Bounced Cheque Could Have Serious Impact on Expats in UAE

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A recent case involving an expat who bounced a cheque in Abu Dhabi could have serious repercussions for Britons living in the UAE.

The case concerns Amanda Allen, a British expat who bought a property in Abu Dhabi. She took out a loan from a local bank in May 2008, and signed an undated cheque as security.

Ms Allen defaulted on the loan a year later, and the security cheque bounced.

In the UAE, undated or postdated cheques are regularly used as security for all kinds of business transactions, and bouncing a cheque is treated as a criminal offence – whether or not there was criminal intent.

Consequently, when Mrs Allen returned to the UK, she was convicted by an Abu Dhabi criminal court to three years’ imprisonment in absentia for “issuing an uncovered cheque”.

The UAE tried to bring her back to serve out her sentence, claiming that she had committed an act of fraud, which is an offence in both countries and therefore extraditable.

But the UK courts have refused, saying that there may be many honest reasons for defaulting on a 20-year loan.

Last month, an appeal from the UAE was rejected in the UK’s High Court, with magistrate district judge Quentin Purdy ruling that he did not consider that “default in a loan agreement supported by the security of an undated cheque could of itself amount to an offence in the UK”.

Experts say the decision may have set an important precedent, because UAE banks may now decide to turn down loan applications from Britons and expats from other countries that do not always recognise issuing a bounced cheque as a criminal offence.

For the full article see The Telegraph

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