2022 INTERPOL red notices UAE bounced cheques - end of an era?
The so-called ''bounced cheques'' cases concern INTERPOL red notice removal cases, in which our law firm has successfully assisted many clients for many years. In particular, the number of cases in which a red notice was issued by the United Arab Emirates (UAE) was very significant. The Commission for the Control of INTERPOL's Files (CCF) has decided in the vast majority of cases that the INTERPOL data should be deleted in response to our extensively substantiated red notice removal requests.
Uttering an unfunded cheque in bad faith - lack of criminal intent, lack of criminal behavior
These bounced cheques INTERPOL alerts concern cases in which our clients were charged or in many cases had already been convicted in absentia for ‘’uttering an unfunded cheque in bad faith’’ as meant in Article 401 of the Criminal Code of the United Arab Emirates (UAE).
Many people were shocked to discover, often after an unsuspected arrest in a foreign country, that they had been sentenced to several years imprisonment without ever being informed of any criminal charges at all.
Where clients sought legal assistance in time, we were often able to ensure that:
- extradition to the UAE was prevented and;
- the UAE INTERPOL alert was deleted by the CCF at our request.
The arguments presentend by our law firm to the CCF include, among other arguments:
- no criminal behavior and no criminal intent can be identified; the inability to pay a debt arises often from the fact that a company has found itself in difficult economic circumstances (insolvency) or that an individual has lost his/her employment;
- the International Covenant on Civil and Political Rights stipulates in Article 11, “No one shall be imprisoned merely on the ground of inability to fulfil a contractual obligation,” which would include debt;
- Fact Sheet No. 26 of the UN Working Group on Arbitrary Detention states, “[…] there are deprivations of liberty which are per se prohibited, such [as] imprisonment for debt”;
- Article 14 of the Arab Charter of Human Rights states: ‘’No one shall be imprisoned for proven inability to repay a debt or another civil obligation’’;
- The applicable INTERPOL regulations limits the use of red notices for serious ordinary-law crimes, and excludes offences which are derived from private disputes, unless they were aimed at facilitating a serious ordinary-law crime;
- most INTERPOL Member Countries do not qualify the mere act of issuing an unfunded cheque as criminal, and an inability to repay a debt has been decriminalized in most national legal systems;
- the offense of “issuing an unfunded cheque” is seldom recognized as a crime and extraditable offence in many national systems; the lack of dual criminality would prevent most national authorities from the extradition of, or similar lawful action concerning, a wanted person for such a case;
- recent legislative changes in the UAE indicate a trend toward the decriminalization of cases of certain unfunded cheques and their re-categorization as finable misdemeanours; and;
- the criminalization of the underlying act in the UAE applies to non-nationals only.
The argumentation as mentioned above has been adopted by the CCF in their INTERPOL red notice removal decisions.
The decriminalization of the bounced cheques cases - Article 401 of the UAE Criminal Code no longer exists
The UAE authorities have recognized that the criminal law approach followed by the UAE was no longer tenable. The UAE eventually decided to decriminalize the bounced cheques cases. After a transitional period of more than one year, so that financial institutions / the parties involved could adapt to the new situation of decriminalizing bounced-cheque-offenses, the offense of ''uttering an unfunded cheque in bad faith'', ex Article 401 of the UAE Criminal Code is no longer a criminal offense in the UAE. Article 401 of the UAE Criminal Code has been abolished as per 27 September 2020. The new bounced-cheque-legislation, part of the UAE Commercial Transaction Law, will come into effect as per 2 January 2022.
The UAE issued a new Federal Decree No. 14/2020 (The decree) amending and adding several Articles to the Commercial Transaction Law No. 18 of 1993 (CTL). The majority of the amendments deal with the commercial cheque rules. The decree cancelled the Articles No. 401, 402 and 403 of the UAE Criminal Code, which used to penalize the issuance of cheques with bad faith or insufficient funds. The bounced cheques cases has thus been decriminalized to a large extent.
