The Phenomenon of the Constant Increase in Cases of Checks without Balance

• Studies conducted about the phenomenon.
• Its reasons and diagnosis.
• Its negative impacts.
• Necessities and reasons for remedy.
• Remedial recommendations and suggestions for encountering the phenomenon.

Introduction:

Kuwait Social Work Group has conducted a comprehensive field and survey study on the persons imprisoned for cases of checks without balance in the Public Prison (Talha Prison), Central Prison and Women Prison, numbered 468 prisoners.

This study was concerned with investigating the conditions of the imprisoned persons; in addition, it was concerned with studying the conditions of families and after imprisoning its provider.

This study is important because it revealed findings that would not have been shown without conducting such a study. It is also important because it is the first field scientific study conducted about the subject. It has closely addressed in practice the real reasons that led to the involvement of those imprisoned persons in such cases. It has also dealt with the invisible aspects which were not clear for a lot of people about the negative impacts resulting from this phenomenon on the lives of those imprisoned persons, the confusions of the lives of their families and their suffering as if this punishment were not only enforced against the imprisoned person but also included their families who did nothing in violation of law but they were surrounded by the care of those who were involved in such cases. This means that the numbers of years during which the involved persons are imprisoned for such cases in prison are met by suffering of their families, children, fathers, mother, old-aged and sick people who are the fathers and mothers of those sentenced persons, who experience suffering and torture equaling the number of years their sons are in prison. Thus, the punishment has included the involved persons, their wives, children, fathers and mothers.

The study has revealed, through findings reached, very important facts about the reasons that led to the development of this negative phenomenon which was reflected on individual persons, their families, children, society and economic life in general.

According to what is mentioned above, the phenomenon of checks without balance is one of the dangerous negative phenomena related to the security and safety of society, which has become a threat for its stability and social structure.

Thus, the study has focused on addressing this negative phenomenon with completely objectivity in attempt to reach the reasons and factors leading to it, which exceeded the mistakes of others who tried to interpret this phenomenon without following the rules of scientific method in studying social phenomena. They fell in the mistake of interpreting within the framework of the one factor because of the increase of this phenomenon; they kept away from the right path. This results in their failure to reach the proper remedy and successful encounter for this phenomenon, which we will handle in detail in the following pages in attempt to achieve the decisive encounter for this negative phenomenon.

Faysal Maziad Al-Masaud

Studies conducted about this phenomenon:

The First Study:

Kuwait Social Work Group has conducted a field study for the phenomenon, which included the persons imprisoned in cases of checks without balance in the Public Prison (Talha Prison), Central Prison and Women Prison. The study also included a great number of families whose family providers are imprisoned for such cases.

The study has taken nine months; the aim of conducting this study was to get to know the reasons of this phenomenon and its increase despite applying stricter punishment in check cases and to get to know the negative impacts reflected on the lives of the involved persons, their families, and children, social and economic life. The study revealed very important reasons and findings that should be taken into consideration due to the reflections they have on achieving security and peace of this society.

The Second Study:

It is a study about the opinion of Kuwaiti Bank Union about commuting the stipulated punishment of the crime of issuing checks without balance from a felony into a misdemeanor in its memorandum in regards thereof, dated 5/5/2002.

This memorandum has addressed the importance of the check as a mode of payment and not as a mode of guarantee. It also addressed the main function of the check in addition to the other modern billing modes. It also referred to an important and essential point, which is that the criminal protection with which the legislator surrounded the check was based on the fact that the check is a mode of payment not guarantee. The memorandum also referred to the misuse of checks as a mode of credit, in such a way that constitutes a deviation in the use of check out of the function it was issued for, which is as a mode of payment only. The credit check appeared in most conditions of selling in installments or when some financial institutions gave loans to be repaid in installments. Instead that the sellers or lenders study the financial conditions of their customers to make sure their customers are able pay for their commitments, they make them write blank checks or checks with deferred dates for the value of the deferred installments. Obviously, this means that they have misused the check by making it a mode of guarantee and not a mode of payment and they used it out of its function, exploiting the criminal punishment of the check without balance and the protection with which the legislator surrounded the check on the basis that it is a mode of payment. This is the axis of the outbreak and widespread of the phenomenon of the constant increase in the cases of checks without balance.

The memorandum has referred, in an important aspect, to the negative effects of using the check as a mode of credit (guarantee) including going back with legislation and law to the system of physical coercion for the necessity of civil and commercial rights and this is what is disapproved by most of the contemporary legislations and even the constitutions of some countries prohibit it.

In addition, the memorandum referred to the modern modes of payment such as credit cards (ATMs) and the explanation thereof. The memorandum also included some recommendations and suggestions representing the opinion of local banks and mentioned in the opinion of Kuwait Bank Union and the conclusion which the memorandum has reached.

