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Expatriates in the UAE will risk facing imprisonment over bounced cheques in the country, the UAE's Higher Committee of the Nationals Defaulted Debts Settlement Fund has clarified.
Earlier this week, media reports had indicated that the UAE was decriminalising bad cheques for foreigners in the country. The country relaxed penalities for loan defaults on Emiratis in October.
In a statement on official new agency WAM, the committee confirmed that the fund is "concerned only with settling all the debts of Emirati citizens, whether detained or convicted, and is settling their debts according to payment schedules set by courts.
"The relevant mechanisms set by the fund for this purpose apply only to relevant UAE citizens, and not others, and this includes the directives by President Sheikh Khalifa bin Zayed Al Nahyan to decriminalise security cheques presented by UAE citizens to banks and financial firms," it said.
The committee added that security cheques are still considered valid as evidence, but that the prosecution will suspend all the criminal cases and the courts will rule that all criminal cases in connection with security cheques presented by UAE nationals are terminated.
The committee also noted that it continues to work on completing the settlement of loan defaults in accordance with the mechanisms and procedures set by the fund, added the statement.
On Tuesday, Abu Dhabi daily The National quoted Ali Khalfan Al Dhaheri, head of the legal affairs department at the Ministry of Presidential Affairs as saying:
"In line with the directives of Sheikh Khalifa and in the spirit of fairness and equality, the courts have stopped as of last month accepting collateral cheques presented as a criminal tool against expatriate debt defaulters."
"Federal public prosecutions in the country have, indeed, released expatriate detainees as has been the case of their Emirati counterparts who were freed last October," the paper quoted judge Jassem Saif Buossaiba, head of the judicial inspection department at the Justice Ministry, as saying.
In October last year, the UAE released from prison around 290 Emiratis people convicted of bouncing cheques. In May, the UAE President allocated around Dhs5 million ($1.4 million) to settle defaulted loans for each indebted Emirati.