B. Unification of the Law

7. As a result of the wide-spread international use of debit transfers arising out of the collection of cheques and bills of exchange, there have been several different efforts at unification of the law governing negotiable instruments and their collection. The most successful to date have been the Uniform Law on Bills of Exchange and Promissory Notes and the Uniform Law on Cheques, which were adopted by the League of Nations in 1930 and 1931. A more recent effort is the United Nations Convention on International Bills of Exchange and International Promissory Notes, which was prepared by UNCITRAL and adopted by the General Assembly in 1988. The UNCITRAL Convention is designed for optional use in international trade (for information on that Convention see explanatory note in A/CN.9/386). To complement these intergovernmental efforts, the International Chamber of Commerce has formulated the Uniform Rules for Collections (ICC Publication No. 322), which have been adopted by banks in over 130 States and territories to govern the means by which banks collect drafts internationally. The Uniform Rules for Collections are under revision at the time of writing. Conversely, until recently there had been little interest in unifying the law governing the international use of paper-based and telex credit transfers.

8. The situation began to change in 1975 when the first international inter-bank computer-to-computer message system came into service. Concurrently, electronic funds transfer systems for business or consumer use were beginning to appear in a number of countries. Since it was not clear whether the rules governing paper-based funds transfers should or would be applied to electronic funds transfers in whole or in part, UNCITRAL's first effort was to prepare the UNCITRAL Legal Guide on Electronic Funds Transfers (A/CN.9/SER.B/1, Sales No. E.87.V.9). The Legal Guide explored the legal issues that would have to be faced in moving from a paper-based to an electronic funds transfer system. Since the focus of the Legal Guide was on the impact of the shift from paper to electronics, it discussed both debit and credit transfers.

9. When UNCITRAL authorized the publication of the Legal Guide in 1986, it also decided to prepare model legal rules so as to "influence the development of" national practices and laws governing the newly developing means of making funds transfers. Subsequently, it was decided that the model legal rules should be adopted in the form of a model law, and that the model law should be drafted with a view to its adoption by States.