Commenting on both studies about the phenomenon:

First: Kuwait Social Work Group study:

1-      The study conducted by Kuwait Social Work Group was well prepared for being conducted and was planned for implementation according to the rules of the objective scientific method in an attempt to reach the real reasons behind the constant increase in the cases of checks related to the persons involved in such cases, studying their conditions in the field reality, studying the conditions of their families, the negative effects of the increase  of this phenomena reflected on the involved persons, their families and children, their social and economic life. This is in addition to the suffering experienced by those individuals, their families and the problems created by this phenomenon in the Kuwaiti society as well as the burdens borne by the State in encountering such problems and negative effects.

2-      The study conducted by Kuwait Social Work Group did not interpret the phenomenon in the framework of the single factor; rather, it depended on interpreting the phenomenon, getting acquainted with its reasons from several aspects and within the framework of scientific hypotheses and questions answered by the study in attempt to reach the reason that led to the occurrence of such a negative phenomenon.

3-      This study has used some tools for collecting information that was rationalized and checked for credibility before applying it to achieve the highest rates of validity and reliability in the results thereof which we have addressed with objective and scientific analysis and interpretation.

4-      The techniques used before applying the questionnaires including preparing the imprisoned persons for the objectives of the study, the effort made by male and female researchers including reading a thesis oriented for such purposes, made the individuals feel secure towards researcher and led them to give the required information about the phenomenon without feeling afraid of any legal consequences that might cause harm to them. Therefore, their answers were given with high rates of reliability and this confirmed some technical elements that were set in the questions of the questionnaire to make sure of the reliability of the examined person (the imprisoned person).

Second: Kuwait Bank Union study:

1-       The study submitted by Kuwait Bank Union handled the opinion of local banks from nearly one perspective in terms of that it focused on the importance and function of the check and the penal protection of the check as a mode of payment as stipulated by Article 237 of the Penal Code.

2-       This study has referred to some misuses of the check as a mode of credit (guarantee) and not as a mode of payment and the negative effects of misusing the check from a legal perspective only without reference to the other negative effects revealed by the study conducted by Kuwait Social Work Group which indicated these negative impacts on the individual, family, society, economic condition, security authorities and judicial authorities as well as the burdens borne by the State for encountering such a phenomenon.

3-       Among the disadvantages of Kuwait Bank Union study is that it clearly referred to the misuse of checks as a mode of guarantee and the negative impacts resulting from this; however, it did not suggest or recommend lifting the criminal protection on the check and considering it like any other modern mode of payment that is not subject to such protection nor to prohibition as the check is subject to incrimination.

4-       Kuwait Bank Union submitted proposals and recommendations for putting an end to this negative phenomenon. However, the disadvantage it has is that these proposals and recommendations need  a long period of time for being implemented, while Kuwait Social Work Group concluded that a radical, quick and decisive solution shall be set in the framework of early intervention for protecting individuals from being involved cases of checks without balance to protect the entity involved persons' families against being involved in cases of checks without balance to protect the entity of family against disintegration and minimizing the other social and economic problems resulting from this phenomenon.

5-       The study submitted by Kuwait Bank Union did not handle at all the considerable burdens borne by the State because of the widespread of this negative phenomenon. This was taken into consideration by Kuwait Social Work Group which highlights these burdens which could be spent in what is more useful for achieving growth rates for the good of citizens.

The First Study:

(Kuwait Social Work Group)

Study Findings

      Reasons & Diagnosis:

1-                   The study proved that 64.3 of those involved in cases of checks were among those working in governmental jobs and made commercial projects without having the enough experience in business and their monthly income is limited.

2-                   The majority of those imprisoned have been exposed to be fired from work or resorted to early retirement and resignation because of enforcing the sentences issued against them. This means that the governmental sector loses the national human cadres because of the constant increase in cases of checks.

3-                   The study proved the majority of the involved persons have misused the check as a mode of guarantee and not as a mode of payment and at a percentage of 74.8% and the beneficiary exploited the penal protection of the check in causing harm to the involved person despite knowing that these checks have no balance, which confirms the band intentions of the beneficiary. Hence, the check lost its credibility in facilitating transactions and changed from a mode of payment to a mode of guarantee, which made be out of its real function. This makes it necessary to reconsider the legislation and reconsider its rationalization and lifting the penal protection that the check has.

4-                   The study proved that 48.5% of the involved persons have been exposed to repeated because of making losing deals and their lack of experience in the conditions of market, trade and money because, as previously mentioned, most of them were working in governmental jobs and their monthly income is limited and they have no other resources of income.

