Dubai toughens law against defrauders

The Dubai Government yesterday introduced tougher penalties of up to 20 years in jail for those convicted of defrauding state firms or private companies, but also said they should be released immediately if the money is returned. The new law is designed to "safeguard public and private funds in Dubai", according to a statement released by the office of Sheikh Mohammed bin Rashid, the Ruler of Dubai and Vice President of the UAE.

The law takes immediate effect, the statement said, and should serve to "protect Dubai's economic interests and preserve financial rights of individuals". "The law comes in line with Dubai's efforts to eradicate all forms of fraud, enhancing the emirate's position as a leading global business hub," the statement said. The new law formalises a sentencing structure, where typically people have been sentenced to a maximim of about five years in prison. They could now be sentenced to between five and 20 years.

The Chief Justice of the Dubai Criminal Courts, Judge Ahmed Ibrahim Saif, said yesterday the legislation would "serve the public interest and expedite the delivery of justice". The law stipulates the immediate release of those convicted of fraud should "they fully return the money to [its] lawful owners or through settlement agreements negotiated with their debtors". It also guarantees their right to access means of communications while in prison that could help retrieve stolen funds.

A number of senior executives in Dubai were tried following a sweeping campaign by the Dubai Government in March 2008 to combat corruption. So far that clampdown has resulted in 15 investigations and court cases involving 40 executives who were pursued for suspected crimes involving Dh3.7 billion (US$1bn), including theft and bribe-taking. Dubai courts have acquitted two former suspects and are reviewing the appeals of five others who have been indicted.

Nasser Saidi, a chief economist at the Dubai International Financial Centre, called the law "a good and a much needed" move. "This type of law serves the interests of the country by ensuring accountability," he said. "This is important for public money, that anyone who handles public money fraudulently is held accountable." Dr Saidi said introducing stringent sentences would also "help improve governance of government-related corporates".

The law will also strengthen current regulations, according to Eisa bin Haider, a lawyer and managing partner in Bin Haider Advocates and Legal Consultants in Dubai. Currently, the maximum penalty for embezzling public funds is three years in jail, a term that is extendable to another six months if applied under the civil code and up to one year if applied under the criminal code, he said. "Now the judiciary have the power to imprison a person up to 20 years, which is a long time, but also gives the repayment option and immediate release," said Mr bin Haider.

Mr bin Haider interpreted the public access provision to mean detainees would be able to use the telephone and internet to settle their cases. "This law came in the right time and is in the right place," he said. The Dubai Government has appointed an independent team with unprecedented powers from its financial audit department to open corruption cases. The target of the team's latest probe is the chairman of Dubai Properties, Hashim al Dabl. He was detained and is being questioned over allegations of acquiring illegal profits from property transactions amounting to Dh200 million during his tenure.

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