By Andy Sambidge
Law No. 37 of 2009 says jail sentence does not excuse debtors from paying back money.
More details have emerged regarding a new law issued by Dubai ruler Sheikh Mohammad Bin Rashid Al Maktoum in a bid to deter fraudsters in the emirate.
Law Number 37 of 2009 on recovering public and private money obtained illegally states that anyone found guilty will be sentenced to five years in jail if the amount is between AED500,000-AED1 million.
The sentence will increase to 10 years for cases where the amount of money involved is between AED1-5 million while a 20-year jail term will be handed down if the amount exceeds AED10 million, UAE daily Gulf News reported on Thursday.
Article 4 of the law stipulates that anyone convicted of financial crimes "shall be jailed apart from detainees or those convicted in penal cases".
The prison's management shall provide those convicted in line with this law with appropriate means of communication with the outside world to arrange payment of their debts or settlement with debtors, the paper added.
Under Article 5, the debtor will be released before the end of his jail term if payment of all due funds are made or if an "amicable settlement" can be reached with creditors.
Article 6 of the law stipulates that if the debtor is a corporate body, the jail sentence will be issued against the person who decided not to pay the debt.
The law also says that the debtor will not be sentenced to jail if he/she is below 18 years or over 70 years of age.
The exemption will also apply if the debtor submits a bank guarantee or has a capable guarantor accepted by the execution judge to pay the debts according to an agreed schedule. Jail will also be avoided if the debtor's properties can be seized and are sufficient to cover his debts.
The court's jail sentence may be appealed before the court of appeals, provided the appeal does not lead to suspending the implementation of the ruling.
Article 9 stipulates that serving the jail sentence does not excuse the debtor from paying back debts.
I dont get it, is this a law for debt or fraud?
Is it just me or is this a very simplistic law and why, if convicted can you pay your way to feedom? Surely if convicted there should be a personnal debt, I don't mean cash but there should be a rehabilitaion, a cost in personal terms whether it be freedom or requirement to do some good works. These laws seems to be designed for the rich and powerful where everyone may to some exent have their hand in the cookie jar and its not wrong to do something but wrong to get caught. I also note that the guys will not be put into the general prison population, another appeasment to the governing classes? The Dubai Police Chief said he was surprised of the amount of corruption. I find it surprising he finds it surprising. Seek and ye shall find...
How many thousands of investors are wondering the whereabouts of their money paid to developers who don't progress with work, who don't answer any question, and are clearly enjoying immunity. Does Dubai really care for its investors?
So if you loose your job, and you cant pay your debts, and the bank does not want to arrange a amicable solution, you go to jail? My advice - Skip the country and negotiate from the safety of your home country
As debbie pointed out, this seems to cover both debt and fraud - I certainly hope the two are not synonymous. More importantly, it does seem ridiculous that you can buy your way out of a sentence for committing fraud - so basically, if you lied and cheated, you can pay your way out. If you honestly took out loans to fund a venture that went wrong, you go to jail. Oh and you STILL have to repay after serving time for the fact you didnt repay.... The UAE really needs to treat corruption as a real crime, and stop treating debtors as criminals and allow them to work their way out of debt. Otherwise debtors with means will always run away (why would anyone stay?), and cheaters are actually encouraged to do their worst provided they have some kind of a financial backstop.
"Article 6 of the law stipulates that if the debtor is a corporate body, the jail sentence will be issued against the person who decided not to pay the debt." Does this mean that all those with limited liability companies (LLCs, including FZ-LLC) are not actually limited liability at all? That will concern a lot of people (myself included). What happens if the company is registered in another emirate, or overseas? Presumably Dubai law cannot be used against it?