5-                   The study proved and confirmed 42.52% of those imprisoned persons got involved in losing deals because some market brokers surrounded them and tempted them with abundant profit in such a way that is contradictory to the status quo, which led them to issue checks for high usurious interests that do not suit the expected financial revenue.

6-                   The study proved that 17.31% of the involved persons loaded their budgets with the burdens of installments of cars for a long period of time; these installments fatigued them and they resorted to cash their cars and sell them for very low prices, which led to increasing their financial crises.

7-                   The study proved that 16.67% have got involved in such cases because they withdrew checks for the benefit of third parties as per the intimate friendly relationships and as necessitated by the interests of transactions. This is also another image of the misuse of check as a mode of guarantee and not as a mode of payment.

8-                   The study proved that 49.2% of those sentenced ones have got involved in such cases because others did not pay for their financial commitments towards them. However, the beneficiaries misused these checks as a mode of payment and submitted them to the Public Prosecution depending on the date of issuing the check and not its maturity date. Therefore, they became criminals according to the stipulation of Article 237 of the Penal Code. Thus, this article does not strike the balance in interest between transactors; rather, it achieves the interest of the beneficiary and harms the interest of the check issuer, which is in the light of the misuse thereof and this was not the legislator's aim when setting the stipulation of the mentioned article.

9-                   The study proved that 41.5% of those sentenced in check cases were involved due to offers and facilities provided by the companies for buying in installment, which led the person, who suffer from financial crises, to buy from these companies in installment and cashing these goods and buying them for very low prices. This led them to more dangerous financial crises and made them in more friction with law for the punishment of the check crimes.

10-              The study proved that 35.5% of those involved in such cases got involved mainly because they made projects without having enough financial liquidity to cover the expenses of these projects, their success or continuation; they resorted to borrowing money from usurers for very tremendous interest rates under the veils of issuing checks as modes of guarantee and making use of law loopholes with the penal protection surrounding the check.

11- The study proved that 35.5 of those imprisoned for such cases got involved mainly because of their wrong estimations because of their lack of experience in organizing and managing commercial projects and not preparing the required economic feasibility studies.

12- The study proved that 30.3% of the imprisoned persons have been exposed to over prejudicing financial penal conditions imposed on them by beneficiary and they issued guarantee checks with their values in case of their inability to repay which made them unable to repay the debt and the value of the prejudicing financial penalties; thus, they were exposed to punishment stipulated by Article 237 of the Penal Code.

      13- The study confirmed that 30.6 of those imprisoned for such cases were involved mainly because of financial facilities granted by banks. This requires quickly setting information linking system between banks and companies of financing financial facilities to minimize or put an end to one of the reasons of their involvement in such cases and put an end to their being hindered in payment and not to waste the money of banks and financial institutions who get in the circle of debt losses.

14- The study also proved that there are other factors supporting the previous main factors which contribute to the increase of this negative phenomenon, which were revealed by the study even with low statistical ratios. However, these factors must not be ignored; they include that some persons got married and divorced several times were among those involved in such cases, extravagance and not setting a budget that strikes the balance between income and expenses, bearing financial burdens that exceed they can not afford because of the insistence of children, the growth of the consumptive tendency because of being affected by offers and means of advertising excitement, motivating persons to buy in such a way that they can not afford, ostentation and tendency to show off contributed to the involvement of those persons. This is in addition to the fact that some of the persons involved were gullible and easily tricked because of their too good intentions.

The study also indicated that 6.8 % of the persons involved have borne financial burdens that exceed their ability to buy medication for any of their family members and those had very human intents not criminal ones.

Its Negative Impacts:

1-      Applying stricter punishment in the check crimes led the involved persons to retire early or sell a share of their retirement pension, resignation or sell their houses and all they have own for very low prices to keep their social rank or avoid the imprisonment sentences.

2-      Those against whom imprisonment sentences were issued in cases of checks were fired from their work and the penal sentences were registered in their certificate of police record. As a result, they do not join work, which makes us lose national elements.

3-      The persons imprisoned in such cases have been morally harmed because of publishing the sentences issued against them in the official newspaper. This stigmatizes them as criminals; they lose their good reputation, social rank and they get exposed to bad social and psychological pressures and their social relationships were spoiled. They were also exposed to disapproval and refusal from the surrounding society members, which imposed compulsory social alienation against them after getting out of prison. This is in addition to the harms caused to their sons and daughters because of the social look at the prisoner or those released after serving their imprisonment term.

4-      A big number of the persons imprisoned in such cases were afflicted with dangerous diseases such high blood pressure, stomach ulcers, heart diseases, etc, because of tension and angry feelings, which are all diseases incurring considerable financial burdens upon the State for the remedy thereof.

