uae expats may still be charged for bad

Expatriates who bounce cheques in the United Arab Emirates will still risk criminal charges, the Government has said, clarifying a matter that had been unclear in recent days, in the wake of conflicting media reports.

uae expats may still be charged for bad

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In a statement posted yesterday on the Government’s official news website, WAM, the so-called Higher Committee of the Nationals Defaulted Debts Settlement Fund said it existed to help “only Emirati citizens” with the settling of outstanding debts, not foreigners living in the UAE.

“The relevant mechanisms set by the [defaulted debts settlement fund]  for this purpose apply only to relevant UAE citizens, and not others, and this includes … directives by [the president] to decriminalise [bounced]  cheques presented by UAE citizens to banks and financial firms,” the statement, which may be viewed by clicking here, added.

The matter was widely covered in recent days by such publications as the Gulf News, Arabian Business and Arabic-language media, after it appeared that the UAE was to end the threat of prison for expats whose cheques bounced.

Cheques are widely used in the UAE, with tenants typically giving their landlords a packet of already written out and dated cheques at the beginning of the year. AES Interntional chief executive Sam Instone says his clients are too affluent to have ever ended up in prison over a bounced cheque, but adds that all UAE residents are well aware of the seriousness with which cheques are taken there: "A cheque is a promise to pay, it is seen as someone’s word."

AES pays the rent on its Dubai offices by cheque, in the form of an annual set of four cheques, one for each quarter, according to Instone.

The head of another advisory firm based in Dubai that also specialises in looking after expatriates said he did not expect the Emirati authorities to reduce the seriousness of bouncing a cheque in the UAE "for some time", because, in a country in which the majority of residents are expatriates, the threat of detention, and thus being unable to leave the country in order to flee one’s financial obligations, is seen as an effective way of ensuring people do not run up debts and then disappear.

The result, though, he adds, is that "there are many expats who have – and are still in custody for – bounced cheques", because it is "down to the principle" rather than the amount of money at stake.

"Some are the headline realty stories, but some are  detained for less than 20 quid," he adds.

"Most lending, [including] mortgages, will require a security cheque, since if one does not pay, they simply present the blank cheque, it bounces, and a criminal case then ensues.”

According to Arabian Business, the uncertainty over the matter began on Monday, when the Arabic daily Al Ittihad  quoted  Ali Khalfan Al Dhaheri, head of the legal affairs department at the Ministry of Presidential Affairs,  as saying that “bouncing a cheque would no longer be a criminal offence for expatriates”.

“In line with the directives of Sheikh Khalifa… and in the spirit of fairness and equality, the courts have stopped as of last month accepting collateral cheques presented as a criminal tool against expatriate debt defaulters,” he was quoted as saying.

Other sources, including the English-language Gulf News, took another view. “There is no relaxation or debt waiver for expatriates,” deputy minister of Presidential Affairs Ahmad Jumaa Al Zaabi told the newspaper.

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