FTI CALLS ON HSBC AND THE UK GOVERNMENT TO PUBLICLY OPPOSE THE USE OF IMPRISONMENT FOR DEBT

HSBC Headquarters, Dubai UAE

For Immediate Release

Fair Trials International has today written to the Head of HSBC Bank in the UAE following his reported comments that imprisonment is an effective method to recover debt, despite the fact that this is prohibited under international law. The human rights charity has also urged the British Government to use its improved trade links with the UAE to protect British investors against imprisonment for non-payment of debt.

Jago Russell, Chief Executive of Fair Trials International said:

“Debtors’ prisons are not confined to the Victorian England of Charles Dickens’ novels; they are alive and kicking in Dubai’s shining financial centre. We hope the British Government will use its improved trade links with the UAE to protect British investors from imprisonment for bounced cheques and urge the HSBC and other banks in the region to demand an end to this unacceptable practice.”

The UAE’s harsh criminal laws impose lengthy prison sentences for bounced cheques. Since the downturn in their economy, the number of debtors in UAE prisons has grown significantly and includes a large number of foreign investors. The UAE Government recently announced a review of the UAE’s bounced cheque laws. We fear that these legal reforms could be threatened by the recent reported comments of Mr Abdulfattah Sharaf (Head of HSBC Bank in the UAE) that jailing debtors in the UAE remains an effective way for banks to recover bad loans. We are urging HSBC and other banks in the UAE to oppose the use of imprisonment for debt. We are also are urging the UK Government to use its growing trade links to call for legislative reform to protect British investors.

For more information please contact Fair Trials International on +44 (0)20 7822 2378 or +44 (0)7950 849 851

Notes to Editors

1. Fair Trials International is a human rights charity which provides assistance to people arrested in a country other than their own and campaigns for reform to fight the underlying causes of injustice in cross-border cases.
    
2. The letters from Fair Trials International to Rt Hon William Hague MP, Foreign Secretary, and Mr Abdulfattah Sharaf, Chief Executive of Personal Financial Services Middle East, are available to download below.
    
3. The cases of Safi Qurashi, Mustafa Nagri and Yusuf Nagri are indicative of the plight of a growing number of investors in the UAE imprisoned for non-payment of debts. After founding a company in the UAE, specialising in developing luxury waterfront properties, they were arrested by the police in 2010 and accused of issuing cheques that bounced. Although they explained that these were security cheques and were not intended to be cashed, they were given lengthy prison sentences.
    
4. Legislative review:
   The Federal National Council (FNC) of the UAE has recently announced a review of the country’s laws criminalising bounced cheques. Sheikh Saif bin Zayed, the Deputy Prime Minister and Minister of Interior, is expected to outline the UAE’s policies on bounced cheques in a written response to the FNC.
    
5. Criminalisation of bounced cheques:
   Currently the UAE Penal Code creates a criminal offence for bounced cheques, punishable with a prison sentence of up to three years, for each cheque. In a country where the use of cheques is a widely accepted practice as security for business transactions, this has resulted in the arrest and imprisonment of many people. This is prohibited under international human rights law, including Article 18 of the Arab Charter on Human Rights which the UAE has ratified.
    
6. HSBC comments
   In an interview to Arabian Business, Mr Sharaf, commenting on jailing debtors, said:
   
   “It has worked for us. People immediately get people to come and bail them out, and get the money in... (historically) it did work. In most cases it did work,”
   “There has been a reduction in people running away from debt; in 2010 it has tremendously reduced. Yes, the restriction [jail] is good, when you can get your money back. But if you can’t get anything back, how am I going to benefit from people being in prison?”
   
   HSBC, Europe's biggest bank, has recently announced pre-tax profits of $19bn (£11.8bn) for 2010, more than double the $7.1bn figure for 2009.
    
7. The Foreign Secretary recently took a tour across the Middle East and highlighted the UAE’s key role in the Arab world. During his visit, the Foreign Secretary discussed with UAE Foreign Minister, His Highness Sheikh Abdullah bin Zayed al Nahyan and Minister of State His Excellency Dr Anwar Gargash, the strong bilateral relations between the UK and UAE. The talks built on last year’s State Visit by Her Majesty Queen Elizabeth II and the signing of the ‘2010 Abu Dhabi Declaration’ which reaffirmed the historical friendship between the two countries and committed to even closer cooperation on trade and investment, defence and foreign policy, education and culture.
   
   William Hague MP said in his speech on UK/UAE Partnership (Thursday 25 November 2010) that “The British government is committed to a relationship with the United Arab Emirates that is based on friendship, trust and equal partnership."