5-      A great number of the persons sentenced in such cases were afflicted with psychological disorders such as anxieties, obsessions, depression, pessimism and painful feelings because of being imprisoned.

6-      The constant increase in the cases of checks without balance because of applying stricter punishment according to the stipulation of Article 237 has become a dangerous focus for the emergence of other social problems such as divorce drug taking and wine drinking, repeated school retardation and failure, juvenile deviation, which are all problems that constitute threats for the intact social structure.

7-      Other numbers of citizens have escaped from one country to another for fear of serving imprisonment sentences in the light of applying stricter punishment imposed by the stipulation of Article 237 of the Penal Code. This means that they banished themselves and were deprived of the bliss of security, stability and emotional warmness which they were enjoying with their families and within their homeland.

8-      The families of the imprisoned persons were also exposed to punishment imposed by the stipulation of Article 237 and its effect extended to them because of the suffering and bad social and psychological pressures imposed by this Article because of imprisoning the family provider. This means that the punishment did not only harm the involved person but also extended to include his family with its side effects.

9-      The families of the involved person were destroyed after their providers were imprisoned in case of checks because of high rates of divorce among the sentenced persons and their wives, the scattering of their children, lacking proper care; the children lost security and stability in such a way that threatens the entity of society and its stability.

Requirements and Reasons for Remedy:

1-      The constant increase of the cases of checks without balance constitutes a very dangerous phenomenon that threatens the social structure, its security, stability and safety. It throws its bleak lights on the life of the individual, family and society.

2-      In the light of the scientific study conducted by Kuwait Social Work Group and the highly-important findings it has revealed, the lights it shed on the negative impacts of this phenomenon which requires quick and decisive intervention to put an end to its reasons, remedy it and protect society from its dangers. We will handle the requirements of remedying this phenomenon.

First: Legal and Legislative Requirements:

1-       The legal and legislative reality requires reconsidering as soon as possible the legal articles regarding the incrimination of the check. Field and practical reality reveals that these articles are inappropriate for the nature of the age in which we live; Article 237 of the Penal Code no. 16 for the year 1960, amended by Law no. 15 for the year 1978, considering the check crimes as a felony and applying stricter punishments to minimize them and deter the committers thereof. However, the legislator's aim was not achieved; rather, the check crimes remarkably increased and society has become encountering a dangerous phenomenon. Reality reveals that it is necessary to reconsider Article 237 by nullifying it or changing it into a misdemeanor. This is also true of Article 554 of Trade Law, which is required to be nullified. It is sufficient to keep the stipulation of Article 510 of this law, which deals with the provisions of the check, to deal with it as dealt with the bill of exchange in such a way that does not interfere with its identity.

2-       There are essential reasons for making necessary amendments and nullify unnecessary provisions in the Penal Code and Trade Law regarding checks, which are:

3-       Applying stricter punishment in check cases did not achieve the legislative aimed aspired by the legislator; the official statistics for the check crimes prove high rates among other crimes. In addition, despite applying stricter punishment, the check crimes register continuous high increasing rates. This means that the high or low rates of crimes are not related to commuting the punishment or applying stricter punishment; rather, it is related to other matters that have to be taken into consideration and should not be ignored.

4-       The legislator still keeps the right to amend applicable laws and legislations or nullify some of their stipulations as necessary for the needs of society, in such a way that keeps up with social and economic changes and the loopholes revealed in the stipulations of law. This is because when the legislator sets a law, it aims at achieving security, stability and safety of society.

5-       In this age, the check has no longer the only mode of payment or paying financial commitments; rather, there are several billing modes that replace the check in addition to several modes and tools, the use of which does not result in any crime as is the case in the issue of incriminating the check.

6-       It is legally decided that the check is a mode of paying rights and paying for financial commitments for the beneficiary. However, the widespread misuse of checks as a mode of guarantee and exploiting the penal protection thereof made it a means for blackmail and threat. Hence, the misuse of check has made it be out of its function as a mode of payment. The companies selling in installments and usurers kept to it in such a way that led to the constant growth in the number of cases of checks. Therefore, the first requirement of remedy is to end the penal and legal protection of the check and this is the first approach for using the check again as a mode of payment.

7-       Nullifying the penal protection of the check in the light of its misuses will drive the beneficiary to use other contemporary modes of payment such ATM cards and credit cards and other modes in such a way that contribute to putting an end to the misuse of check and not use it out of its function or exploit it. As a result, we can strike balance between the interest of the drawer and that of the beneficiary without wasting the rights of any of them.

Second: Economic Requirements:

1-       Nullifying the penal protection of the check in the light of Article 237 of the Penal Code will lead to putting an end to fraud, trickery, blackmail and cheating in financial and commercial transactions practiced by brokers and usurers against their involved victims.

