x Abu Dhabi, UAEMonday 24 July 2017

UAE President orders Emirati cheque bouncers to be freed or pardoned

Hundreds of Emiratis have been freed from prosecution over bounced cheques, or had their convictions for the offence pardoned, by order of the President.

ABU DHABI // Hundreds of Emiratis have been freed from prosecution over bounced cheques, or had their convictions for the offence pardoned, by order of the President.
Sheikh Khalifa yesterday ordered all Emiratis who have been jailed or convicted over bounced security cheques to banks or financial companies be released immediately.
The decree also exempts nationals from future prosecution, the state news agency Wam reported.
"Everybody is happy," said Ali Al Nuaimi, secretary of the Federal National Council's finance and economic affairs committee. "This represents how the President is like a father and feels for his children."
Mr Al Nuaimi had earlier called on the Governor of the Central Bank to introduce credit checks and stop banks taking advantage of Emiratis.
"Loan campaigns and promotions are made to be very attractive," he said. "Some Emiratis come to banks to get loans for business, leisure, travelling, any activity. The debt piles up."
Mr Al Nuaimi said Emiratis were partly at fault for not planning properly. "This is the reason a lot are unable to pay these debts and come to government for help."
Last year, Sheikh Khalifa ordered the creation of a Dh10 billion fund to help nationals in debt. So far it has helped 7,200 people with debts totalling Dh2.5bn.
Three years ago a court ruled that those who issue dishonoured cheques must be convicted, regardless of the cheque's purpose.
Khaled Mustafa, an Abu Dhabi lawyer of 10 years, said that before that ruling, "judges would look at the reasons why the cheque was written. If it was for security purposes, the defendant would be acquitted".
That led to some problems, Mr Mustafa said.
"Some people would bring witnesses and say all cheques were insurance cheques in order to be acquitted," he said.
But since the Cassation Court ruled all cases should be treated the same, judges are only concerned with whether the cheque was written and signed by the defendant.
That created more problems. If there was a hitch with payment, banks could cash - and therefore bounce - the security cheque and take the borrower to court.
"That means they would lose their jobs as well and so be unable to pay the debt, so they suffer from a double loss," Mr Mustafa said.
Hamad Al Rahoumi, an FNC member from Dubai, welcomed the decision but said banks also needed to change their lending systems.
Mr Al Rahoumi said banks took advantage of Emiratis because "they know they would not leave the country and run away from the debt".
"Emiratis should not be allowed to take out more than what they can pay off," he said.
Mr Mustafa said bounced cheques had been a long-running problem in the UAE, and the biggest cause of conviction for nationals.
"You hardly see them involved in criminal cases, they are mostly money-related issues," he said.
Salwa, an Emirati lawyer whose son was jailed for a dishonoured cheque, was happy to hear the news. "This is a great Eid gift," she said.
Although it is unknown how many Emiratis will be affected, lawyers said it was likely to be in the hundreds. Mr Al Nuaimi was also unsure of the number but said they were many.
According to the Central Bank, 1.5 million cheques worth a total of Dh55.3bn failed last year, although it is unclear how many did so for technical reasons such as rips or missing details.
osalem@thenational.ae
* With additional reporting by Gregor Stuart Hunter
 
osalem@thenational.ae