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Julianne Greco

For a Bounced Check in Dubai, the Penalty Can Be Years in Jail - NYTimes.com - 0 views

www.nytimes.com/...12dubai.html

Dubai debt as criminal offense

shared by Julianne Greco on 12 Sep 09 - Cached
  • For more than a year, prosecutors have been cracking down on the corruption and kickbacks that thrived during the boom years in this Persian Gulf city-state
  • But alongside the con artists and crooks, a rising number of businesspeople have been sent to jail for going into debt. Bouncing a check is a criminal offense here. That fact has begun raising questions about the fairness of Dubai’s laws, especially among the foreigners who make up about 90 percent of the population.
  • he criminalization of debt has put a formidable weapon in the hands of landlords, banks and other creditors, who can send someone to jail with a single document showing a check has been returned for insufficient funds. It has also complicated Dubai’s efforts to recover from the financial crisis by sending many legitimate but struggling businesspeople to jail, where they find it even harder to repay their debts.
  • ...5 more annotations...
  • many expatriates to flee when they are in financial trouble rather than filing for bankruptcy and setting out a repayment schedule
  • Some financial analysts say the risk of arrest for debt could also drive away potential new investors and businesspeople as Dubai struggles to recover from the current economic slump.
  • The root of the problem, analysts say, is that Dubai’s legal structures have not kept pace with its frenetic development
  • Dubai’s laws are largely based on Egyptian civil law and Islamic law, or Shariah, with no real effort to encompass the tremendous volume of its commerce.
  • Some efforts have been made to change the system, though analysts worry that they may fade as the economic crisis recedes.
  • Julianne Greco on 12 Sep 09
     
    It's alarming how easy it is to commit a criminal offense. It is not hard to get debt or accumulate it in the business world, especially when the economy is not as good, so it's really not surprising that this could collapse Dubai's economy with the now minimal inclinations for businesses to take risks and low incentives for foreign investment.
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