Picture for illustration purposes only.
PHOTO BY ARCHIVE
DUBAI – The UAE Cabinet on Monday (October 26) approved new amendments to the Federal Law on Commercial Transactions, which also covers rules on bounced cheques.
The rules, which will come into force in 2022, redefine crimes involving bounced cheques and the issuance of blank cheques.
Amendments to the law will create several mechanisms and alternatives to ensure a simple collection of payments through cheque. Banks will be obliged to partially pay the amount after deducting the total amount available to the beneficiary. Bounced cheques can also become an executive document to be executed directly by an appropriate judge in court.
The amended rules aim to highlight the means of avoiding criminal lawsuits and facilitating related procedures, through encouraging reconciliation between parties and urging the payment of the value of the original cheque as the main condition for the abatement of a criminal lawsuit.
The amendments will also introduce several penalties, including the cancellation or non-issuance of cheque books of convicted persons for up to five years, and a ban on professional or commercial activities.
Additional penalties for legal persons, except banks and financial institutions, will also be introduced, including a financial fine, the suspension of licences to practice economic activities for six months, and the revocation or dissolution of the licences of legal persons who repeat violations.
In addition to the amendments related to bounced cheques and blank cheques, the amendments also cover the opening of joint accounts between two and more persons.
If one of the joint account holders dies or loses legal control, the other joint account holders must notify the bank within 10 days from the date of death or disqualification, and the bank must, from the date of notification, limit the ability to withdraw from the joint account within a party’s share of the account balance on the day of death or loss of eligibility.
This provision will be in force from the day following the date of the decree’s publication in the official gazette. ICA/WAM/Expat Media
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