Bad cheques still a criminal offence for UAE expats

Clarification follows reports foreign nationals will not be punished for bounced cheques
(Image for illustrative purposes)

(Image for illustrative purposes)

Expatriates in the UAE will not be exempt from criminal charges for bouncing cheques, authorities said, clarifying media reports that foreign nationals who write bad cheques will no longer be punished.

The Higher Committee for Debt Settlement Fund for Nationals said it will only settle bad debts for Emirati citizens and not foreigners living in the Gulf state.

“The mechanisms set by the fund will apply only to UAE citizens, and not others, and this includes the President’s directives to decriminalise [bounced] security cheques presented by UAE citizens to banks and financial firms,” a statement on state news agency WAM said.

“The prosecution shall suspend all criminal cases and the courts shall dismiss all cases in connection with security cheques presented by Emiratis,” it added.

The statement comes days after local media printed contradictory reports on whether the UAE was ending prison terms for expatriates that write bad cheques.

Arabic daily Al Ittihad on January 1 said bouncing a cheque would no longer be a criminal offence for expatriates, quoting Ali Khalfan Al Dhaheri, head of the legal affairs department at the Ministry of Presidential Affairs,

“In line with the directives of Sheikh Khalifa... and in the spirit of fairness and equality, the courts have stopped as of last month accepting collateral cheques presented as a criminal tool against expatriate debt defaulters,” he told the newspaper.

“Federal public prosecutions in the country have, indeed, released expatriate detainees as has been the case of their Emirati counterparts who were freed last October,” added Judge Jassem Saif Buossaiba, head of the judicial inspection department at the Justice Ministry.

Gulf News however denied the report. “There is no relaxation or debt waiver for expatriates,” deputy minister of Presidential Affairs Ahmad Jumaa Al Zaabi told the newspaper.

Cheques are used in the UAE to underwrite credit cards, loans and guarantee future payments and bouncing cheques is a criminal offence and not a civil one.

Authorities in October relaxed the penalties for Emiratis who write bad cheques and in November freed around 290 UAE nationals who were in prison for bouncing cheques.

UAE President Sheikh Khalifa Bin Zayed Al Nahyan in May allocated around AED5m to settle defaulted loans for each indebted Emirati. In August, the Central Bank ordered banks to extend maturities on personal loans held by Emiratis by more than four years.

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Posted by: Muawiah itum

As a bank you give a loan to people without guarantees then you should be responsible for your loan you gave out.You give a loan for a car follow up step by step once defaulted confiscate that car our house the same month loan is defaulted. Don't give 2000,000 DH personal loan for 10,000 DH salary.No body can guarantee his job nor his health nor his circumstances.
Banks know that 80% of their loans are without guarantees ,yet they still hand them out.well,they want to gamble for profit they can but they should not ask the country to fill prisons with people defaulted in their loans.It is not a good image for the country and it cost the country a great deal to run prisons.

This is the issue it self that caused the world economy to collapse and started at USA banks and house industry in the early of this decade

Posted by: Ron Bagnulo

I feel Sam?s pain. Traffic cops in the U.S. are ?strict? in enforcing the law of the road in order to protect. These men and woman on the whole conform to and uphold a certain professionalism that can be interpreted as ?rude? behavior. But, I assure you it is not.
Thankfully Sam, there are trade-off?s that can counter this perceived rudeness; and this is what makes America great. Unlike Dubai, you can legally flip the cops the bird without fear of recrimination. A U.S. Court of Appeals has ruled that motorist cannot be pulled over for giving the cops the finger. According to the court ruling, such an insulting gesture is not grounds for ?reasonable suspicion that criminal activity or traffic violation is afoot.? Now, that?s what I call progress.
On the other hand, peacefully protesting on Wall Street is enough to get you investigated by the FBI, and get doused with pepper spray and jammed in the guts with a nightstick. But, that?s another story, for another day.

Posted by: ANGEL WOOD

It is very clear that there is an attempt to delibrately confuse the people. The news in the Al Ittihad clearly stated that Cheqe bouncing will no longer be treated as criminal for both nationals as well as expats. This was a very positive step taken by the U.A.E. Government allowing the defaulters to be able to live like human beings with their families work and pay off the debt they had taken. Every individual whether national or expat has to be treated in a humane manner. Putting the person in jail, destroying his family, his work an then you expect him to pay.
The U.A.E. Constitution does not discriminate between national or expats. Everyone i to be treated equally. Moreover ther is no debt settlement in thecase of security or guarantee cheques. The debt settlement programme for which the President has alocated funds do not pertain to security or guarantee cheques given to banks/others. They refer to different form of debt.

