Effective from January 2, 2022

The Central Bank limits the criminalization of the check to 4 cases in the new amendments

The Central Bank revealed the objectives of the new amendments to the Commercial Transactions Law related to the provisions of the check, indicating that the cases of criminalization and fraud related to the check were limited to four specific cases.

The Central Bank clarified that given the importance of the check in transactions, the Commercial Transactions Law has been amended, in accordance with best practices, to keep pace with international developments, and with the aim of developing a tight legislative framework for these transactions to control check dealing, ensuring that it plays its role as a fulfillment tool in the place of money.

He stressed that the new amendments generally aim to decriminalize the check in the Penal Code, especially with regard to the issuance of checks without balance, and the introduction of amendments and the creation of new texts in Chapter Three related to the check contained in Book Four of the Federal Commercial Transactions Law.

Criminalization and fraud

The Central Bank revealed that some crimes were retained in the new amendments to the Commercial Transactions Law related to the provisions of the check that will be implemented as of January 2, 2022, to ensure the achievement of the desired goals of decriminalization, and its replacement by some civil measures.

In the clarifications he issued yesterday, he stated that the cases of criminalization and fraud related to the check were limited to four specific cases: “Cases of fraud” when issuing the check, such as issuing an order, or requesting the bank before the due date not to cash the check illegally in cases other than those stipulated in Articles (620) and (625), which are in the event of a check being lost or the bearer's bankruptcy.

He added that the second case is “cases of criminalization” in the crimes of forging and using checks, in what is represented in the third case in “closing the account” or withdrawing the entire balance in it before issuing the check, or before presenting it to the bank for exchange, or the account was frozen. As for the fourth case, It deliberately writes or signs the check in a way that prevents it from being cashed.

Execution judge

The Central Bank stressed that the criminalization has become limited only to these cases, and the bearer of the check or the “beneficiary” in other than these cases, when the check is returned for lack of balance in whole or in part, may raise the matter directly to the execution judge to obtain his right, by requesting its implementation in whole or in part. Partially by force, as an executive document, in accordance with the procedures and rules specified by the regulations of the Civil Procedures Law.

He pointed out that the principle is that the bank (the drawee) is obligated to pay the value of the check just by presenting it, whenever it has a balance, and it may not refrain from paying, in application of the principle of the check holder owning the consideration for fulfillment.

The Central Bank stated that if the law has permitted the bank (the drawee) to refrain from paying if it receives opposition in this payment, but it has narrowed the cases in which opposition is permissible in fulfillment, and limited them to the cases of loss of the check and bankruptcy of the bearer only, and that In order for the check to perform its function as an instrument of fulfillment.

Strong civilian alternatives

The Central Bank revealed that strong civil alternatives have been put in place that lead to collecting the value of the check in the fastest and simplest way possible, including obligating the bank to partially pay the check, and making the check affixed to it by the drawee bank, with no balance for it, or insufficiency of an executive document that is executed directly Through the execution judge, without resorting to lengthy legal procedures, as was the case before before the amendment.

He stressed that there is no need to open a report with the police, or file a complaint, and follow up on the reporting procedures with the police and then the prosecution and then the court, especially since the check has the power of an executive bond that does not need a court ruling, and that would lead to speeding up the action. The legal person can, by way of obtaining his right, simplify the procedures for obtaining the value of the check, which leads to strengthening the power of the check as a tool for fulfillment in commercial and financial transactions.

Prevention and penalties

The Central Bank stated that the means to prevent criminal action and facilitate its procedures in the event of full or residual payment of the value of the check has been provided, before initiating the compulsory execution procedures, or the issuance of a final judgment.

A number of accessory penalties were also introduced, including: withdrawing the checkbook from the convict, preventing him from giving him new books for a maximum period of five years, stopping the professional or commercial activity of the legal person, and introducing penalties for the legal person (except for banks and financial institutions), including the imposition of a fine. Financial terms, suspending the license to practice its activity for a period of six months, as well as canceling the license, or dissolving the “legal person” when the violation is repeated.

16 new and modified articles

The Central Bank revealed that the number of amended and new articles reached 16, as the number of amended articles reached seven, namely: (379), (600), (617), (641), (642), (643), and (644).

While the number of new articles reached nine, they are: (635), (641) (1), (641) (2), (641) (3), (641) (4), (643) (1), (643) (2), (644) (1), (644) (2).

time limit

The Central Bank confirmed that a period of more than one year and three months has been given since the issuance of the law, for all check dealers, both individuals and companies, to prepare for the amendments to the provisions of the check, in order to ensure the stability of transactions.

The same applies to law enforcement agencies, in order to be able to reconcile the situation and develop appropriate procedures and mechanisms for implementing and implementing the new amendments.

Present the check for fulfillment or payment

The “Central” stressed that the law specified the date for presenting the check for fulfillment or payment, as it stipulated that it must be presented within six months if it was withdrawn in the state or abroad, and it is due to be paid, provided that the calculation of this period begins from the date indicated in the check that it is the date of its issuance, and therefore The period is calculated from the date indicated on the check as the date of its issuance, and not from the date of partial payment.

And he explained that the reason for shortening this date is due to the legislator’s desire not to oblige the drawer to maintain the consideration for payment with the withdrawn bank indefinitely, bearing in mind that if the bearer does not present the check during the date for which it is presented for payment, his right to claim its value is not forfeited, and therefore Article (620/1) of the law states, “The drawee may pay the value of the check even after the expiry of the date for presenting it, given that this date has no binding force on the part of the beneficiary or the bank and its expiry does not preclude the collection of its value from the drawee bank. It does not result in the check losing its nature as a fulfillment instrument that runs the flow of money, and the effect of its expiry is limited to merely depriving the beneficiary of holding on to the defenses that he has before the drawer.

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