2-       Driving the companies which sell in installments to develop modes and ways of selling in installments in the framework of minimizing the involvement of persons in buying goods and cashing them or selling them for very low prices. This is to minimize the involvement of those persons in financial crises and not being subject to blackmail.

3-       Keeping the credibility of the check in facilitating commercial transaction, paying for rights, not to use it out of its real function, rationalizing its uses without causing harm to the seller or buyer; thus not to cause harm to economic growth, or hindering the commercial activity in the territories. And this is not achieved except with lifting the penal protection on the check.

4-       Putting an end to the phenomenon the involvement of some person in withdrawing checks for the benefit of third parties; consequently, putting an end to one of the misuses of check as a mode of guarantee and not as a mode of payment through nullifying penal and legal protection of  the check stipulated by Article 237 of the Penal Code.

Third: Social Requirements:

1-       These requirements are the most important ones, which are the invisible ones that should drive us to reconsider Article 237 of the Penal Code. This is because the punishment in the check crime does not harm the involved person only; rather, it extends to his family members. Therefore, we crystallize these social requirements as follows:

2-       The person who experiences hard time or have troubles in repaying his debt can not be counted as a professional criminal nor belongs to the community of crime, nor can be stigmatized as a criminal except as stipulated by Article 237 of the Penal Code. They should not be classified even within the limit of the incidental criminal; they are persons who were subject to blackmail and exploitation in the light of hard financial conditions that led them to write a check for enormous usurious interest rates within the framework of deception and exploiting the legal stipulation and in such a way that contradicts with what was intended by the legislator.

3-       The continuity of providing penal protection of the check by applying stricter punishment of imprisonment makes the legislative renaissance achieved by the State of Kuwait go backwards to apply punishments of physical coercion for the necessity of civil and commercial rights, which is disapproved of by the constitutions of other countries. This is in addition to the reflections left by legal loopholes on the social life in general.

4-       Kuwaiti society has been accustomed to solidarity, social integration and being merciful to one another. The continuity of applying stricter punishment in the check crime as per the provisions of Article 237 will lead to the emergence of a state of discordance, negativism and disintegration that leads to the collapse of social structure and society lacks social peace and security.

5-       Kuwaiti society undergoes quick economic and social changes. This makes it necessary to reconsider laws and regulations in such a way that suits the nature of the age in which we live. This is in addition to the fact that is important to purify laws from impurities that negatively affect our social and economic life and in such a way that facilitates transactions, regains trust among transactors and traders who have the ability to renounce anyone who has tampered or resorted to double-dealing methods.

6-       Because of imprisoning the providers of the Kuwaiti family in the cases of checks, this wastes their dignity and threatens its structure, the future of its members and leads to the emergence of several social problems that exhaust the efforts of the State for long years and wastes money that will be need by next generations in the development projects that achieve the prosperity and progress of society.

Fourth: Sharia Requirements:

1-    Our Islamic Sharia, a one of tolerance, fraternity, mercifulness and intimacy is a Sharia that spreads security, tranquility, peace, doing good deeds, disapproving evils and sins,  and calls for good tolerance and reforming hearts.

2-    Hence, taking guidance from the spirit of our Islamic Sharia, a person who has financial problems should not be harmed if he is unable to repay his debt. Therefore, the penal protection should be lifted on the checks. This is according to the saying of Allah the Almighty, "O you who believe! When you contract a debt for a fixed period, write it down". Therefore, writing down the debt comes in the framework of safeguarding the rights of creditors with the debtor, overlooking the errors of forgetfulness and death to keep honesty without applying punishment, penalty, imprisonment or obtaining usurious interests.

3-    The saying of Allah the Almighty is very clear and has no ambiguity.

4-    Messenger of Allah (Pbuh) urges us to be merciful to one another, estimate the conditions of the needy persons, helping them, lending them, getting retribution for helping the needy person. Messenger of Allah (Pbuh) says "He who gives enough time for the person who has hard times in order that this person can repay his debt, he shall have alms for each day given till the maturity day comes and if the maturity day comes and he give more time, he shall have twice the retribution for each day" (narrated by Ahmed). Consequently, the stipulation of Article 237 of the Penal Code should be reconsidered with the punishment it stipulates for the debtor who has hard times in repaying his debt. The punishment should be replaced by a stipulation that allows this debtor in hard times to have enough time to repay his debt to his creditor without being harmed or harming his family in order to keep the Muslim society intact. This is because avoiding harms is given priority over bringing about benefits.

5-    Allah the Almighty guides us directly to facilitating for the debtor in financial troubles, by saying in His Holy Qur'an " And if a debtor is in a hard time (has no money), then grant him time till it is easy for him to repay, but if you remit it by way of charity, that is better for you if you did but know". (True is Allah the Almighty, Al-Baqarah Sura, Verse 280).

