Abdullah bin Touq Al Marri, Minister of Economy, stated that decriminalisation of issuance of cheques without funds, in accordance with Federal Decree-Law No (14) of 2020 amending certain provisions of the Commercial Transactions Law, is an essential step in developing and enhancing the flexibility of legislation regulating economic, business, trade and investment activities in the UAE. It will also reinforce the principles of justice, fairness and equal opportunities in commercial transactions and the business environment in the country, and contribute to enabling sound commercial practices at both individual and institutional levels.
The Minister of Economy explained further that amendments that lift penal protection of the cheque, scheduled to come into force at the beginning of 2022, are part of a series of efforts undertaken by the UAE over the past months to accelerate economic recovery, particularly in the private sector activities, and to bring about qualitative transformation of the current economic model, based on the principles of pro-activity and sustainability. These efforts also include enhancing the flexibility of economic policies and raising the UAE’s ranking in the Global Competitiveness Index, associated with the ease of establishing and doing business, and increasing the country’s attractiveness to foreign direct investment and international companies. This move keeps pace with latest global trends on digital transformation, modern digital payment systems and advanced financial technology, supports the continuity and growth of economic activity, increases confidence in the business environment, and provides rapid, advanced, civil alternatives to commercial and financial transactions.
Bin Touq added, “The decriminalisation of cheques issued without funds and confining criminalisation to cases of fraud, forgery and bad faith, while creating more efficient and effective legal mechanisms for collecting the cheque value, contributes to maintaining economic dynamism and diversity, the effectiveness of the judicial system and the efficiency of the commercial environment in the nation, by revitalising commercial dealings and protecting existing companies, especially start-ups and SMEs. It also avoids the negative consequences of criminalisation for returned cheques without funds, and the back-log of related cases before the courts to resolve debts that affect the financial, banking and commercial sectors in the country negatively.”
Abdullah bin Sultan bin Awad Al Nuaimi, Minister of Justice, stated, “Within the framework of the UAE’s keenness to improve the business environment and the legislative and judicial structure to boost competitiveness at both regional and international levels, reinforce its attractiveness to foreign investment and to enhance national economic resilience to achieve the UAE’s strategic vision in this field, amendments introduced to the Federal Commercial Transactions Law on the procedures regulating use of cheques, collection of their value and penalties, have been unified in one law. Criminalisation has been confined to cheque forging and their illegal use, deliberately writing or signing cheques in a way that render them unpayable, the criminalisation referred to in the Penal Code on issuing cheques without funds, or the phenomenon known commonly as returned or ‘bounced’ cheques, was cancelled, similar to adopted practice in a large number of jurisdictions, such as France and the United States of America.”
