You could be signing your own prison sentence if you sign a cheque you can't honour- in UAE

Recently Gulf news XPRESS published one article about cheque bouncing and this article will some insight about UAE rules so we are publishing the same for our readers

 Expatriates and Emiratis who are jailed for issuing dud cheques may continue to languish in jail even after completing the prison term - that is, until the debt is cleared, lawyers told XPRESS.

There is this mistaken notion held by many that a debtor is freed from his financial liabilities after doing time in jail. The reality is far from it.

Ahmad Abdullah, a 48-year-old Emirati, was jailed last year after his general trading business went under and cheques worth several hundred thousands of dirhams he signed bounced. He does not know when he will walk a free man.

"The problem is after my first cheque bounced, I was jailed for it and I've been unable to do anything about my situation," said the father of six from Al Aweer Central Jail. "So, the other cheques I issued also bounced. It became a domino."

Rushdie, a Filipino jailed since 2008 for his inability to pay Dh74,000 in personal loans, said he also does not know when freedom day will come.

A dud cheque entails a minimum of one month in jail to a maximum of three years. But Ali, a 50-plus Arab, has been in jail for nine years after being convicted in 2003 in a financial case.

"UAE law deems it a crime when a cheque is returned due to insufficient funds," said Jafar Al Touq, a lawyer practising in the UAE for 26 years. "Those who think that sitting in jail without paying a loan is a temporary, short-term way out of debt are absolutely wrong. Otherwise, I will also do the same thing - borrow, then stay in jail for a while and keep the money."

The process in a bounced cheque goes roughly like this: a customer defaults on a loan or credit card payment, the bank recovery team hounds him and submits his security deposit cheque (which will bounce). The lender then files a criminal case for the bounced cheque and the defaulter gets jail time.

Though a subsequent civil case may not necessarily mean the defaulter stays in jail forever, Al Touq said: "He [the borrower] will stay in jail longer [than the original jail term]. It's the system's way of putting pressure on the defaulter. If there's reason to believe fraud has been committed then the judge will put him behind bars longer."

Ignorance:But some end up serving long jail terms due to ignorance.

The case of Yousuf, a 28-year-old European sentenced to nine years in Dubai, is a classic example of how Article 401 of the UAE Penal Code is applied.

Yousuf earned Dh30,000 a month as an accountant for a real estate firm and signed cheques as part of his job.

Several parties sued his company after it went bust; one complainant alone demanded Dh5 million back. In February 2011, the Court of Cassation affirmed the lower courts' decision giving him three years for each of three bounced cheques worth millions. Yousuf's day in court involved the judge asking whether he had signed the cheques that bounced - Yousuf admitted they were his signatures.

"We argued that he signed cheques as part of his job," said his lawyer, Emirati Amer Syed Al Marzouqi. "The problem is that you have this law [that criminalises bounced cheques]."

Article 401 states that bouncing cheques is punishable by confinement of one month to three years or a fine of a minimum of Dh1,000 to any individual who, in bad faith, writes a cheque with insufficient funds.

Some legal professionals argue that it's harsh and archaic.

However, the UAE has now drafted a new insolvency law which aims to address some of these issues.

Mazen Boustani, finance and banking law expert for Habib Al Mulla and Co, said: "The UAE has a comprehensive insolvency law. The main challenge concerns security asked by creditors, and post-dated cheques, if not honoured, constitute a crime with a jail sentence. This results in creditors - instead of having recourse to normal insolvency procedures - resorting to a speedier process, that of filing a criminal complaint for a dishonoured cheque."

In Yousuf's case, it is unclear whether the complainants will file a subsequent civil case that would keep him in jail longer.

But this happened to Angelito, a 49-year-old Filipino logistics executive, who served two prison terms - one in 2001 and the other in 2010 - over the same bounced cheque. When Angelito's Dh75,000 cheque bounced in 2001, he was sent to jail for six months. He thought his liabilities had disappeared and he went back home to Manila. Nine years later, when he flew back to Dubai to try his luck once more, he was arrested upon arrival due to a civil case filed by the creditor. He spent more time in jail. "I did not know I could be jailed again for the same thing," said Angelito.