6-    Thus, we should regard the debtor who is unable to repay the debt kindly and give him more time and opportunities till he pays for his creditor and this is one of the necessary matters in terms of Sharia.

7-    Messenger of Allah (Pbuh) says "He who relieves a believer from one of the agonies of the worldly life, Allah shall relieve him from one of the agonies of the day of judgement; he who facilitates for a debtor, unable to repay the debt, Allah facilitates for him in the worldly life and on the day of judgement" (narrated by Abi Hurayrah (May Allah be pleased with him) (Sahih Muslim). This assures the tolerance attitude towards the debtor who is unable to repay the debt so that he can repay the money he owes.

8-    Messenger of Allah (Pbuh) says "He who gives enough time to a debtor, Allah shall make him under His shade on the Day of Judgement, when there is no shade except Allah's".

9-    This is what makes us interpret the saying of our good Prophet and makes us give remedial suggestions for remedying such a phenomenon at the solidarity level.

10-                       Allah the Almighty says in His Holy Qur'an "Indeed, believers are brothers" , "Allah loves the charity men". There is no harm in this regard and man must love for his brother what he loves for himself. The creditor should not be interested in his interest only but he has to regard the harms to which the debtor, who is unable to pay, is exposed with his family and society. We are the members of one nation that was accustomed to love of good deeds and piety.

11-                       In Sahih Muslim, according to Hudayfa (may Allah be pleased with him), according to Prophet Mohamed (Pbuh): A man stood before Allah and Allah asked him "what have you done throughout your life?" The man said "I did nothing to seek Your satisfaction (said it thrice and in the third time said), O Allah, You gave me money abundant money in my worldly life and I gave facilities for the well-off and gave more enough time to the debtor who is unable to pay." Allah the Almighty said: We are worthier than you to do it instead of you; I have forgiven the sins of My bondman".

12-                       According to what is said above, we must follow what is mentioned in the Holy Qur'an and the Sunna of His Prophet Mohamed (Pbuh) to rectify ourselves, keep the safety and stability of our society, spread security and tranquility throughout our homeland. We have to lift the penal punishment of the check and search for other alternatives to encounter the inability of debtors to repay the debts through more tolerant mechanisms that provide facilities for the debtor in repaying the money he owes and keeping the rights of the creditor without wasting them.

Remedial Recommendations and Suggestions for Encountering the Phenomenon:

1-       In the light of the conclusion reached by the study of the phenomenon of the constant increase in the cases of checks without balance and the reasons revealed, which are related to the involved persons against whom sentences have been issued in such cases, the reasons related to their families, those related to the conditions of market, trade, money, banks and financial companies. This is in addition to the negative and dangerous impacts on the involved persons, the suffering of their families, harms caused to the social structure, threats to society's security, stability and safety. This is in addition to the considerable burdens borne by the State whether at the level of public expenditures or at the level of what the State's concerned ministries and authorities bear to encounter the negative impacts resulting from this phenomenon. Thus, this study attracts our attention that it is necessary to early intervene to put an end to such a negative phenomenon in the light of the reasons for its occurrence and the resulting effects. Therefore, suggestions and recommendations were branched as follows:

First: At the Legislative and Legal Level:

1-      Nullifying Article 237 of Law no. 16 for the year 1960, amended with Law no. 15 for the year 1978 and nullifying the penal protection of the check as a mode payment and not as a mode of guarantee. This is because this study proved that the majority of those sentenced in the cases of checks have misused the check in a purpose other than the one it was set for. The beneficiaries exploited issuing the checks because of the penal protection stipulated in the above article; they also misused it as a mode of guarantee. Hence, the cases of checks increased and the resulting negative effects also increased. By nullifying the stipulation of the above-mentioned article and lifting the penal protection on the check, it is possible to put an end to this phenomenon and transactors will be driven to use other modern modes of payment and follow more secure modes so as to avoid being exposed to social and psychological harms and avoid being stigmatized as criminals.

2-      Nullifying the stipulation of Article 554 of the Decree of Law no. 68 for the year 1980 of the Trade Law for the above reasons. This is in addition to not publishing the names of the persons sentenced in the cases of checks in the official newspaper in order to avoid exposing them to social and psychological harms and not to stigmatize them as criminals.

3-      Keeping the stipulation of Article 510 of the mentioned Trade Law because it is the most appropriate to facilitate financial transactions between the seller and buyer or between the check issuer and the beneficiary without causing harm to either of them or misusing the penal protection, from the part of either of them, that the check has in the light of the stipulations of Article 237 of the Penal Code and Article 554 of the Trade Law.

