Bounced Cheque

First:Criminal

Procedures:

• The UAE legislator abolished the criminalization of issuing a cheque not matching the signature or issuing an order to prevent its disbursement and without balance, except in the event that the bad faith of its drawer of the cheque was proven, the new penalties include confiscating the chequebook from the drawer, preventing him/her from giving obtaining chequebooks for a period of up to 5 years, stopping the professional or commercial activity. Decriminalization of bounced cheques enhanced the flexibility of economic transactions and encourage foreign investment, while the legislator has found more effective and quick methods to protect the beneficiary.

Second:Precautionary

Measures:

• The payee of a cheque bounce has the right to obtain a precautionary order on the cheque drawer’s accounts, properties, movables, etc., as well as requesting to impose a travel ban against him/her.

Third:Objective

Procedures:

• The recent legislative amendments to the Commercial Transactions Law set out new alternatives and mechanisms to ensure the collection of the value of the cheque in the fastest and simplest possible way, including obligating the bank to partially pay the cheque after deducting the entire amount available in the account of the drawer of the cheque, also the new law enables the payee to approach the court & execution judge to order payment of the cheque ’s value, by placing the executive formula on the bounced cheque.