ABU DHABI Jan 3 Foreigners still risk being
imprisoned for bouncing cheques in the United Arab Emirates, as
a government order which decriminalises the offence applies only
to local citizens, an official statement said.
The statement was issued to clarify contradictory reports in
local media, after some reports this week said foreigners no
longer faced criminal penalties for writing cheques that
Post-dated cheques are frequently used in the UAE as
guarantees by businesses and individuals, for everything from
apartment rentals to multi-million dollar deals. Bouncing the
cheques is a criminal offence rather than merely a civil one.
The UAE's tough penalties for defaulting on cheques were
relaxed for local citizens in October after a royal decree was
issued, but the threat of jail remains for the country's large
A debt settlement fund launched by the government is
"concerned only with settling all the debts of only Emirati
citizens", state news agency WAM quoted the government statement
as saying late on Wednesday.
"The relevant mechanisms set by the fund for this purpose
apply only to relevant UAE citizens, and not others, and this
includes the directives...to decriminalise security cheques
presented by UAE citizens to banks and financial firms."
Last July, a British businessman who spent nearly three
years in a Dubai jail was released after his conviction for
bouncing cheques was overturned. He had gone on a seven-week
Decriminalising bounced cheques would be an important
economic reform, reducing risks for entrepreneurs and small
businessmen, some economists believe.
The UAE has been planning other steps to ease legal pressure
on businesses; new legislation aimed at simplifying the process
of bankruptcy and allowing failing companies to restructure is
expected in 2013.