Is a bounced cheque still a crime in the UAE?

Most people holding a returned cheque still expect to file a police complaint. That was the ordinary route for years. It is not the ordinary route now.

The change was introduced by Federal Decree-Law No. 14 of 2020 and took effect on 2 January 2022. The provisions now sit in Federal Decree-Law No. 50 of 2022, the Commercial Transactions Law. A cheque returned because the account could not cover it is treated as a debt to be enforced rather than an offence to be reported.

What the return slip decides

The reason the bank prints on the return slip is the first thing to read, because it decides everything after it. A cheque marked unpaid for no or insufficient balance is an executive instrument under Article 667 of Federal Decree-Law No. 50 of 2022. The holder may apply directly to the Execution Judge, without a separate trial on whether the debt exists.

A cheque returned for another reason, a signature that does not match the mandate for example, does not automatically fall into that category and is handled differently.

The bank has to pay what is there

Article 648 requires the bank to pay whatever the account holds, unless the holder refuses partial payment. The cheque is marked and a certificate issued for the shortfall, and the balance is then recoverable under Article 667.

This matters more than it sounds. A cheque for AED 100,000 drawn on an account holding AED 30,000 is not simply a bounced cheque. Thirty thousand of it is payable now, and the rest is enforceable.

What is still criminal

Criminal liability survives, but it attaches to conduct rather than to the shortfall. Under Federal Decree-Law No. 50 of 2022 it is confined to defined cases, among them:

Instructing the bank to stop payment outside the lawful grounds set out in Articles 651 and 656.

Closing the account, or withdrawing or freezing the balance, so that the cheque cannot be met.

Signing the cheque in a way that makes it impossible to pay.

Forgery.

In the cases under Articles 674 and 675, the criminal action ends on payment or settlement before final judgment.

What to do when a cheque comes back

Keep the original cheque and obtain the bank's return slip. Both are needed for whatever follows.

Read the reason for return before deciding anything else.

Take advice before contacting the drawer, because what is said at that stage can affect the position later.

Why the distinction is worth settling first

Starting on the wrong basis costs time and money, and sometimes weakens the position that was available at the outset. Working out which category the cheque falls into is a short exercise, and it determines the route, the cost and how long the matter takes.