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UNCITRAL Model Law On International Credit Transfers, 1992

CHAPTER I. - GENERAL PROVISIONS  1 

Article 1 - Sphere of application  2 

Article 2 - Definitions

Article 3 - Conditional instructions

Article 4 - Variation by agreement

CHAPTER II. - OBLIGATIONS OF THE PARTIES

Article 5 - Obligations of sender

Article 6 - Payment to receiving bank

Article 7 - Acceptance or rejection of a payment order by receiving bank other than the beneficiary's bank

Article 8 - Obligations of receiving bank other than the beneficiary's bank

Article 9 - Acceptance or rejection of a payment order by beneficiary's bank

Article 10 - Obligations of beneficiary's bank

Article 11 - Time for receiving bank to execute payment order and give notices

Article 12 - Revocation

CHAPTER III. - CONSEQUENCES OF FAILED, ERRONEOUS OR DELAYED CREDIT TRANSFERS

Article 13 - Assistance

Article 14 - Refund

Article 15 - Correction of underpayment

Article 16 - Restitution of overpayment

Article 17 - Liability for interest

Article 18 - Exclusivity of remedies

CHAPTER IV. COMPLETION OF CREDIT TRANSFER

Article 19 - Completion of credit transfer  3 

Explanatory Note by the UNCITRAL Secretariat on the Model Law on International Credit Transfers  4 

Introduction

A. Funds Transfers In General

B. Unification of the Law

C. Scope of Application

1. Categories of transactions covered by Model Law

2. Portions of an international credit transfer

D. Extent to which Model Law is Mandatory

E. Salient Features of the Model Law

1. Obligations of sender of payment order

2. Sender's payment to receiving bank

3. Obligations of receiving bank

4. Bank's liability for failure to perform one of its obligations

5. Completion of credit transfer and its consequences

Endnotes

Endnotes

Metadata

SiSU Metadata, document information

Manifest

SiSU Manifest, alternative outputs etc.

UNCITRAL Model Law On International Credit Transfers, 1992

United Nations (UN)

copy @ Lex Mercatoria

UNCITRAL Model Law On International Credit Transfers, 1992

Explanatory Note by the UNCITRAL Secretariat on the Model Law on International Credit Transfers

A. Funds Transfers In General

2. Until the mid-1970's a person who wished to transfer funds to another country, whether to pay an obligation or to provide itself with funds in that foreign country, had a limited number of ways in which to proceed. It could send its own personal or corporate cheque to the intended recipient of the funds, but international collection of such items was both slow and expensive. It could purchase from its bank a draft drawn by the bank on the bank's correspondent in the receiving country. Collection of such an international bank draft was faster than collection of a personal or corporate cheque since it was payable in the receiving country and in the funds of the receiving country.

3. A third and even faster procedure had also been available since the mid-nineteenth century. The originator's bank could send a payment order by telegraph to its correspondent bank in the receiving country instructing the receiving bank to pay the intended recipient of the funds. (The payment order could also be transmitted between the banks on paper. This is the common method for making funds transfers in many countries. However, it was less commonly used for international transfers.) While faster than the other two methods, the telegraph was a relatively expensive method of communication and it was prone to error. When telex replaced the telegraph, the basic banking transaction remained the same, but the cost was reduced and accuracy improved. That led to a gradual movement away from the use of bank cheques for international payments. With the introduction of computer-to-computer inter-bank telecommunications in the mid-1970's, the cost dropped still further, while speed and accuracy improved dramatically. The extension of computer-to-computer inter-bank telecommunication facilities to ever increasing numbers of countries means that the use of bank cheques for international funds transfers has drastically decreased and the role of telex transfers has been significantly reduced.

4. The collection of bank cheques, telex transfers and the newer computer-to-computer transfers have one important element in common: value is transferred from the originator to the beneficiary by a debit to the bank account of the originator and a credit to the bank account of the beneficiary. Settlement between the banks is also accomplished by debits and credits to appropriate accounts. Those accounts may be maintained between the banks concerned or with third banks, including the central bank of one or both countries.

5. There is also a striking difference between, on the one hand, the collection of a bank cheque (or the collection of a personal or corporate cheque) and, on the other hand, a telex or computer-to-computer transfer. The cheque is transmitted to the beneficiary by mail or other means outside banking channels. Therefore, the banking procedures to collect the cheque are initiated by the beneficiary of the funds transfer. A funds transfer in which the beneficiary of the funds transfer initiates the banking procedures is more and more often called a debit transfer. Collection of a bill of exchange or a promissory note is also a debit transfer, since the beneficiary of the funds transfer initiates the funds transfer, and there are other debit transfer techniques available, including some that are based on the use of computers.

6. In telex transfers and computer-to-computer transfers it is the originator of the funds transfer who begins the banking procedures by issuing a payment order to its bank to debit its account and to credit the account of the beneficiary. A funds transfer in which the originator of the funds transfer initiates the banking procedures is often called a credit transfer, and that is the term used in the Model Law.


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