The New Cheque law in the UAE


Federal Decree-Law No. 14/2020 has been applicable from January 2, 2022. This law has amended some provisions of Commercial Law No. 18/1993. The amendments have dropped the criminalization of issuing a cheque without a balance. Article 401, 402 and 403 of the Penal Code have been cancelled, Therefore cheque crimes are now subject to Commercial Transactions Law and not Penal Code.

It should be noted that not all Cheque crimes have been cancelled& as a matter of fact, the new law has abolished the criminalization of the forms of crime related to the Cheque and has continued punishment and criminalization of the other forms, under Article 401, 402 and 403 of the Penal Code. New crimes have been added that did not exist before for acts that were not criminalized.

What crimes have continued to be punished?

A)Whoever closed the account or withdrawn all the balance in it before issuing the cheque or before presenting it to the drawee, or if the account was frozen.

B) Whoever deliberately writes or signs a cheque in a manner that prevents it is from cashing.

C)An order or request of the drawee prior to the date of withdrawal not to cash the cheque he issued in cases other than those stipulated in Articles 620 and 625 and Article 641 bis 2

D)Violation by any bank of the order issued by the court to withdraw the cheque book (Article 643)

E)Declaring intentionally and contrary to the truth that there is no consideration for payment or the existence of a consideration for payment that is less than its value (Article 641)

F)Refusal in bad faith to pay a cheque drawn on the bank that has consideration for payment to a bearer against which a valid objection was not submitted (Article 641)

J)Refusal to place a statement of refusal to pay issued by the drawee (Article 641)

Punishments for the abovementioned are sentences to the fine of no less than 10% of the value of the Cheque with a minimum of AED 5000 & not in excess of the equivalent of twice the value of the cheque.


What are the new crimes?


1)Refusal to partially pay the cheque, issue a certificate to that effect, or deliver the original cheque.

2) Whoever forges or fabricates a cheque or attributes it to others by inserting in its data by addition or deletion or by other means with the intent of causing harm to others and with the purpose of using it for the purpose for which it was forged.

3) Whoever knowingly uses a forged or forged cheque (Article 641 bis 3)

4) Whoever accepts sums paid by a forged cheque or benefits from it unlawfully, or whose use is linked to a fraud crime.

5) Whoever uses a validly drawn cheque in the name of others or benefits from it unlawfully, or its use is linked to a fraud crime (Article 641 bis3).

6) Whoever imports, manufactures, possesses, sells, displays or provides equipment, tools, technological programs, information or data used in committing a forgery crime.

7) Whoever commits the crimes stipulated in Article 641 bis 3 in the execution of a terrorist purpose (Article 641 bis 4)

8) The convict did not deliver his cheque books to the banks within 15 days from the date of his notification of the order issued by the court to withdraw them (Article 643)


What are the implications of decriminalization: There will be no crime of giving a cheque in bad faith after the legislator has dropped the punishment for it. Therefore, it is not permissible to open any new criminal reports or initiate criminal cases in this regard. If we assume that a report is opened or the case .

is initiated, the Public Prosecution must save these reports administratively because the crime has not occurred, The police shall not open any reports of this crime, or detain the defendant or circulate against him, and the Public Prosecution shall not issue any arrest warrants, summonses, or international arrest warrants in this regard.


What is the impact of decriminalization on civil lawsuits?

By decriminalizing the act of giving a cheque in bad faith where, a cheque that does not match the balance, there is no civil lawsuit, but this has no effect on the beneficiary’s right to resort to litigation in accordance with the provisions of Commercial Transactions Law No. 14/2020 and Civil Procedures Law No. 15/2021 and its Executive Regulations.

Relationship of partial fulfilment of the payment order and the claim of recourse against the drawer and signatories of the cheque:

A)In accordance with Article 62 of the Regulations of the Civil Procedures Law according to the amendment, (Decree 75/2021), the beneficiary can claim the amount of compensation, interest, or any other precautionary measure by way of a payment order.

B)Partial payment enables the bearer to claim compensation, interest and precautionary measures by order of payment of the remainder of the cheque value.

C)An action for compensation may be filed if the performance order is rejected wholly or partially.

D)The executive document will be limited to the request for execution of the principal amount of the cheque only, without compensation, interest or any other requests.

How can the cheque holder act to fulfil his rights after the last amendments:-

In light of what was previously stated, and regarding the lifting of criminal protection for the crime of “issuing a cheque without balance” in order to preserve the rights of the cheque bearer and to ensure the stability of transactions between individuals.

Law has facilitated the procedures for collecting the cheque, so there is no longer a way to open a report to the police and then

Conclusion :

The new amendments have waived the criminal liability for bounced cheques with no sufficient funds. This will help to boost the business between individuals and the corporates. The provisions in the latest amendments will provide clarity to the banks concerning the procedures. Decriminalisation is a preventive measure combined with additional penalties for reducing the misuse of the Cheques. the new changes will give administrative punishments for issuing Cheques. without funds, Including withdrawing chequebooks from the convicted, denying them to get new cheque books for five years and suspending their business activity .under the amendments, if the amount available for payment is less than the cheque value unless the bearer rejects the partial remuneration, the bank must pay the amount partially to the drawer.

the amendment to come into force is to permit the market to understand the divisions and make the rules also allow reconciliation between the drawers Android of the bounced cheque before.



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