Decriminalisation of rubber cheques from 2nd Jan

Eudore R. Chand

ABU DHABI 28 December 2021: The Central Bank of the United Arab Emirates has stated that the new amendments on cheque provisions shall take effect from 2nd January 2022.

The apex bank issued a detailed statement on these new amendments that come under the Federal Decree-Law No. 14 of 2020 dated 9/27/2020, whereby some provisions of Federal Law No. 18 of 1993 promulgating Commercial Transactions Law (the Law) shall be amended.

The clarification issued by the CBUAE aims to raise cheque users’ awareness on the decriminalisation of issuing a cheque without sufficient fund; raise cheque users’ awareness on the criminalisation of refraining from partial payment of the cheque’s amount; and boost cheque users’ awareness on tougher administrative penalties for issuing a cheque without sufficient fund.

The apex bank noted that the Commercial Transactions Law has been amended in accordance with best practices to keep pace with international developments. It also aims to develop a tight legislative framework for these transactions to govern dealing in cheques in such way as to ensure that it plays its role as a payment tool, in place of cash.

Generally, the new amendments to the Penal Code decriminalise several cheque-related issues, especially issuing a cheque without a sufficient fund, and introduce amendments and new legal provisions Chapters (Three) related to the cheques contained in Book Four of the Federal Commercial Transactions Law, to achieve the following objectives:

  • Reducing the negative practical aspects of dealing with cheques, in light of the best and most successful international practices.
  • Consolidating the principles of justice, fairness and equal opportunities, by balancing the interests of the beneficiary (in fulfilling their rights in the fastest way possible) and the interests of the drawer (in terminating the criminal case against them upon payment).
  • Maintaining a solid national economy and a judiciary system based on efficiency and quality; and boosting the rule-of-law and international competitiveness indicators, in line with the state’s general vision and strategy.

With regards to the most important features and most prominent provisions contained in the amendments, the bank said that some crimes were retained to achieve the desired objectives of decriminalisation and its replacement by some civil measures. The cases of criminalisation and fraud related to cheque were listed as follows: – Cases of fraud when issuing the cheque: including requesting the bank not to cash the cheque before the due date without a legal reason (i.e. in cases other than those stipulated in Articles (620) and (625), where the cheque has been lost, or the bearer was declared bankrupt).

  • Criminalisation cases related to fraud and misuse of cheques.
  • Closing the account, or withdrawing the entire balance before issuing the cheque or before presenting it to the bank for cashing, or if the account was frozen.
  • Intentionally writing or signing the cheque in a way that prevents its cashing.

Under the new amendment (Article 641 2), current cheque criminalisation in the Penal Code has been abolished, especially with regard to issuing a cheque without a sufficient fund, except for cases stipulated in the Law.

Criminalisation has become limited to the cases mentioned above.

Insufficient Funds [next page]