Decision to decriminalise security cheques only applies to Emiratis

Emiratis who bounce security cheques will no longer go to jail - but the rule does not apply to expatriates, the UAE government has confirmed.

A royal decree was issued in October last year to decriminalise bounced security cheques written by Emirati citizens and to settle debtors' outstanding bills.

Earlier this week, local newspapers reported this rule would also apply to expatriates.

But state news agency WAM issued a statement on Wednesday saying the fund will only settle "the debts of Emiratis".

WAM reported: "The Higher Committee of the Nationals Defaulted Debts Settlement Fund today said that the Fund, in line with directives from President His Highness Sheikh Khalifa bin Zayed Al Nahyan, is concerned only with settling all the debts of only Emirati citizens, whether detained or convicted, and are settling their debts according to payment schedules set by courts."

“The Fund will apply only to UAE citizens, and not others, and this includes the President’s directives to decriminalise security cheques presented by UAE citizens to banks and financial firms,” the WAM statement added.

In the UAE, businesses and individuals often use post-dated cheques as a guarantee by  for everything from apartment rentals to multi-billion dollar deals.

Local newspapers had quoted an official at the Ministry of Justice as saying the public prosecutions had "released expatriate detainees, as has been the case of their Emirati counterparts who were freed last October."

According to the official, under the new rule "all defaulters including citizens and foreigners arrested or convicted for presenting dishonoured security cheques must be freed."

Lenders can still pursue civil cases to claim their dues from dishonoured cheques.

According to Gulf News, UAE Central Bank statistics show that of the 28.5 million cheques worth AED 1.2 trillion written in 2011 in the UAE, 1.6 million cheques worth about AED 55 billion bounced.