Is Dishonouring A Cheque A Criminal Offense In UAE?

When writing cheques for payment of a service or product, the signatory becomes liable for the payments, thus making it a criminal offence to dishonor cheques due to insufficient funds.

Under Article 401 of Federal Law No. 3 of 1987 on issuance of Penal Code (the ‘Criminal Law’) of UAE states that “Shall be sentenced to detention or to a fine, whoever draws in bad faith a cheque without sufficient funds or who, after giving the cheque withdraws all or part of the funds, so that the remaining balance is insufficient to cover the amount of the cheque, or gives order to the drawee to stop payment, or if he deliberately writes or signs the cheque in such a manner as to make it non payable. Shall be sentenced to the same penalty whoever endorses to another or delivers to him a bearer draft knowing that it has no available sufficient funds in consideration thereof or that it is not drawable.”

A criminal complaint may be initiated by the cheque’s beneficiary when a cheque they have received is dishonoured, and by launching a complaint they become the complainant in a now legal matter. Depending on the severity of the above complaint, the punishment is at the discretion of the courts, which may either be a fine or detention or both.

In some instances, a travel ban may be imposed on the signatory of the cheque.

For further advice on Financial Crimes or Criminal cases set against you in the UAE, Contact Us at 04 336 8833 or info@alkhoulilaw.com.

 

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