In a recent post, I addressed the issue of companies in the United Arab Emirates using INTERPOL’s channels to enforce civil debts.  As discussed there, it seemed for a time that the UAE had changed course and was no longer utilizing INTERPOL Red Notices to hunt down people who were wanted for bouncing “security checks.”  These checks are typically required by lending institutions for the full amount of a mortgage when a company or individual takes out a loan for a mortgage.  If a payment is missed, whether due to a lost job or illness or loss of legal status in the UAE, the check is cashed.  It promptly bounces, and forms the basis for a criminal charge.

Many of the underlying Red Notices for such checks were reportedly removed from INTERPOL’s website, and change seemed to be afoot.  But not so fast.

While the UAE has decriminalized security check bouncing for its nationals who have agreed to participate in a type of loan forgiveness/repayment program, foreign nationals still face criminal charges for bounced security checks, regardless of the reason for the insufficient funds.

Some may ask why one shouldn’t face criminal charges and extradition for bouncing a check, particularly when the check is written for such a significant value as is typcial of most mortgages.  The answer is that, while UAE law requires a fraudulent intent at the time the check is written in order to form the basis for a criminal charge, that intent is routinely overlooked and assumed in practice in the UAE.  In other words, there is no distinction between the debtor who is forced to leave the UAE after losing his job, and therefore his legal status there, and the debtor who intentionally abandons his duty to pay a mortgage obligation.

Likewise, financial institutions seem to be making no such distinctions.  Anecdotally, there is recent evidence that financial institutions routinely threaten INTERPOL action against their debtors, and collection agencies openly refer to INTERPOL as one of their collection tools.

All of this activity is still occurring, despite the fact that the banking industry in the UAE has recognized that utilizing security checks is an outdated and ineffective means of securing loans.

The result of the UAE’s ongoing policy regarding foreign nationals and bounced security checks is that they still become (or remain) Red Notice subjects when security checks bounce.  This is true whether the reason for the bounced check is within the debtor’s control or not, and that fact makes the UAE’s bounced check charges inappropriate for Red Notices under INTERPOL’s rules.

As always, thoughts and comments are welcomed.