The United Arab Emirates (UAE) has a population of 9.6 million people, of which approximately 90% are expatriates. Despite the pleasant weather and a relatively laid-back atmosphere, these factors are actually additional incentives to the main reasons why individuals come to the UAE. The country’s strong financial liquidity and tax-free income, as well as the presence of a stable government, are all reasons to attract hard-working people from around the world.

However, due to the high level of investment and spending in the region, individuals who have been placed in positions of authority and trust might be tempted to engage in fraud. This essay offers a brief overview of one among the most frequently utilized criminal offences accessible to victims in such cases.

Breach of trust

Federal Law No. 3 of 1987, as amended (Penal Code), is the primary legislation governing crimes in the UAE. Although there are several laws in the Penal Code that may be used to combat business-related crimes, one crime is particularly well-suited to the all-too-frequent situation of a trusted advisor, employee, or commercial partner taking advantage of their position to the disadvantage of their principal, partner or partner. A breach of trust is what this charge is termed.

Article 404 of the Penal Code, an unauthorized translation of which is as follows, provides for the offence of breach of trust:

Article 404: Any person who embezzles, misuses, or dissipates money, securities, or any other movable property with the intention of harming the interests of the true owner is guilty of a misdemeanor and shall be sentenced to imprisonment or fined.

A proxy is any partner in joint property, any agent of necessity with respect to the property of the concerned party, and any person to whom anything is committed to being used for a specific purpose for the benefit of its owner or another.

In other words, the wording of the breach of trust provision implies that each partner in a shared property is a trustee over the other’s portion. This includes partners in a firm with regard to company funds, in practice.

This section, therefore, allows employers or business partners who have been harmed by criminal employees or business partners to seek justice and compensation for losses incurred as a result of the other party’s criminal conduct.

A breach of trust conviction results in a penalty intended to deter individuals in the UAE from committing similar offenses. The Penal Code allows for confinement or a fine, each of which is determined depending on the offender’s culpability and is based on the crime’s classification.

The penalty for a breach of trust is now imprisonment of between one month and three years, with a maximum fine of 100 to 30,000 UAE dirham (US$27 and 8,167).

A contemporary option

In certain situations, it may be feasible to bring a case under Federal Law No. 5 of 2012 (Cyber Crimes Law) if a computer was utilized in the commission of the crime. The penalties in the Cyber Crimes Law are greater than those provided by the Penal Code alone in some cases. It is permissible in the following instances:

• Electronic document forgery
• Use of a falsified electronic document with knowledge;
• Obtaining property unlawfully or without legal authority through the use of an information technology system;
• Using an IT system to gain unauthorized access to bank account information; or
• Unauthorized access to a work IT system.

Accessing accounting records or bank details of individuals or clients to steal or fraudulently obtain funds, as well as changing invoices so that payments are made to the offender’s account, are just a few examples of ways in which this might happen.

Examples of this problem include reviewing accounting papers or bank accounts of staff or customers to steal money or fraudulently acquire funds, as well as changing invoices so that payments are made to the offender’s account.

Making a compensation claim

Although breach of trust is a criminal offense in the UAE, it may be filed as a civil action under the country’s civil law system. The victim’s claim will run alongside the criminal complaint, allowing the victim to ask for compensation. Depending on the conclusion of the criminal case, however, a precise amount of compensation will be determined by a civil court – if the crime is proven.

Joining a criminal complaint as a civil claimant can provide the victim access to the public prosecution, allowing him or her to file memoranda and submit evidence in support of the case. The ability to provide the public prosecution with information in the victim’s (or their lawyer’s) own words is frequently a big help. Expert reports may be used to present evidence in a clear and convincing manner, raising the possibility of a successful prosecution and, as a result, compensation for the victim.

Bottom line

The UAE is a land of promise. Unfortunately, it applies to crime as much as it does to honest and hard-working individuals. A number of fact situations may be detected by the Penal Code owing to the breadth of the breach of trust provision, however. This is an particularly useful tool for individuals who have been the victims of white-collar crime, as it may be used in tandem with a civil lawsuit for compensation.