Posted by: Red Snappa

The most obvious flaw in the system is that loan guarantee cheques are usually for the full amount of the loan, therefore encashment in the event of default takes no account of the residual amount outstanding, or say in the case of a car loan, the written down repossession resale value of the vehicle.

PDC's are not generally issued in bad faith, as in many cases there is no way of forecasting that an individual will fall on hard times or that expected payments to them will fail to materialise.

Sure if you issue a cheque there and then for the full value of something that you have taken delivery of without the funds in your account then it's fraud, but sensibly delivery should be witheld until the cheque has cleared. Irrelevant of nationality!

A proper and comprehensive credit checking system, would reveal whether a loan candidate is already over exposed financially and the historic profile of his or her bank balance.

Jail denies an individual the chance of working to repay debt!

Posted by: Michael Abdullah

I am surprised how in-humane the legal system exercised not only in the Gulf but All Arab/Muslim Countries still exists today.

A typical hypocritical system shall once again Jeopardize the economical & financial status of the whole region.

This is against the Financial International Regulation Acts of Debt Recovery systems and will definately force all Expatriates to leave your countries soon.

Now, Let's look at the outcome of such modernized slavery system and it's impact due to lack of leadership & managerial knowledge to properly regulate economical situations. It is very sad to see this happen in my homeland Dubai.

I am no longer living there, neither proud to hold such a passport.

Posted by: Sam from Canada

@ John
I know Zuckerberg was also a founder, (as was Eduardo), so let us not demean Eduardo's role in FB. Also, you say that in the US "Equality exists", u also call it the wealthiest nation on Earth and other tall claims. All I can say is GOOD LUCK to you. Let me know when you wake up.

Pls be yourself - realistic! U claim I went on a anti-US rant - and hence you know my character. Not only is this derisory, it also stinks of the sick Neo-con "with us or against us" mindset. I was only stating facts, but you are free to keep your eyes closed and be in denial of facts.

Also, if I had earned billions and were asked to pay up most of that in taxes, I would dump my passport too for one of a more sensible and fair jurisdiction. Has NOTHING to do with Eduardo's commitment to the country. Also, may be difficult for some to comprehend, but commitment to the US is NOT a God-imposed law, (that you make it sound like).


Posted by: realiste

Your comments on cheques were totally wrong about the US. So you then went on an anti-US rant and still you are at it. So we know your character.
BTW the only reason Saverin gave up his US passport is that he was due to pay tax on the monies he earnt. Nothing more, nothing less. So his commitment to the country was fake from the beginning.

Posted by: john


First of all Mark Zuckerberg is the founder of facebook. Eduardo helped him but was not the main founder. Second, Eduardo gave up his US citizenship to avoid taxes. Third, his family emigrated to the US because they wanted a safer place for their son who was on a list of kidnappers for ransom.

Why is the US citizenship is the most distinguished in the world? It is because you live in a place where no one can judge you for your race, religion, color or nationality. Equality exists. You will live and excel based on your qualifications only. Besides, you have rights and freedom. Where in the world can you find them?
Moreover, you will be living in the wealthiest country in the world and the strongest military and the biggest economy where you will have more opportunities. You said many people gave up their US citizenship, I would like to remind you that millions of people are giving up everything just to emigrate to the US. This is the land of opportunities.

Posted by: Sam from Canada

Can you please verify your claim the the American Passport is "the most distinguished passport in the world". If that were the case, you would not have an increasing number of citizens dumping this passport in favor of other passports.

Facebook founder Eduardo Saverin is not the only high profile guy to have done this. Shaikh Google will help you identify many more :)

The fact is that the US passport is a LIABILITY - in terms of tax, in terms of personal security, and even in terms of one's pure ethics/morals (where these exist).

As the movement "Not in our name" rightly declares, MOST of the stuff US Foreign Policy does in the name of American citizens it is supposed to represent, has NOTHING to do with what the average American citizen would want them doing.

Also, ever gotten stopped by a US traffic cop? Compare that with a Dubai traffic cop. If u cant appreciate the world of difference, and how rude the US cops are - then I guess good luck to u. I rest my case.

Posted by: john

Sue is absolutely right. Giving a bad check for goods you bought is fraud and not a security check like the case in the UAE. You have to difrenciate between the two cases. Besides, criminilizing expats and not nationals is pure discrimination.

Moreover, whether you want to hold a US passport or not, it is still the most distinguished passport in the world.

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