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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

E. Salient Features of the Model Law

5. Completion of credit transfer and its consequences

48. According to article 19(1), "a credit transfer is completed when the beneficiary's bank accepts a payment order for the benefit of the beneficiary". At that point the banking system has completed its obligations to the originator. The beneficiary's bank's subsequent failure to act properly, if that should occur, is the beneficiary's concern. It is not covered by the Model Law but is left to the law otherwise regulating the account relationship.

49. Article 19(1) further provides that, "when the credit transfer is completed, the beneficiary's bank becomes indebted to the beneficiary to the extent of the payment order accepted by it". The Model Law does not enter into the question as to when the beneficiary's bank must credit the beneficiary's account or when it must make the funds available. Those are matters to be governed by the otherwise applicable law governing the account relationship, including any contractual arrangements between the beneficiary and the beneficiary's bank.

50. In many credit transfers the originator and the beneficiary are the same person; the bank customer is merely shifting its funds from one bank to another. In such a case completion of the credit transfer obviously does not change the legal relationship between the originator and the beneficiary. Completion of the credit transfer changes only the relationships between the customer as originator and the originator's bank and between the customer as beneficiary and the beneficiary's bank.

51. Other credit transfers are for the purpose of discharging an obligation due from the originator to the beneficiary. Many delegates to UNCITRAL thought that the Model Law should provide that completion of the credit transfer would discharge the obligation to the extent that the obligation would be discharged by payment of the same amount in cash. Other delegates did not think the Model Law should contain such a rule, either because they did not believe that a rule on discharge of an obligation arising out of contract or otherwise should be included in a law on the banking transaction or because they did not believe that the rule proposed was correct. The position finally taken in UNCITRAL was to include the rule in a footnote to article 19 "for States that may wish to adopt it".


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