In a Federal Decree-Law adopted by the Council of Ministers headed by Mohammed bin Rashid

Legal amendments to ensure that the check is collected in the fastest way possible ... and implementation will start in 2022

The Council of Ministers, headed by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, approved the issuance of a federal law decree amending some provisions of the Federal Law on Commercial Transactions.

The amendments included the provision of a set of mechanisms and alternatives to ensure that the check value was collected in the fastest and simplest way possible, and consequential penalties were introduced, such as withdrawing the check book from the convicted person, preventing him from giving him new books for a maximum period of five years, and stopping professional or commercial activity.

The amendments granted the beneficiary the right to submit a direct request to the execution judge in the court for execution on the money of the source of the check in the event of its return without payment.

Decree-Law

In detail, the Council of Ministers headed by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister and Ruler of Dubai, approved the issuance of a federal law decree amending some provisions of the Federal Law on Commercial Transactions, as part of the continuous efforts made by the UAE government to continue developing the legislative environment and frameworks The law governing the commercial and economic sectors, in a way that establishes the country's position as a leading regional and international center for business, embracing major global companies and institutions, and achieving the UAE's vision aimed at developing an innovation-based future economy.

The most important amendments to the law include the amendment of the provision for bounced checks, or the issuance of checks without balance, contained in the Penal Code, by providing advanced and fast civil mechanisms to collect its value, and the decree will be effective as of the beginning of 2022.

Mechanisms and alternatives

The amendments included providing a set of mechanisms and alternatives that ensure that the check value is collected in the fastest and simplest way possible, including obliging the bank to partially fulfill the check after deducting the full amount available to the beneficiary, and making the returned checks an executive document that is executed directly by the execution judge in the court, as well as confirmation. The means of preventing the criminal lawsuit and facilitating its procedures, with equality between reconciliation and payment of the check value as a basis for the expiry of the criminal case or the suspension of the execution of the adjudged punishment.

Collateral penalties

The amendments introduced a number of ancillary penalties such as withdrawing the check book from the convicted person, preventing him from giving him new books for a maximum period of five years, stopping the professional or commercial activity, and penalties for the legal person (except for banks and financial institutions) were also introduced, including a financial fine, and the suspension of the license to practice the activity For a period of six months, revoking the license, or dissolving the legal person when the violation is repeated.

Shortcut actions

The amendments shorten the judicial procedures for a civil claim to the value of the check by granting the beneficiary the right to submit a direct request to the execution judge in the court to execute the funds of the source of the check in the event of its return without disbursement, which is in line with the government's strategy aimed at facilitating litigation and speedy adjudication of cases, and this amendment will contribute to rulings. The law promotes the strength of the check as a fulfillment tool in commercial transactions.

A qualitative step

The amendments to the law constitute a qualitative step and an important motivation to support the economic, legislative and social sectors, which would contribute to achieving the strategic objectives of many national indicators aimed at supporting the process of societal development by establishing the concept of “a safe society and a just judiciary”, as well as enhancing the competitiveness of the national economy and increasing its attractiveness. Through the continuous development of legislation to accommodate the changes and developments taking place in various sectors, and the adoption of innovative work models, especially those that rely on modern technology, in order to establish the leadership of the UAE globally.

The amendments also contribute to providing effective solutions to the challenges related to the use of checks in commercial transactions, by adopting the best global practices in place to reach a national economy based on freedom of exchange, effective credit and immediate fulfillment of payments, in addition to encouraging the commercial and economic sectors to use modern payment technologies.

Criminalization cases related to the check

The criminalization cases related to the check have been redefined and defined to include checks for fraud, and fraud using checks by giving an order to the bank not to cash the check without any right, withdrawing the entire balance before the check issuance date, and intentionally writing or signing the check in a way that prevents it from being cashed.

According to this amendment, the criminalization currently contained in the Penal Code regarding checks has been abolished, especially with regard to issuing checks without balance, except for the cases mentioned in the Decree-Law.

Joint account

The amendments to the decree-law included, in addition to the amendments related to the checks returned and issued without balance, that if a joint account was opened between two and more persons, and when one of the joint account holders died or lost legal capacity, the rest of the joint account holders must notify the bank of this within a period of no time. More than 10 days from the date of death or disqualification, and the bank must, from the date of its notification, suspend the withdrawal from the joint account within the limits of the person’s share of the account balance on the day of his death or loss of capacity, and it is not permissible to withdraw from his share until the successor is appointed, bearing in mind that this provision will be implemented. As of the day following the date of publication of the Decree-Law in the Official Gazette.

Requiring the bank to partially honor the check after deducting the full amount available to the beneficiary.

Make bounced checks an executive document executed directly by the court's enforcement judge.

Granting the beneficiary the right to submit a direct request to the judge of the court for execution on the money of the source of the check in case it is returned without cash

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