LEGAL ADVICE UAE
Until recently, the UAE’s rules stated that bounced checks constituted a criminal violation. The trustworthiness of this method of payment was harmed. In circumstances where there was no cash, the judicial process to resolve things took much too long. As a result, many no longer accept cheques as payment. The UAE Bounced Cheque Law is being modified to provide individuals with additional options.
This article will teach you all you need to know about the UAE Bounced Cheque Law and how it will change in 2022. This move will have a significant influence on both the business and general public sectors. Banks will have less tools for managing check payments from January 2, 2022.
What exactly is a bounced check?
When did the UAE make the decision to modify the law?
What are the distinctions between the old and new laws?
How do I handle a bounced rental check?
When was the last time I could pay a fee for a bounced check?
1. What exactly is a bounced check?
Cheques are instruments that allow people to pay large bills without carrying cash. Unfortunately, occasionally issuers release cheques even when they do not have the required amount of money in their account. Previously, this was a grounds to launch a civil complaint in Dubai for cheque bounce.
In such circumstances, the UAE Bounced Cheque Law mandates the following method. The Federal Law of 1993 has recently undergone various amendments regarding the legalization of rejected checks.
When it comes to financial law, relying on a team of Connect Legal lawyers is a prerequisite. This expert legal staff will ensure that you remain within legal boundaries in all of your financial dealings.
2. When did the UAE make the decision to modify the law?
His Highness Sheikh Khalifa bin Zayed Al Nahyan announced revisions to commercial transactions law in September 2020. This helps promote commercial and banking transactions. It also makes the usage of cheques much more versatile.
The rationale for this increase is to hasten the recovery of economic activity, particularly in the private sector. Decriminalizing bounced checks prevents the beneficiaries from filing a civil or criminal complaint. As there is no need to get in touch with Criminal Lawyers in Dubai. These work in accordance to particular case to case basis unlike Divorce Lawyers in dubai.
Despite the fact that the new UAE Bounced Cheque Law was announced in 2020, it will go into effect in January 2022. Throughout these new developments, all commercial firms should have a legal team to support them. Connect Legal has corporate commercial legal specialists ready to assist you.
3. What are the distinctions between the old and new laws?
One of the pending improvements being implemented is the legalization of returned checks. This is because there are insufficient money on the account. There are, however, certain exceptions to this rule.
3.1 Concealed Criminality
For the time being, only a few activities are deemed illegal. To begin with, intentionally falsifying a check is still a criminal offense. Providing a forged check will result in legal ramifications.
Withdrawing monies from an account before the cheque can be cashed is likewise illegal. Any attempt to empty the account balance in order to prevent the check from being cashed is an act of bad faith.
In terms of how to pay a fine for a bounced cheque in Dubai, significant infractions can result in fines of up to 7500 AED. The authorities will inform the offender of the procedures he or she must take.
3.2 Partial Cheque Payment
If there are insufficient funds to cover the entire amount of the obligation, the bank must nonetheless pay a portion of it. The practice of partial payment of a cheque is now required. If the individual presenting the cheque asks it, the bank can offer a partial payment certificate.
The bank will include all of the data of the cheque’s issuer in the partial payment certificate. This contains the emirates passport or ID number, as well as the IBAN. When the issuer is a firm, the bank will supply the trade license information. Finally, the phone number, address, and other contact information will be provided.
The presenter can take legal action using this information. However, it is critical to assess the legitimacy of a bounced check.
3.3 Penalties That May Apply
Anyone who endorses a bearer cheque while knowing it cannot be drawn is subject to a penalty under the law. Whatever the circumstances, delivering a check with insufficient cash to pay is illegal. The penalty should be no less than 10% of the amount shown on the cheque.
Anyone convicted of a crime involving bounced checks will be denied the right to get a checkbook. This will be valid for a period of five years. They must additionally pay at least 10% of the check amount. They may also face jail for six months to two years in some situations.
3.4 Checkbooks must be surrendered
A guilty individual may face the removal of any existing checkbook as one of the consequences. They will also be unable to acquire a new checkbook for the following five years. Those who refuse to relinquish their current checkbooks will risk a penalty term.
3.5 Instrument of Administration
The law now considers a bounced check to be an executive instrument. This saves cheque bearers money and time since they can request that the issuer’s account be executed to obtain the amount claimed.
4. What should I do if my rental check bounces?
It is true that landlords gain more from accepting rent payments in the form of checks. For example, it is easier to manage multiple cheques rather than a large sum of cash. However, there is always the possibility of a bad check.
4.1 Avoid the situation
The first step is to determine why the issued cheque bounced. This will provide you with information on the path to take. There are a few non-criminal grounds, such as discovering anomalies in the signature.
Furthermore, it is critical to carefully examine the cheque you are getting.
4.2 File a lawsuit
You have the right to sue if you are the victim of a bounced rental cheque scam. Our top Connect Legal lawyers, who are specialists in General Civil Law, can help you handle this disagreement. They are experts in business and financial law, as well as landlord and tenant law.
In any case, the new UAE Bounced Cheque Law allows landlords to recoup the money they were supposed to receive. The bank is now required by the new directive to provide the money if they are available. However, as a landlord, you can still initiate a legal lawsuit in Dubai for a cheque bounce against the cheque issuer.
5. When am I allowed to pay a fee for a bounced check?
Dubai’s courts have already implemented the new processes. The majority of cases that were formerly classified as minor offenses have now been removed from the judicial system. This implies that Dubai prosecutors are giving penalties to offenders rather than submitting them to court.
If you’re wondering how to pay a fine for a bounced cheque in Dubai, you should look at the various values included in the new UAE Bounced Cheque Law. The penalty for a bounced check is generally based on the amount owed. The good news is that it is now a civil suit rather than a criminal violation.