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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

C. Scope of Application

1. Categories of transactions covered by Model Law

10. As indicated by its title, and in contrast to the Legal Guide, the Model Law applies to credit transfers. It does not apply to debit transfers, even when made in electronic form. The Model Law is not restricted to credit transfers made by computer-to-computer or other electronic techniques, even though it was the explosive growth of electronic credit transfer systems that brought about the need for the Model Law. Many credit transfers, both domestic and international, begin with a paper-based payment order from the originator to its bank to be followed by an inter-bank payment order in electronic form. Definition of an electronic credit transfer would, therefore, be difficult and unproductive. The appropriate solution for only a few legal issues seemed to depend on whether a payment order was in electronic or paper-based form. Appropriate rules have been drafted for those situations.

11. While many credit transfers require the services of only the originator's bank and the beneficiary's bank, other credit transfers require the services of one or more intermediary banks. In such a case the credit transfer is initiated by a payment order issued by the originator to the originator's bank, followed by payment orders from the originator's bank to the intermediary bank and from the intermediary bank to the beneficiary's bank. The credit transfer also requires payment by each of the three senders to its receiving bank. As expressed in article 2(a), a credit transfer, and therefore the transaction subject to the Model Law, includes the entire "series of operations, beginning with the originator's payment order, made for the purpose of placing funds at the disposal of a beneficiary".

12. The Model Law is by its own terms restricted to international credit transfers. In part that decision was taken in recognition of the fact that UNCITRAL was created to unify the law governing international trade. An additional reason was that, while all countries face essentially the same legal and practical problems in implementing international credit transfers, the circumstances in which domestic credit transfers are carried out vary significantly.

13. The criteria set out in article 1 to determine whether a credit transfer is international, and therefore subject to the Model Law, is whether any sending bank and any receiving bank in the credit transfer are in different States. Once there is a sending and a receiving bank in different States, every aspect of the credit transfer is within the scope of the Model Law.

14. Although the means of making domestic credit transfers in some countries vary significantly from the means used for international credit transfers, the Commission recognized that none of the substantive rules in the Model Law were appropriate only for international credit transfers. Therefore, some States might wish to adopt the Model Law to govern their domestic credit transfers as well as their international credit transfers, thereby assuring unity of the law. All that would be necessary would be to change the scope of application in article 1.

15. Credit transfers may be made by individuals for personal reasons as well as by businesses for commercial reasons. Some countries have special consumer protection laws that govern certain aspects of a credit transfer. The footnote to article 1 recognizes that any such consumer protection law may take precedence over the provisions in the Model Law. If an individual is an originator or a beneficiary of a credit transfer, its rights and obligations would be governed by the Model Law, subject to any consumer protection law that might be applicable.


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