Work - Economics - domestic and international payments technique

To Work Pages Dorin M

Economics

Translation draft

Change (Deal - Bill of Exchange)

General elements

The Bill of Exchange scheme

The Bill of Exchange (treaty) is a document issued by one person (drawer) by which another person (drawer) is unconditionally ordered to pay a certain amount, at a certain term (due), in a specified place, to a third person named beneficiary. In international trade, the exporter generally appears as the shooter and possibly as the beneficiary and the importer as the shooter.

It is one of the oldest financial instruments being used since the 10th century by Arab traders and is also known as a treaty or policy. It is a document that contains a written and unconditional order given by one person (shooter) to another person (drawn) to pay a certain amount of money, at sight or at a certain maturity and in a certain place, to a third person (beneficiary).

In the commercial circuit, the bill of exchange fulfills the functions of means of payment, means of guarantee and means of credit, the obligatory elements that must be contained by it being obligatorily related to these functions. Thus, a bill of exchange, as a document, must contain:

- mandatory elements: the name of the bill of exchange (in the language in which the document was drafted), the unconditional payment order / to pay a certain amount (expressed in numbers and letters), the name of the bill, the due date as a fixed calendar date, at a certain number of days from the date of issuance of the bill of exchange - usually 30, 60, 90, 180 days - at sight or at a certain interval from presentation to acceptance, place of payment, beneficiary (name and address ), date and place of issue, drawing (name and address) of the shooter's autograph / handwritten signature (including the full family name);
- optional elements: interest, domicile, various mentions, etc.

The legal relationship born from the issuance of the bill of exchange presupposes its acceptance, the drawee having an order from the drawer to make the payment but becomes obliged to the bill of exchange only when he accepts the bill of exchange. By acceptance, the drawee becomes the main debtor, he being obliged to bill, in solidarity with the shooter, the guarantors, the guarantors. The acceptance is made by the mention on the bill of exchange "accepted", but only the signature of the bill is sufficient, the bill takes the task of "paying", and the other bill debtors assume the obligation to make "to pay", effectively if the principal debtor, the debtor, does not honor his payment.

As a means of payment, the bill of exchange can be used to pay the debt that the drawer has to the beneficiary (the drawer has to collect a certain amount of money from the drawer and also has to pay a debt to a third party - the beneficiary), replacing cash flow. Thus, instead of the drawee paying the drawer and the drawee paying / paying his debt to the beneficiary, the drawer orders the drawee to pay directly to the beneficiary.

On the other hand, due to the fact that the promissory note can be transmitted by endorsement, it can serve to cover the payment obligations between the participants in the endorsement chain. Thus, the beneficiary of a treaty, who has a debt to a third party, can pay with the treaty, endorsing it in favor of his creditor, who becomes the new beneficiary of the bill (he can use it in the same way to pay his own debts).

The pay-as-you-go (described above) is not perfect, as this tool does not replace the actual money. The obligations are extinguished by treatment only temporarily, subject to the receipt of the bill of exchange at maturity by the last beneficiary.

From the point of view of the means of guarantee, the transactions with treatment are characterized by a high degree of guarantee offered by the bill of exchange mechanism, fact for which most banks consider the bill of exchange as a title of guarantee.

First of all, the drawee is obliged to accept the bill of exchange upon presentation (otherwise the protest of non-acceptance is resorted to), and from the moment of acceptance the drawee becomes the main debtor of the payment obligation.

Second, the bill of exchange can be guaranteed, with a third party (guarantor) assuming the obligation to pay in place of the debtor, if he does not make the payment. If the payment obligations mentioned in the bill of exchange cannot be paid in any of the ways presented above, the non-payment protest may be used.

Due to this high security, the treaty can be used as a guarantee tool in unsecured payment techniques (with a high degree of risk - for example documentary collection) or as a means of guaranteeing the fulfillment of contractual obligations.