Second: At the Supervision Level:

1-     Subjugating all offices of care sale and cashing to the supervision of Chamber of Commerce to make sure that they do not sell in installments in return for signing checks. This is because this means that they know in advance that these checks have no balance. This shall also be done with some commercial companies that misuse the check  as a mode of guarantee in the framework of early intervention to put an end to such a phenomenon and returning the check to its right track as a mode of payment like any other mode of payment.

2-     We suggest creating a department or authority to be concerned with providing experience and consultation for those lacking experience in commercial or financial matters or organizing commercial projects and helping them to prepare economic feasibility studies for project they look forward to establishing in return for paying suitable fees.

3-     Creating a department at the Ministry of Interior to be concerned with following up the transactions of usurers who conceal behind illusive businesses in the framework of encountering the phenomenon.

4-     Subjugating the work of brokers for some sort of supervision through a resolution issued by the Ministry of Commerce to determine their activities, commissions and mechanisms of their work to prevent them from doing any usurious works that harm the interests of individuals, companies and economic condition in general.

Third: At the Level of Commercial and Financial Transactions:

1-                   It is necessary to set an information linking system among commercial companies, financial institutions and banks to include all the necessary information about persons who transact in installments or get loans from banks or financial institutions to prevent duality in granting loans or selling cars or other goods and in such a way that gives these authorities assurance that the customer is able to pay his financial commitments and put an end to the phenomenon of cashing to put an end to the phenomenon of checks without balance to prevent wasting the money of these companies, financial institutions and banks getting into the circle of wasted debts and thus being exposed to financial loss.

2-                   The Ministry of Commerce should issue a resolution to ban the use of check in commercial transactions to avoid the misuse of check as a mode of guarantee to put an end to this phenomenon and for properly using the check a mode of payment and regaining credibility to the check a mode of payment.

3-                   The banks should provide facilitations, encourage using modern modes of payment as a substitute for the check, not to consider it the main tool in commercial and financial transactions, encourage the spread of mechanisms of transactions by transfer from one account to another (transferring salary or deduction) and other mechanisms that guarantee protecting the beneficiary's rights and overcoming the activity of tamperers and usurers.

4-                   There should be coordination and agreement among banks through Kuwait Bank Union to set a system that guarantees the repayment of loans and obtaining sufficient guarantees before granting loans to person in such a way that guarantees their rights in repayment and gets persons to avoid the penal risk and the moral and material harms caused to them in case of non-payment.

5-                   In the framework of solving problems for the persons unable to repay debts, the banks, financial and commercial institutions should follow flexible policies through rescheduling the debts of those person in such a way that they become able to repay and without harming the interests of banks and financial and commercial institutions and this is in the framework of compromise and friendly solutions to achieve the joint interest of both parties.

6-                   It is necessary to set restrictions for granting loans and financial facilitations, rationalize providing these services for customers in such a way that guarantees the rights of the authorities granting this service and help persons avoid the negative impacts resulting from them.

7-                   It is important that the Ministry of Commerce issue a resolution to organize and rationalize setting penal conditions through determining a standard for a minimum and maximum for it in such a way that guarantees no prejudice or exaggeration in imposing penal conditions against the debtor who unable to pay to put an end to this phenomenon.

8-                   Banks and financial institutions should set an appropriate mechanism that guarantee that persons properly use loans and financial facilitations they obtain in such a way that guarantees no misuse or employing these loans in purposes other than the ones they were granted for.

9-                   The Ministry of Commerce should issue a resolution banning the withdrawal of checks as modes of guarantee to provide joint guarantees for third parties to prevent the misuse of check and setting restrictions and suitable conditions to provide joint guarantees in such a way that does not cause harm to the drawer or the beneficiary.

Fourth: At the Social and Media Level:

1-                Programs of social development should include the importance of spread awareness among Kuwaiti families about planning family budget to strike the balance between the income and expenditures, not to be extravagant in spending and economizing in achieving the demands of the family.

2-                It is important to acquaint the family with the appropriate methods and ways for encountering the constant growth in the consumptive tendency as one of the reasons for the occurrence of the phenomenon.

3-                It is important to guide the family through various mass media to minimize over-spoiling of children, meet their needs within the available limits of the family and not to make the family provider bear more than he can afford.

4-                It is important to get husbands and wives acquainted with the negative effects resulting from divorce and its social and financial burdens that threaten the coherence of society structure, leading to increasing its problems including the phenomenon of the constant increase in the cases of checks without balance.

5-                Getting individuals acquainted through mass media, especially those who work in the governmental sector, so as not to be subject to  the influence of brokers, usurers who give them unreal temptations of abundant profit, in such a way that protects them against getting involved in the cases of checks.

