From January 2, 2022, a new law came into effect in the UAE, which decriminalised cases of bounced cheques – with a few notable exceptions – thus amending a previous law, which stipulated that anyone who issues a cheque which is not honoured can face criminal proceedings.
The law – Federal Decree Law No. (14) of 2020 Amending Certain Provisions of the Federal Law No. (18) of 1993 Concerning the Commercial Transaction Law – was issued by President His Highness Sheikh Khalifa bin Zayed Al Nahyan on September 27, 2020.
The new law in question is Federal Law No. 14 of 2020, which makes path-breaking amendments in relation to the dishonour of cheques and limits the options for filing a criminal action for a bounced cheque. The law de-criminalises bounced cheques – except specific cases related to forgery, ‘stop payment’ instructions, etc. – and is in force since January 2, 2022
The long-awaited reform to the bounced cheque crime in UAE will come into force in January 2022. The new amendment will waive the criminal liability of the bounced cheque for no sufficient funds. This will help to boost business between individuals and corporate. The provisions in the latest amendment will provide clarity to the bank concerning the procedures and processes associated with the criminal acts. It will also help them to amend their banking policies. The new amendments will reduce the negative aspects of dealing with cheques compared to international practices.