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NEWS

The end of the Dubai debt sentence?

admin - November 28, 2018 - INTERPOL;

This guest post is an abridged version of an article written by Edward Grange and Kim Nihill from Corker Binning. As with all of our guest posts, the views represented are of the authors and may not reflect the views of Fair Trials.


The fallout from the 2008 financial crisis is still being felt by many who left the UAE in a hurry. Individuals have been arrested and detained all over the world as a result of the UAE requesting INTERPOL to issue Red Notices for those who failed to honour a cheque.

Before the UAE Central Bank introduced direct debit systems in October 2013, it was common place for banks or lending institutions to insist that a borrower provide a post-dated signed cheque to cover the period of the loan repayment.  Many UAE banks still require signed cheques to be provided as security for loans. In the event that a borrower fails to make a loan instalment, the post-dated cheque is presented for payment and then often bounces.

And the UAE Federal Penal Code is not forgiving. It imposes criminal sanctions on any issuer of a bounced cheque – until recently with a maximum penalty of three years imprisonment. The offence was routinely enforced: during the financial crisis it was reported that 20% of Dubai’s 2,400 inmates had been imprisoned for bouncing cheques.

The 2008 recession in the UAE witnessed construction sites grind to a halt and thousands of workers laid off. Jobless expatriates left the country in their droves. And then came the fallout. Many individuals with no previous convictions, who had started new lives elsewhere, suddenly found themselves on the receiving end of an INTERPOL Red Notice and, in some circumstances, an extradition request. The fallout continues to this day.

Historically, an INTERPOL Red Notice could be issued for the offence of ‘uttering an unfunded cheque’. If a Red Notice is published, it has the effect that individuals can be stopped, questioned and sometimes incarcerated on crossing an international border, with the risk that extradition proceedings may commence in a country with little defence protections. Little wonder that INTERPOL has faced widespread criticism in recent years for routinely issuing Red Notices for unfunded cheque cases – a white collar “crime” which isn’t recognised as a crime by many developed criminal justice systems.

But this situation is now finally changing. In December 2017, new rules came into effect in Dubai, which re-categorised the offence of uttering an unfunded cheque to the value of AED 200,000 as a misdemeanour. Such an offence will no longer be dealt with by a maximum penalty of three years imprisonment. Instead, those convicted of such an offence will be subject to a financial penalty rather than incarceration.  

Whilst this is a de-categorisation as opposed to a decriminalisation, the new rules should bring some respite since Red Notices will no longer be issued for this offence.

But where does this leave those who already have a Red Notice issued against them and what can be done? For most people, the existence of a Red Notice is not simply an inconvenience, but has a crippling effect on their private and business lives. International travel becomes fraught with the risk of arrest, detention and in some cases extradition proceedings.

The best way to challenge a Red Notice is on the basis that it does not comply with INTERPOL’s own processing rules. The recent change in UAE law should galvanise individuals who have outstanding prosecutions for uttering an unfunded cheque under the value of AED 200,000 into taking positive steps to have their Red Notices removed. It is an opportunity for those who have, up until now, been afraid to address this issue: it provides a strong basis on which to challenge the validity of a Red Notice which can be mapped onto INTERPOL’s own rules and which should, after many years, bring an end to their Dubai debt sentence.

If you are a journalist interested in this story, please telephone Fair Trials’ press department on +44 (0) 20 7822 2370 or +32 (0) 2 360 04 71.

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