6-                The concerned authorities in the Ministry of Endowments should spread awareness about financial transactions, honesty, and faithfulness, non deviation towards usurious transactions or following double-dealing methods in transactions or cheating, directing attention to Sharia rules that has to be followed. This can be through Friday Speeches delivered in mosques or through appropriate awareness programs in the Ministry of Media.

Fifth: At the Solidarity Level:

1-                 We suggest establishing a support fund that can be financed from symbolic fees on commercial transactions of individuals, traders, commercial licenses and the renewal thereof. It can also be financed from the revenues of donations provided by people of charity for increasing the revenues of the fund, provided that these revenues shall be allocated for providing financial aid to those who are unable to repay debts or those who get involved in financial crises in such a way that helps them to avoid being involved in signing checks without balance after investigating their conditions and sufficiently studying them. The fund can also compromise between the transactors in the market to reach reconciliations in order to avoid legal and judicial confrontations, to minimize the negative impacts on the individual, family, society and economy, in such a way that is positively reflected on social peace and security.

2-                 It is important to impose a specific ratio on commercial contraventions to be added to the value specified for these contraventions for the good of financing the support fund in order to increase its revenues and increase its financial potentials to encounter the problems of the person who are unable to repay the debt and achieve reconciliation between the check withdrawer and beneficiary thereof to avoid legal and judicial confrontations.

3-                 We suggest that banks and financial institutions cooperate in providing proper support for this fund with a certain ratio from their annual net profit in such a way that contributes to the stability of financial transaction between the persons and these institutions as a practical alternative for judicial disputes and to protect the money of banks from being wasted.

Sixth: At the Security Level:

1-                  We suggest that the Ministry of Interior create social offices for reconciliation and settling disputes among rivals before following security and legal procedures in such a way that alleviates the burdens borne by judicial authorities on the one hand and the other hand minimizing the negative effects reflected on individuals, and to prevent the suffering of families in general whether regarding the subject of checks or other subjects. These offices shall include cadres from social or legal workers who have sufficient experience, in such a way that achieves the vitality of their roles in solving these disputes.

2-                  We suggest granting an appropriate deadline to help debtors who are unable to repay their debts before starting legal procedures which result in some impacts among which is the waste of the beneficiaries' rights.

The burdens borne by the State in encountering the constant increase in the cases of checks without balance:

1- In the framework of the State's responsibility for keeping security and stability, enforcing laws and achieving social adjustment in society, the State bears all the financial and human burdens resulting from enforcing such judicial rulings issued against the involved persons.

2- Here we are going to review the financial burdens borne by the ministries of the State for enforcing the rulings issued in the cases of checks and resulting from the enforcement of the provisions of Article 237 of the Penal Code in regards of incriminating the check and the criminal protection surrounding it, which necessitates reconsideration and lifting such protection and considering the check like any of the traditional or modern modes of payment.

The real volume of the phenomenon:

Official statistics issued by the Ministry of Interior confirms that the total number of person, against whom imprisonment sentences have been issued in crimes of checks without balance for the year 2001, has reached 4614 persons of which 237 of women and 4377 of men. The total of those, against whom issued sentences were enforced, reached 1302. Whereas those were sentenced but the sentences were not enforced, their number reached 3312.

Here, would like to indicate the following facts:

1-       Those persons, who were subject to study and sentenced to serve imprisonment punishments in cases of checks, do not represent the real volume of the phenomenon.

2-       The persons who did not serve the sentences issued against them represent three times the number of those who served the sentences issued against them. This means that they are invisible or left their homeland escaping from serving the punishment stipulated by law and as a result the citizens of the nation get scattered and this has its negative effects.

3-       Given that all the persons sentenced in cases of checks without balance have served the sentences issued against them, this means that the State will be in need of building new prisons, which will double financial burdens borne by the State. It will also result in negative effects on their families, which will constitute a threat for the social structure of this society. In addition, the society will not keep up with the contemporary trends in that it goes back to the system of physical coercion for the necessity of rights. This is because the contemporary trend is to replace the imprisonment punishment for other penal methods that are more civilized and more humane especially as most of the world countries do not incriminate the check or surround it with criminal protection as it is the situation in the Kuwaiti Penal Code. Among the developing countries which do not surround the check with criminal protection are the USA, the UK, France, Germany and the countries of the European Community in general.

Anyway, the nullification of Article 237 of the Penal Code and Article 554 of the Trade Law has become a necessary requirement for the good of the individual and society to help the Kuwaiti family avoid all the side effects it suffers from. This is in addition to alleviating financial and humane burdens borne by the State, keeping the resources of the State and directing them for the good of the processes of development in several fields.