods and Services 

On 16 April 2026, the Ministry of Economy and Tourism (Ministry) took an important initiative by issuing Ministerial Decision No. 96 of 2026 (Decision), granting a temporary and specifically scoped exemption from certain provisions of Federal Decree-Law No. 36 of 2023 Regulating Competition (CL). The exemption permits undertakings to coordinate on specific operational matters to ensure continuity of supply of essential goods and services during exceptional circumstances.

By way of context, Article 5 of the CL prohibits agreements between undertakings whose object, purpose or effect is to distort or restrict competition in the UAE, including price fixing, market sharing, bid rigging, and limitations on production or distribution.

The CL nevertheless recognises that, in limited circumstances, coordination may be justified. It, therefore, provides for both individual exemptions (Article 9) and category-based exemptions (Article 11) granted by ministerial decision. The Decision falls under the type of decisions that may be issued under Article 11 of the CL.

Scope of the Exemption

The specifically scoped exemption applies to agreements, arrangements, or concerted practices between undertakings operating in the UAE that are aimed at ensuring continuity of production, supply, or distribution of “essential goods and services” during exceptional circumstances and that meet the relevant conditions set out in the Decision.

Essential Goods and Services

The Decision has specifically determined the below as “essential goods and services” with the possibility of adding further goods or services by the Ministry in coordination with the relevant authorities:

• Food and essential consumer goods: wheat, rice, flour, sugar, vegetable oils, dairy products, meat, poultry, fish, eggs, bread, canned food, and bottled water
• Transport and logistics services: maritime, air, and land freight, port services, storage, cold chain logistics, and distribution of essential goods

Any other goods or services can be added to the list by the Ministry in coordination with the relevant authorities.

Exempted Agreements

Relying on Article 11 of the CL, the Decision exempts certain coordination from the prohibitions set out in Article 5(1)(b) and (d) and Article 5(2)(a) of the CL. Specifically, the following instances of coordination have been mentioned under Article 3 of the Decision.

• Exemption from Article 5(1)(b) of the CL: Agreements between undertakings determining the conditions of sale, purchase, or service performance and the like whose subject, purpose, or impact is to restrict competition are prohibited. However, if any such agreements relate to supply and distribution coordination of essential goods and services, such as transport and distribution arrangements, delivery mechanisms, scheduling, and unification of certain technical or logistical requirements, they may be exempted under the Decision.
• Exemption from Article 5(1)(d) of the CL: Agreements between undertakings freezing or limiting production, development, distribution, or marketing operations or other economic activities whose subject, purpose, or impact is to restrict competition are prohibited. However, if any such agreements relate to production and logistics optimisation of essential goods and services, including redirecting production capacity, sharing storage or transport infrastructure, or temporarily redistributing distribution areas to ensure market coverage, they may be exempted under the Decision.
• Exemption from Article 5(2)(a) of the CL: Agreements relating to sharing markets or segmenting customers based on geographical areas, distribution centers, type of customers, seasons, and periods, or any other basis, whose subject, purpose, or impact is to restrict competition are prohibited. However, if any such agreements relate to the temporary allocation of supply areas or customers relating to essential goods and services, strictly to ensure market coverage and prevent shortages during exceptional circumstances, they may be exempted under the Decision.

Conditions and Prohibitions

To benefit from the exemption, the undertaking must satisfy certain conditions set out in the Decision, including:

• Cooperation should be necessary and proportionate to address supply disruptions in essential goods or services based on the requirements of exceptional circumstances.
• Cooperation shall be permitted in purely operational aspects and to the extent necessary to ensure continuity of supply, and in no case may such cooperation extend to core elements of competition.
• Cooperation should not include any form of coordination or understanding regarding prices, discounts, costs, profit margins, or any pricing elements, whether directly or indirectly, including through systems or algorithms.
• Cooperation should not lead to dominance in the market or the exclusion of competitors from the market.
• Cooperation is not a means of collusion in tenders, bids, or auctions.
• No artificial shortage of goods or services should be created, nor should they be concealed or stored without justification.
• Cooperation must be temporary and should not exceed what is necessary to address exceptional circumstances.
• Cooperation should not result in any negative effect on consumer rights or on price levels or availability of goods and services.
• Cooperation should not continue after the disappearance of the reasons that necessitated it, unless the Ministry or a relevant authority determines otherwise.
• The subject, purpose, or impact of coordination is not to restrict the free flow of goods or services to or from the relevant market, including concealing or storing them without justification, refraining from dealing therein, or artificially creating a sudden surplus leading to their sale at a manufactured price.
• Cooperation should not cause harm to the interests of the final consumer.

Notification

Undertakings seeking the exemption under the Decision must notify the Ministry or relevant authority via competition@moet.gov.ae within 15 working days from implementation of the agreement, or immediately upon the Ministry’s request, whichever is earlier.

The Ministry may, upon notification, request any information or data necessary to verify compliance and/or suspend implementation of any agreement pending verification of compliance.

Duration

The exemption is valid for two months from the date of issuance. The Minister may extend this period if exceptional circumstances continue.

Wind-Down Period

Undertakings that benefited from the exemption may continue implementing arrangements to dispose of or sell stocks formed during the exemption period for up to three months after expiry, provided:

• Continuation does not exceed what is necessary for stock disposal;
• All conditions and controls mentioned under the Decision continue to be observed; and
• There is no harm to competition or consumers.

Revocation and Penalties

The Ministry or relevant authority may suspend, amend, or revoke the benefit of the exemption if agreements or practices are found to cause negative effects on competition, consumer interests, or market stability. Violations attract:

• Administrative penalties under Article 23 of the CL.
• Criminal penalties under Article 24 of the CL (fines ranging from AED 100,000 to 10% of annual UAE sales, or AED 500,000 to AED 5,000,000 where sales cannot be computed).

Practical Guidance

This exemption is narrowly drafted and subject to strict conditions. Businesses should note:

• Pricing remains entirely off-limits: No coordination is permissible on prices, margins, discounts, or costs under any circumstance.
• Specific Exemption: Apart from the anti-competitive practices to which the exemptions under the Decision may apply, the CL prohibits a wide range of other anti-competitive practices, including other prohibited agreements, abuse of dominant position, predatory pricing, and abuse of economic dependence. The Decision does not exempt any of these anti-competitive practices.
• Operational cooperation only: The exemption covers logistics, transport, storage, scheduling, and temporary geographic reallocation, but not competitive strategy.
• Notification is mandatory: Failure to notify within 15 working days may itself constitute non-compliance.
• Temporariness is key: Cooperation must cease when circumstances normalize; indefinite arrangements may not be protected.
• Documentation is essential: Businesses should maintain contemporaneous records demonstrating necessity, proportionality, and compliance with all the conditions of the Decision.
• Pre-clear the scope of cooperation internally: Before engaging with competitors, businesses should define in writing the exact scope of coordination, ensuring it is strictly limited to operational continuity and does not drift into commercial strategy or sharing of any information that may affect competition in the UAE markets.

Given the specific scope of the exemption and the significant penalties for non-compliance, businesses should proceed with sufficient care while entering into any agreements to which Article 5 of the CL and/or the exemptions under the Decision may apply. Where there is any uncertainty as to whether proposed coordination falls within the exemption, it is prudent to seek expert guidance or apply for an individual exemption under Articles 9 and 10 of the CL.

 

This update is for informational purposes only and does not constitute legal advice.

 

Faizan Daud Senior Associate faizan.daud@galadarilaw.com