According to the amended UAE legislation, criminal behavior can only be concluded if the behavior meets the requirements of specific concrete facts and circumstances, which facts and circumstances must be specified.
Before the issuance of the above-mentioned new law, the phrase ‘’issuance of a cheque in bad faith’’ as meant in Article 401 of the UAE Criminal Code gave the UAE a very wide margin of interpretation. It was not specified what the content of ‘’bad faith’’ entailed. The new decree added Articles No. 641(1)(2) and (3), that if committed by the drawer, will consider a crime of a bounced cheque punishable by a criminal sanctions.
As per 2 January 2022 criminal sanctions (read the decree) may only be used in case of the fraudulent use of cheques by:
- ordering the bank not to pay the cheque amount;
- withdrawing the account balance prior to the date of the cheque to prevent encashment;
- forgery of cheques;
- cheque (signature) falsification.
The changes in the UAE legislation highlight the clear intention of the UAE legislator to cancel the infamous crime of a bounced cheque for no sufficient funds in the UAE.The decree further introduces a new Article No. 635 and amends Article 617 of the CTL, which aims primarily to avoid criminal lawsuits and facilitate alternative procedures for the beneficiary of the cheque to claim its value.
What does this mean in practice, as per 2 January 2022, for many of our clients who live outside the UAE and who have been subject to a red notice?
The office of the Attorney General of Dubai issued Circular (9) of 2021 (read in English and Arabic) on the 19th of December 2021, concerning disposing of cases for giving a cheque in bad faith and refusing to pay, in which the criminalization is abolished. The Attorney General refers to the change of the UAE bounced cheques legislation of discussed above. The Attorney General of the Emirate of Dubai explains what these changes regarding the decriminalization of unfunded cheques cases entail in the following situations (English translation from original text in Arabic):
Clause (1) Penal reports for crimes (giving a cheque in bad faith) that are registered in police stations:
General Department of Criminal Investigation is addressed to circulate to all police stations to discontinue the criminal reports for the crime of giving a cheque in bad faith for which the legislator dropped the criminalization, cancel all circulars issued thereof, and stop searching for the accused and discontinuing the reports.
Clause (2) Disposing of cases of (giving a cheque in bad faith) under investigation:
1. Disposing of cases of giving a cheque in bad faith by discontinuing and administratively closing in the event of investigation is not initiated and order that there is no reason to file a criminal case in the files that have been investigated, taken into account the issuance of a cease search for the accused and the release of those held in preventive detention, unless they are imprisoned or wanted for other reasons.
2. Issuing an order that there is no reason to file a criminal case in the cases under investigation for which an international arrest warrant is issued, and the issuance of a cease search for the accused. The Head of the District Prosecution Office shall request a statistic with the numbers of the criminal cases for which an international arrest warrant had been issued during the investigation phase to take the necessary action in their regard.
3. The Prosecutor continues to investigate and dispose of other cheque crimes that are still punishable, as well as those that were created in accordance with the usual procedures for investigation and disposal of the criminal case.
4. Presenting the criminal cases that the Prosecutor sees as obstacles in disposing of them to the Judicial Audit Unit for opinion.
Clause (3) Cases of (giving a cheques in bad faith) under trial before the Court of First Instance:
The request of the Public Prosecution before the Court of Misdemeanors and the violations considering the cases, including the appeals to the first instance judgments in absentia, shall be substantiated by the following: ‘’The Public Prosecution requests the innocence of the accused for the issuance of a law that is more suitable for the accused to decriminalize giving a cheque in bad faith in the subject of the case by Federal Decree-Law No. 15 of 2020 regarding the Commercial Transactions Law’’.
Clause (4) Cases of (giving a cheque in bad faith) presented before the Appeals and Cassation Prosecutions:
The Prosecutors of Appeals and Cassation shall take into account the following:
1. Appeal against judgments of conviction in cases of giving a cheque in bad faith during the prescribed period for appeal, whether from the Courts of First Instance or the Court of Appeal by way of appeal established by law, as the case may be, by requesting the annulment of the appealed judgement and rule by acquitting the convict due to the issuance of a law that is more suitable for the accused to decriminalize giving a cheque in bad faith in the subject of the case by Federal Decree-Law No. 14 of 202 regarding the Commercial Transactions Law.