Col Adel Al Suwaidi, Director of Education and Training at Al Aweer Central Jail, said there's not much recourse for someone jailed over a bounced cheque except for the amount owed to be paid.

Other offenders - with the exception of murderers - may get their sentence commuted if they memorise parts or the whole of the Quran. But this, he said, does not apply to someone jailed for a bounced cheque. "The commutation of a jail sentence only applies if the offence is committed against the state, except murder. In a bounced-cheque case, a person is free the minute the amount owed is paid."

Jailed debtors can only hope for a debt write-off, a government bail-out or a Good Samaritan.

Al Marzouqi said a write-off is rare. "It never happens, especially after the defaulter has been arrested. Most banks demand the full amount from the jailed borrower."

Latifa Khadem, head of the Humanitarian Services Section at Al Aweer Central Jail, said: "There's not a day without one of our inmates asking for financial help. We welcome any financial aid from generous people to help the inmates who are unable to pay their loans."

Last year, the UAE government announced a Dh10 billion fund to help Emiratis who cannot repay their debts — to settle their personal loans through a process overseen by the UAE Central Bank.

CIVIL CASE

XPRESS posed specific questions - about the criteria for filing a post-jail civil case against a defaulter - to numerous banks. Most declined to comment.

A bank official told XPRESS: "It's a police matter."

An out-of-court settlement system implemented by Dubai Police last year has been fairly successful. It gives debtors a one-month grace period to clear bounced cheques. It led to a huge drop in bounced cheque cases. Among Emiratis, the numbers dropped to 3,760 in 2011 (January-September) from 5,623 in 2010. No data is available for expatriates.

A local bank official explained it's their legal department's call on whether or not to lodge a civil case against the jailed borrower. "It depends on the amount owed," said the official, who asked not to be named. "If it's a huge amount, a civil case will be filed," he said without elaborating.

Al Touq said, however: "If the person [defaulter] has no money, jail is not useful... it's damaging to all parties."

THE LAW

Article 401 of the UAE Penal Code:

Any individual who writes a cheque with insufficient funds - causing the same to bounce - can face imprisonment of one month to three years, or a fine of a minimum of Dh1,000.

Highway training made mandatory for new drivers in Dubai

Gulf news picture

Training to drive on the highway for a minimum of two hours has been made mandatory to obtain a driving licence in Dubai, officials announced yesterday.

"After passing the road test, drivers will now have to undergo driving lessons along the highway, with trainers beside them, before they are issued a driver's licence," said Ahmad Hashim Behroozian, CEO of the Roads and Transport Authority's (RTA) Licensing Agency.

"This will ascertain the drivers' ability to cope with the vehicle as well as other vehicles on the road."

He was speaking at the launch of the unified curriculum for all driving institutes in Dubai.

The unified curriculum for training and qualifying those wishing to obtain driving licences for light motor vehicles has been distributed to all institutes and has been put into effect since the start of this year, he said. Training on the highway is just one of the changes the new curriculum will introduce. Other significant changes include mandatory night driving lessons and lessons on sudden braking in case of emergency situations.

"It is a complete training package, which takes the learner from attitude development and road safety awareness to vehicle familiarisation, from driving in simple to complex road networks to night driving until finally to freeway driving."

At present, every driving school has its own curriculum. "They all cover the major skills but by unifying we have put a structure around the training process and based on this the schools can come up with improvements," Behroozian said.

The new curriculum — delivered in Arabic, English and Urdu — has two components. The theoretical component comprises eight basic lectures and videos — including road rules, attitude and accident case studies — which are mandatory for trainees to attend as they cover safety standards and groom them to become able drivers, he said. The practical component comprises five basic stages including emergency braking, parking exercises, night driving and highway driving.

No additional costs

The number of mandatory lessons will still continue to be 40 lessons. This way the curriculum will not mean any additional costs for the trainees, Behroozian said, adding that the drivers will benefit from better training at the same cost.

The curriculum will follow a systematic progressive teaching method, whereby trainees will have to demonstrate their proficiency before being allowed to progress to the next step.

