The fallout from the 2008 financial crisis is still being felt by many who left the UAE in a hurry. Since then, the UAE has become an extradition partner of the UK. The UAE has on numerous occasions sought from the UK the extradition of British (and other) nationals, many of them legitimate business owners, accused of having unpaid debts in the Emirates associated with the presentation of post-dated cheques. The UK has yet to extradite an individual for simply failing to honour a cheque.
INTERPOL, on the other hand, has routinely issued red notices at the request of the UAE for those who failed to honour a cheque, resulting in individuals being arrested and detained all over the world. Prior to the UAE Central Bank introducing direct debit systems in October 2013, it was common place for banks or lending institutions to insist that a borrower provide a post-dated signed cheque to cover the period of the loan repayment. Many UAE banks still require signed cheques to be provided as security for loans. In the event that a borrower fails to make a loan instalment, the post-dated cheque is presented for payment and then often bounces.
The UAE Federal Penal Code (Federal Law No. 3 of 1987) is not forgiving. It imposes criminal sanctions on any issuer of a bounced cheque. Until recently, the offence of ‘uttering an unfunded cheque’ under Article 401 of the Federal Penal Code carried a maximum penalty of three years imprisonment. The offence was routinely enforced. During the financial crisis it was reported that 20% of Dubai’s 2,400 inmates had been imprisoned for the offence. The 2008 recession in in the UAE witnessed construction sites grind to a halt and thousands of workers laid off. Jobless expatriates left the country in their droves. And then came the fallout. Many individuals with no previous convictions, who had started new lives elsewhere, suddenly found themselves on the receiving end of an INTERPOL red notice and, in some circumstances, an extradition request. The fallout continues to this day.
The UAE offence of ‘uttering an unfunded cheque’ is unlikely to constitute a criminal offence in the UK, with the result that the English courts would not permit extradition because there is no dual criminality. However, that is not the end of the matter. Historically, an INTERPOL red notice could be issued for the same offence. The conditions of Article 83 of INTERPOL’s Rules on the Processing of Data for the publication of red notices are easily met. Article 83 provides that a red notice may be published provided: (i) the offence concerned is a serious ordinary-law crime; (ii) the offence carries a sentence of at least two years imprisonment (if the person sought is wanted for prosecution) or the person wanted has been sentenced to at least six months imprisonment; and (iii) the request for publication of a red notice is of interest for the purposes of international police co-operation. If a red notice is published, it has the effect that individuals can be stopped, questioned and sometimes incarcerated on crossing an international border, with the risk that extradition proceedings may commence in a country with little defence protections. Little wonder that INTERPOL has faced widespread criticism in recent years for routinely issuing red notices for unfunded cheque cases – a white collar “crime” which isn’t recognised as a crime by many developed criminal justice systems.
But this unsatisfactory situation is now finally changing. In December 2017, new rules came into effect in Dubai under a criminal order issued by the Dubai Attorney General, Essam Al Humaidan, which re-categorised as a misdemeanour, the offence of uttering an unfunded cheque to the value of AED 200,000 (approximately £40,000). Such an offence will no longer be dealt with by a maximum penalty of three years imprisonment. Instead, those convicted of such an offence will be subject to a financial penalty rather than incarceration, and will be saved from having to be subject to court proceedings as the offence will be dealt with by the public prosecutor. The fines are levied on a sliding scale depending on the value of the unfunded cheque and range from between AED 2,000 to AED 10,000 (approximately £400 to £2,000).
Whilst this is a de-categorisation as opposed to a decriminalisation, the new rules should bring some respite to those who may be subject to a red notice in respect of this offence. The de-categorisation means that the offence of uttering an unfunded cheque (under the value of AED 200,000) will no longer meet the penalty threshold condition in Article 83 of INTERPOL’s Rules on the Processing of Data. Red notices will no longer be issued for this offence.
But where does this leave those who already have a red notice issued against them and what can be done? The answer will depend on the stage the proceedings in the UAE have reached and the status of the domestic arrest warrant on which the red notice has been obtained. Legal advice should be sought on whether the domestic warrant which underpins the red notice can be challenged in the UAE. If this cannot be challenged, representations should be made direct to the Commission for the Control of INTERPOL’s Files (“CCIF”) for the red notice to be removed.
How these representations will be analysed can be gleaned from INTERPOL’s recent decision to publish a further collection of redacted decisions by the CCIF, some of which deal with requests for the deletion of red notices sought by the UAE in respect of allegations of bounced cheques (although none apply to the recent change in the law). The decisions make clear that each application for the removal of a red notice is dealt with on a case by case basis, and the mere fact that the conduct would not be deemed criminal in one country is not a basis upon which to argue for the removal of a red notice. Two of these decisions illustrate the contrasting stances taken by the CCIF in relation to the applicant’s argument that red notices published for the offence of “uttering unfunded cheques” violate Article 83(a)(i) of INTERPOL’s Rules on the Processing of Data (the condition which states that red notices may not be published for offences relating to private matters and for offences originating from a violation of laws or regulations of an administrative nature). The CCIF found in decision No.4 of 2017 that insufficient justification had been provided by the UAE for the issuance of a red notice to demonstrate that the conduct of which the applicant was accused would constitute a criminal offence, rather than a commercial dispute arising from a breach of contract. Accordingly, the CCIF directed the removal of the data from INTERPOL’s database and the deletion of the red notice. Contrast that with decision No.12 of 2018 in which the CCIF relied upon the fact that the applicant had been convicted in his absence of presenting unfunded cheques in five different cases leading to the conclusion that this may depict a fraudulent scheme. As such, the CCIF found that the data challenged was compliant with INTERPOL’s rules and the application to have the red notice deleted was rejected.
For most people, the existence of a red notice is not simply an inconvenience, but has a crippling effect on their private and business lives. International travel becomes fraught with the risk of arrest, detention and in some cases extradition proceedings. In the absence of a positive immigration or extradition judgment that makes adverse findings about the UAE’s human rights record and how those findings would prejudice the particular individual, the best way to challenge a red notice is on the basis that it does not comply with INTERPOL’s own processing rules. The recent change in UAE law should galvanise individuals who have outstanding prosecutions for uttering an unfunded cheque under the value of AED 200,000 into taking positive steps to have their red notices removed. It is an opportunity for those who have, up until now, been afraid to address this issue: it provides a strong basis on which to challenge the validity of a red notice which can be mapped onto INTERPOL’s own rules and which should, after many years, bring an end to their Dubai debt sentence.
This article was originally published in the International Bar Association and can be accessed here, behind a paywall.