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Changes in criminal liability for cheques with insufficient funds

Just like any other country, the consequence of a returned cheque can be similar in UAE. According to the criminal law of UAE, the country imposes strict criminal charges against people who offer cheques with insufficient balance. 

What is a cheque?

Cheque is an order issued by an individual to a particular bank on a specific date for the payment of a specified amount to another individual.

What is a bounced cheque?

A bounced cheque is also called a dishonored cheque which is returned by the beneficiary.  UAE cheque fails due to the following reasons, 

  • Due to insufficient funds
  • Technical error
  • Closure of bank accounts
Changes in criminal liability for cheques with insufficient funds uae

Criminal liability in UAE

According to article 401, UAE federal penal code states that fine shall be imposed upon anyone, who gives a cheque without sufficient balance or withdrawing all the balance, making it insufficient for the settlement of the cheque. 

In 2017, some relaxations were made regarding the Criminal Liability in Abu Dhabi for cheque transfer worth less than Dh200,000. 

According to the legal liability for cheques with insufficient funds that is around Dh200,000 could get their cases closed by paying fines on their smartphones without reaching the police station. However, in certain cases, the person who received the cheque can still file a case in the court.

What happens in a cheque bounce?

When exactly a cheque is bounced, the person or complainant files a police complaint and the case is forwarded to the public prosecution. 

It’s dealt with legal order or imposing fine at this stage. If the cheque value is more than Dh200,000, the case requires more investigation and finally forwarded to the criminal court. 

According to the criminal law of UAE, the court may convict issuer with two options, either to pay fine amount or go to jail. 

Recent changes in the criminal liability for cheques with insufficient funds

According to the recent decision issued by the Attorney general office in Abu Dhabi, they have made changes in the concerned criminal offences relating to bounced cheques. 

According to decision No.14 of 2020 or Abu Dhabi PP decision issued by the Attorney general office in Abu Dhabi, this includes all the provisions related to the fines for bounced cheques. The Abu Dhabi PP decision is effective from 16-3-2020. 

Cheque amount in AED / imposed fine in AED

50,000                                                         1000

50.001                                                         3000

100001 up to 2000001                           5000

200001 upto 300,000                              10,000

300001 up to 500000                              20,000

According to the changes in criminal liability in UAE, Abu Dhabi PP decision effectively removes criminal consequences attaching to cheques wihtvalue than than 500,000. It issues a no-arrest order against the drawer. 

The Attorney general gives authority to certain members of Abu Dhabi Prosecution to cancel or amend the imposed fine within seven days of issuing such decision. Finally, according to the criminal liability in Abu Dhabi, cheques are generally trusted and utilized for the way cheques are criminally ensured with potential confinement! As per the recent developments, no arrest order will be issued against drawers providing cheques with insufficient amount around AED 500,000 or less. The beneficiaries should focus on all type of security measures wherever possible!

 

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