Three specific areas along the highway have been identified by RTA for training drivers, Hussain Al Saffar, Director of Drivers Training and Qualification department at the RTA, told Gulf News.

The road connecting the Business Bay crossing to Al Hadiqa Road, Emirates Road from near the Sharjah boundary up to Al Aweer Interchange and Al Aweer road leading towards Hatta are the areas identified.

"While driving along the highway, trainees will not be assessed because they would already have passed the road test. But the training is a means of managing risk on the highways," he said.

Asked if the new curriculum will make it easier or harder for aspiring drivers, Sultan Al Marzouqi, Director of the Drivers Licensing department, said that the RTA's focus is on allowing only safe drivers on the roads.

"The pass rate at driving tests has more than doubled recently, going from 17 per cent on average between 2008 and 2010 to 30 per cent in 2011. Accidents and deaths have also come down. This means drivers are being trained better," he said.

Expatriates' ID card deadline extended in three emirates

Residents of Abu Dhabi, Dubai and Sharjah whose residence visa expires this year can register and renew ID cards at the time of renewing their visas. They will be exmpt from fines, said Emirates Identity Authority (Eida).

According to an 'Emarat Al Youm' report, more than 683,000 residents in the three emirates will benefit from the new rule.

Eida had earlier set October 31, 2011, as the deadline for all expatriates in the UAE to renew ID cards. Thereafter, they were required to pay Dh20 fine per day, with a maximum Dh1,000.

The Authority said the decision to reshedule registration deadlines was taken because of the demands from a large section of the population in the three emirates to extend the deadline, especially from unskilled class.

Expatriates in Sharjah are required to register and renew their ID cards before February 1; Abu Dhabi residents before April 1; and those in Dubai before June 1.

UAE nationals advised not to marry foreign women

The UAE nationals have been advised not to marry foreign women due to social, legal and financial complications which arise following such marriages, said a renowned lawyer.

Speaking at the Noor Dubai Radio, Isa bin Haider, CEO of Bin Haider Advocates & Legal Consultants in the UAE, said a large number of cases are pending before the courts due to such marriages.

He pointed out that the young men marry foreign women not to make family but to get rich. But if the husband's income gets depleted, the foreign wives create problems which lead to court cases.

Bin Haider urged the UAE youths to marry the Emarati women who follow the same traditions and customs as men.

He also advised the young nationals not to make big commitments with regard to alimony at the time of marriage and follow the rules.

He said a decree by His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE, fixed it at  Dh50,000 which applies only in case of marriages with the Emirati women.

While the marriages of UAE nationals with foreign women will be subject to what was agreed upon in the marriage contract with regard to alimony.

Bin Haider also informed that the second marriages have additional financial burdens such as leading the young men to deeper debt.

He called for dialogues between couples and urged resorting to solving family problems through discussions and listening to other party’s concerns. He emphasised that if husband listens to wife’s grievances, it will help solve a number of family problems and will lead to a happy life.

According to the National Center for Statistics, most of the marriages by UAE nationals with foreign wives end in divorce. For instance, there were 1,798 marriages with foreigners in UAE last year, and 695, or 39 per cent, of these marriages had ended in divorce.

EIDA launches online registration

Persons applying for a renewal or a new national identity card need no longer to wait in big queues at registration centres as they can now benefit from an online registration service launched on Thursday.

With a click on a few buttons on their personal computer, applicants who have credit cards can now register while at home or office without the need to go through agonizing waiting at packed typing centres.

The Emirates National Identity Authority (EIDA), which is overseeing a nation-wide ID project, said the new services involves new registration, renewal of existing cards, and replacement of lost or damaged cards.

“Applicants can also check the status of their application online…payment can be done by credit card after the applicants register with EIDA website so they can be given a password,” EIDA said in a statement.

EIDA director general Ali Al Khoury said the new service, which is now confined to expatriates, would save time and effort for both the public and registration offices through the UAE.

“It also reduces the Dh70 fee paid by applications to registration offices by 40 per cent…once the applicants finish registration online, they will be given an appointment to go for stamping.”

He said the scores of ID typing and registration centres would continue to operate and serve those who do not wish to register online.