INTERPOL Red Notices - Update on Bankers' Use of INTERPOL's Tools to Enforce Private Debts

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The UAE banking crisis and its inappropriate involvement with INTERPOL Red Notices, which have been addressed here and here in this blog, appears to drag on still.  Parag Deulgaonkar reported recently for Emirates 24/7 that bankers in the UAE are still using INTERPOL's tools to immobilize expatriates who owe money to their financial institutions.  

As discussed in the previous posts on this issue, many expats who leave the UAE owing debts do so because they have lost their jobs, and therefore, their ability to legally remain in the Emirates.  Their lack of income often forces them to default on home mortgages, and while such an event would be treated as a civil matter in much of the world, creditors in the UAE have been permitted to seek and obtain criminal sanctions against such debtors.

The Emirates 24/7 article, here, quotes an anonymous bank official as saying that, if debtors leave the country and don't respond to requests for repayment, "we do pass their details on to Interpol."

While INTERPOL's tools are not permitted to be used for private debt collection purposes, financial institutions and law enforcement officials often label the "crime" of debtors as fraud, embezzlement, or some other variation of a financial offense.  They use that crime to obtain a Red Notice against the debtor, and the Red Notice is circulated among INTERPOL's 190 member countries.  Without knowing the history behind the Red Notice request, INTERPOL officials become unwitting accomplices to the improper use of Red Notices.

Calls for reform to the UAE's banking system have included complaints about the system's misuse of INTERPOL's tools.  While it is certain that the UAE's Red Notice abuse rose along with the financial crisis that exploded in 2008, and that stricter credit regulations will make a stronger UAE economny, it is not at all certain that new banking regulations will necessarily curb Red Notice abuse.

The Central Bank of the UAE is charged with the "formulation and implementation of banking, credit and monetary policies, to ensure the growth of the national economy of the UAE in a balanced manner."

Toward that end, the Central Bank has issued new regulations aimed at improving the region's financial stability with respect to lending. Home buyers will now be prohibited from mortgaging almost the entire amount of a home's sale price, and will not be permitted to utilize credit cards or loans for down payments. Financial observers have long blamed the 2008 financial crash at least in part on the UAE's failure to implement solid credit rating procedures.

For those individuals with pre-existing debts that have resulted in Red Notices, the new banking regulations will have no direct effect on their situations.  Additionally, those people who find themselves in dire financial straits in the future may still be forced to leave the UAE without paying off their debts.  Moreover, there is no indication that the UAE has adopted any measures that will prevent creditors from utilizing Red Notices against their debtors.  

All of this means that INTERPOL must act as its own watchdog against the abuse of Red Notices for the settlement of civil disputes.  The next post will address the warning signs of Red Notice abuse arising from financial disagreements.

 

Topics:  Debt Collection, Expatriates, INTERPOL, Red Notices

Published In: Criminal Law Updates, Finance & Banking Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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