Watch this video to know everything about #chequebouncein2025 and how the updated laws impact #chequebouncecasesintheUAE. Learn about the new cheque bounce rules 2025, recent legal reforms, penalties, and how individuals or businesses can handle a cheque bounce case under UAE civil law. Visit us @ https://www.professionallawyer.me/legal-articles/criminal-law/rules-and-regulations-followed-in-criminal-cases
00:02In simple words, a check is an order to a bank to pay a particular sum of money from the account of the issuer of the check, written on a specifically printed form.
00:13The issuer of the check is called the drawer, while the person to whom the check is issued is the bearer.
00:18The bank that holds and transfers the money for the drawer is called the drawee.
00:22Federal Decree Law No. 50-2022
00:24Issuing the Commercial Transactions Law lays down various provisions regarding checks.
00:29Article 514 of the law defines a check as a commercial paper with an order issued by the drawer to the drawee bank.
00:35To pay on the date fixed therein as the date of issuing a specific amount of money to a third person, namely the beneficiary, or to bearer.
00:43Even with the advent of payment technologies and various online payment options, checks continue to be widely used in the UAE, especially in the real estate sector.
00:52They provide a secure way to transfer money between two people.
00:55Due to the large expatriate community in the region, securing future payments becomes a hassle, which is solved by issuing checks that can be paid as and when the payment is due.
01:05Furthermore, strict legislations around checks and check bounce cases contribute in making checks a reliable way to transfer money.
01:12Bounce checks can result in both civil and criminal proceedings against an individual.
01:15Article 627 of the commercial transaction law lays down various conditions required to issue a valid check.
01:23The word check must be written on the check, in the same language in which the details of the check is written.
01:29The payment of money must be unconditional.
01:31The check must contain the legal name of the person, drawer, issuing the check.
01:36The check must contain the legal name of the entity, drawer, obliged to make the payment to the bearer of the check.
01:42The place where the payment is made must be mentioned on the check date, and place of execution of the check must be mentioned in the check.
01:49The check must contain the signature of the executor of the check, and which must be identical to the standard signature on record with the bank.
01:57Additionally, as per Article 629 of the law, the bank must draw a check that has been issued and is due in the state.
02:04The check must contain the name and the account number of the account holder, i.e., the drawer of the check.
02:10The check must be encashed within six months of its issue, as per Article 649 of the law.
02:15If the check contains all the above-mentioned information, it will be issued by the bank without any hassle.
02:20Unless the bank account of the drawer does not hold sufficient funds, as agreed in the check,
02:25or the bank has been issued a protest by the drawer, also known as an order for stop payment.
02:30When a bank refuses to cash a check due to insufficient funds, a stop payment order, or due to a check not meeting the essentials mentioned above,
02:38the check is said to have bounced or dishonored.
02:40Provisions governing check-bounce cases have seen sweeping changes in the UAE in the past few years.
02:46Earlier, check-bounce cases were treated as a grievous crime, and the drawer of the check faced possible jail time or fine.
02:52The older criminal provisions thus placed an undue burden on the UAE criminal justice system.
02:56The new laws have made significant changes in the treatment of check-bounce cases.
03:00Check-bounce cases can now be treated as civil or criminal cases, depending on the circumstances around the case.
03:06Article 630 of the Federal Decree Law No. 50 of 2022 states that no check must be issued unless the drawer has sufficient funds in his account
03:14that can enable the honoring of the check, in accordance with the agreement made at the time of issuing the check.
03:19As per Article 648 of the law, if the account holds funds less than what is prescribed in the check,
03:25the bank may pay the available funds to the bearer of the check, unless the bearer rejects it.
03:30The drawer may issue a protest, or a stop order, to the drawee bank only in cases of loss of check, or bankruptcy of the drawer, as per Article 651.
03:40According to Article 667 of the law, if a check is dishonored as a result of insufficient funds in the bank account,
03:47the check will be considered an executive instrument, and the bearer has the right to execute the check by force, as per civil procedure laws.
03:55As per the new laws, check-bounce cases in the UAE have evolved from a criminal offense to a civil matter with heightened financial penalties.
04:02Issuing a check with insufficient balance in the bank account does not automatically lead to criminal liability anymore.
04:07Instead of reporting to the police, in case of check-bounce, one may now directly approach the court for an execution order for full payment,
04:15or the payment of the remaining amount, in cases where they have chosen to accept partial payment from the bank.
04:20This alternative ensures that the bearer of the check has a quicker way to recover funds.
04:24Check-a-bounce will be considered a criminal offense in the following instances, as per Article 673-684 of the Federal Decree Law.
04:32Number 50 of 2022.
04:34Lying about insufficiency of funds, or leading to dishonor of checks, even though there are funds in the account,
04:40will lead to a fine of not less than 10% of the value of the check, with a minimum fine of AED 5000.
04:47Intentionally issuing a check with the knowledge that there is insufficient fund in the account leading to dishonor of check
04:52can lead to fines of not less than 10% of the value of the check, with a minimum of AED 1000.
04:58In case of repetition of the offense, the fine will be doubled.
05:01Instructing a bank to dishonor the check for fraudulent reasons,
05:05fraudulently closing the bank account, or withdrawing the full balance before the presentment date,
05:10or intentionally causing the freezing of the account in any way will lead to imprisonment between 6 months to 2 years,
05:15and or fine of 10% of the check value, of a minimum of AED 5000.
05:20Repetition of the offense will cause the penalty to be doubled.
05:22Intentionally signing or executing the check in a way that will cause the rejection or the dishonor of the check
05:28will lead to imprisonment between 6 months to 2 years, and or fine of 10% of the check value,
05:33of a minimum fine of AED 5000.
05:36In case of repetition of the offense, the penalty will be doubled.
05:39Forging a check or tampering with the check to attribute it to a third party,
05:43knowingly executing such checks, or knowingly accepting money issued as a result of such checks
05:48will lead to a minimum imprisonment of 1 year, and a fine between AED 20,000 to AED 100,000.
05:54Similar punishment will be levied for committing any acts related to check forgery,
05:58such as importing, acquiring or selling equipment or software that is used in forgery crimes.
06:04Fraudulently using or benefiting from a check that is drawn in the name of a third party,
06:08or whose use is associated with a fraud, will lead to a minimum imprisonment of 1 year,
06:13and a fine between AED 20,000 to AED 100,000.
06:16The news laws around check bounce cases represent a significant step towards streamlining the legal process,
06:22and reducing the burden on the criminal justice system.
06:25These changes also help in swifter recovery of funds,
06:29wherein the issuer of the checks can focus on the return of money,
06:32rather than the stringent criminal liabilities that they were subject to earlier.
06:35The aggravated fines will serve as a deterrent of the crime,
06:39thus ensuring a fairer outcome to all parties involved.
06:42It is always advisable to seek guidance from the best lawyers in Dubai
06:46to handle check bounce cases effectively and ensure compliance with UAE laws.
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