Criminal Protection of Cheques under UAE Law

Samir Zakarna
Director of Operations at Zayed Al Shamsi Advocates and Legal Consultants.

The cheque is considered one of the most important instruments of payment used in commercial transactions and in daily dealings between individuals. It enjoys trust and credibility in transactions due to the presence of legal safeguards that protect those dealing with it from falling victim to individuals who may seek to undermine confidence in the cheque and use it as a tool to unlawfully seize others’ funds.

It is well known that in 2020, the UAE legislator, through Law No. (14) of 2020 amending certain provisions of the Commercial Transactions Law, stipulated that the return of a cheque due to insufficient funds or lack of funds no longer constitutes a criminal offense. However, this does not mean that the legislator has abolished the criminal protection of cheques under UAE law. In fact, the Commercial Transactions Law issued by Federal Decree-Law No. (50) of 2022 introduced strict penalties for certain actions related to cheques that are classified as misdemeanor offenses.

Without delving too deeply into the intricacies of the matter, we will highlight the crimes mentioned in Article (676) of the Commercial Transactions Law, which states:

“Shall be punished with imprisonment for a period not less than one year and with a fine not less than twenty thousand (20,000) dirhams and not exceeding one hundred thousand (100,000) dirhams, anyone who commits any of the following acts:”

1. Forged or fabricated a cheque, or falsely attributed it to another by altering its data through addition, deletion, or any other method stipulated in Article (251) of the referenced Penal Code, or any article replacing it, with the intent to harm others and for the purpose of using the forged cheque accordingly.

2. Used a forged or fabricated cheque while being aware of its falsity.

3. Accepted amounts paid via a forged or fabricated cheque, with full knowledge of its nature.

4. Used a legally valid cheque issued in the name of another person, or benefitted from it unlawfully, or where its use was linked to a fraud offense.

5. Imported, manufactured, possessed, held, sold, offered, or provided equipment, tools, technological programs, information, or data used in the commission of the forgery crimes mentioned in this Article, with knowledge of their purpose.

From the text above, it is clear that the UAE legislator has been keen to ensure that cheques remain a reliable instrument of payment trusted by members of society. Therefore, strict penalties have been imposed on anyone who commits any of the above-mentioned crimes.