2. Evidence of the Public Prosecution’s request in the appeals filed by the convicted person before the Court of Appeal or the Court of Cassation, depending on the circumstances as follows: ‘’The Public Prosecution requests the innocence of the accused for the issuance of a law that is more suitable for the accused to decriminalize giving a cheque in bad faith in the subject of the case by Federal Decree-Law No. 14 of 2020 regarding the Commercial Transactions Law’’
Clause (5) Cases of (giving a cheque in bad faith) judged by final or irrevocable rulings:
The Execution Department shall establish a mechanism, in coordination with the Technical Office of the Attorney General, to issue amended execution orders that include stopping the search for those convicted in cheques cases in which judgments of conviction were issued in absentia or final, and the methods of appeal established for the Public Prosecutions have been exhausted, or for which judgments have been rendered unimplemented, due to the issuance of a law that is more suitable for the accused to decriminalize giving a cheque in bad faith in the subject of the case by Federal Decree-Law No. 14 of 202 regarding the Commercial Transaction Law.
Clause (6) Penal judgments and orders issued in cases (giving a cheque in bad faith) under implementation:
The Execution Department shall establish a mechanism, in coordination with the Technical Office of the Attorney General, in cases (giving a cheque in bad faith) in which conviction sentences are under execution, whether for a penalty restricting freedom or the execution of physical coercion for a fine imposed by a final judgment or a penal order, as the case may be, regarding the convicts, inmates of penal institutions, to release the convicts as per 2 January 2022 by issuing amended executive orders to release the convicts, stop searching for him, and drop the travel ban unless he was convicted, imprisoned, or wanted for another reason, due to the issuance of the law that is more suitable for the accused by abolishing the embodied punishment that he executed.
Clause (7) Criminal orders in absentia that are not executed, issued in cases (giving a cheque in bad faith):
The Execution Department shall establish a mechanism, in coordination with the Technical Office of the Attorney General, in cases (giving a cheque in bad faith) in which unimplemented criminal orders in absentia have been issued since start of the application of the penal order until 31 December 2021, and assigning the Execution Department to issued orders to stop research and drop the travel ban in those cases, due to the issuance of the law that is more suitable for the accused by abolishing the embodied punishment that he executed.
Clause (8) Reports and criminal cases for non-payment offenses:
The provisions contained in the cases of (giving a cheque in bad faith) referred to in the previous Clauses shall apply to all reports and criminal cases for non-payment offenses and the judgments issued therin in accordance with the conditions stipulted in this circular.
Clause (9) Enforcement:
The Decree-Law shall take into effect on 2 January 2022.
Attorney General of the Emirate of Dubai
Important steps have been taken by the UAE legislator to decriminalize the regular bounced cheques cases, the regular security cheques cases, unfunded cheques cases where no criminal behavior can be named and described.
Be aware that specifically described behavior concerning unfunded cheques still remain punishable in the UAE.
In any case, the changes in UAE legislation that have come into effect as per 2 January 2022 are of great importance to many of our clients who are confronted with an INTERPOL alert. The practical implementation may differ per Emirate.
New obstacles, new problems and/or disputes about the implementation of the amended UAE legislation cannot be ruled out in the future. The above is a summary and an overview of the new and amended UAE legislation.
It's not legal advice in any way.
The aforementioned explanation about the UAE legislative changes was published by me on the 2th of January 2022. The future will show whether the UAE authorities actually implement the aforementioned approach immediately and in full.
If you have questions about the status of your own UAE bounced cheque(s) case(s), we advise you to consult your UAE lawyer.
If you have questions about how to delete an INTERPOL alert issued against you, we may provide legal assistance and, if necessary and possible, submit a CCF request for the deletion of INTERPOL data.
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