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The United Arab Emirates (UAE) has changed the law on bounced cheques, meaning that expatriates will no longer be imprisoned for the activity.
In the past it has been a serious criminal offence in the country to write cheques which default on the payment, but this has been abolished.
Those expats which have previously been jailed for the crime have been released and lenders presenting bounced cheques as evidence of a crime will no longer be accepted, reports The National.
This latest move is an expansion of an earlier measure which relaxed similar laws in relation to Emirati citizens in October 2012.
The president, Sheikh Khalifa, is keen that expats and Emiratis are seen to be treated equally, as the former group makes up a large proportion of the population.
Ali Khalfan Al Dhaheri, head of the legal affairs department at the Ministry of Presidential Affairs, told The National’s Arabic-language sister paper Al Ittihad: "In line with the directives of Sheikh Khalifa … and in the spirit of fairness and equality, the courts have stopped as of last month accepting collateral cheques presented as a criminal tool against expatriate debt defaulters."
It comes after 20 businessmen originally from outside of the Emirate went on hunger strike in Dubai's Central Jail in June to protest what they saw as excessively harsh penalties for financial crimes.
Bouncing cheques became more of an issue for expats who had built successful businesses during the boom years, when the property market crashed in 2008.
The UAE has bowed to widespread international pressure to reform its financial crime laws as calls for modernisation have abounded for a number of years.
Cheques that bounced were reported to be the reason for 20 per cent of the 2,400 inmates residing in Dubai's prisons during the financial crisis.
Dubai has a large expat community and many of its companies are largely run by businessmen who have moved to the Emirate from abroad.
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