The United Arab Emirates will stop imprisoning expatriates for writing cheques that bounce, which was previously a serious criminal offence.
Expatriates jailed for defaulting have been released from prison and federal courts no longer accept bounced cheques presented by lenders as evidence of a crime, which effectively decriminalises defaulting on a loan, the Abu Dhabi daily The National reported.
The relaxation for expatriates follows a similar move in October when the rules were relaxed for Emirati citizens.The latest ruling is the result of a decree by the President, Sheikh Khalifa, that expatriate and Emirati loan defaulters should be treated equally.
“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,” Ali Khalfan Al Dhaheri, head of the legal affairs department at the Ministry of Presidential Affairs, told The National’s Arabic-language sister paper Al Ittihad.
In June, around 20 foreign businessmen in Dubai’s Central Jail went on a hunger strike , protesting against what they saw as the overly harsh penalties handed down for financial crimes.
Peter Margetts, a 48-year-old real estate developer from London, who was serving a 23-year sentence for writing cheques which bounced, was on the hunger strike and suffered a stroke.
Like many of his fellow expats in the real estate sector, Mr Margetts built a profitable business during Dubai’s boom years, but things turned sour when the property market crashed in 2008.
After investors were unable to cash their security cheques which Mr Margetts says was due to him being defrauded by a developer he was sentenced to 46 years in prison, though the term was later reduced.
Another British property developer on hunger strike, Safi Qurashi who famously once paid £43 million for an island in the shape of Great Britain on Dubai's The World development was also taken to hospital due to poor health.
Mr Qurashi was sentenced to seven years in jail in 2010 over bounced cheques, and had been fighting his conviction ever since.
Pressure had been mounting for years on the UAE to reform its financial crime laws, which are widely regarded as in need of modernisation.
During the financial crisis, it was reported that around 20pc of the Dubai's 2,400 inmates had been imprisoned for bouncing cheques.