The "means" of credit found in the bill of exchange is represented by the credit relationship that occurs due to the bill of exchange mechanism, due to a longer or shorter time that occurs between the moment of the debtor's obligation to pay and the time which can be said to be a credit granted to the debtor in which to make the payment before the maturity of the bill of exchange. Therefore, the value of the bill must also reflect the cost of the loan, taking into account the value of the claim, the market interest and the number of days until maturity.

We must not forget to mention that a variant of the bill of exchange can be considered the promissory note (promissory note) which is a document by which a person (the issuer) undertakes to pay another person (the beneficiary), or at his order, a sum of money at maturity. So, compared to the bill of exchange mechanism, in the case of promissory note there are only two parties represented by the issuer who cumulates the functions of the drawer and the drawee being the debtor of the payment obligation, and the beneficiary who is the creditor of the payment.

Discounting and discounting

Due to the fact that it allows discounting operations, the bill of exchange becomes a banking instrument. Discounting is the operation by which the holder of the bill of exchange obtains from a commercial bank, before maturity, the amount entered in the title (nominal value), less the interest related to the amount from that moment until maturity, plus a bank commission (called discount bank) called discount (the most commonly used formula for calculating the discount value is: S = V - (V * Ts * n) / (360 * 100) where S is the discount, V is the value of the bill at maturity, including interest, if if applicable, Ts is the discount rate, expressed as a percentage per year and n is the number of days remaining until maturity).

Rediscounting is the operation carried out when commercial banks exchange their cash bills at the central bank, where the official discount rate is levied, thus influencing the general level of the interest rate (after 1971, the discounting began to play an important role in interest rate adjustment).

Exchange maturity

Regarding the due date (payment term) it can be indicated in several ways in the bill of exchange (which also induces the specificity of the bill of exchange), as follows:

- the "sight" maturity occurs if the holder of the bill of exchange (the beneficiary) can present it for collection at any time from the date of issue, and the bill must be paid on the same day. It should be noted that this type of maturity has a limitation period of one calendar year (for Romania - each country has regulated this limitation period), which is why it is considered that the treaty is a means of short-term lending (especially as the most commonly used form is the 90-day treatment);
- the maturity "on time" (at a certain term from the presentation), respectively at a certain number of days from the date of acceptance by the drawee (or of the protest of non-acceptance);
- the "validity" maturity (at a certain time from the date of issue) when the expressly mentioned validity period of the bill of exchange is important, validity which does not eliminate the acceptance by the drawee or other billing procedures but which compels to take place in a predetermined time ;
- "fixed" maturity (at a fixed date) when the text / conditions of the bill of exchange include the day, month and year in which the payment is made.

The payment of the bill of exchange is made when it is submitted to the payment either to the drawee or to the bank where she was domiciled (because the bill of exchange circulates from one holder to another, under various conditions, its "chain" of circulation or litigation).

The bill of exchange due on a fixed day or at a term from the date of issue must be presented for payment on the due date or on one of the two working days following the due date and the due bill may be payable on presentation, but not later than prescription (legally or expressly specified).

The drawer may stipulate that a bill of exchange payable at sight must not be presented for payment before a certain date, the submission deadline running from that date. Following the payment transaction, the paying party has the right to demand from the beneficiary the treaty with the mention "paid", signed by him. Also, if the drawee wants to make a partial payment, the beneficiary cannot refuse the payment, being obliged to mention on the mileage the amount received and to give the receipt of the drawee on making this partial payment.

The refusal to pay the bill, as well as the exigibility of the bill before the due date, transforms the guarantee obligation of the drawer, the guarantor and the guarantor into a payment obligation. The holder of the bill of exchange can act, in case of non-compliance with the payment obligation, through two types of bill of exchange operations: extrajudicial and judicial.

The most common bill of exchange action is regression (which occurs only in case of refusal to accept or pay the treaty and only after the completion of the protest formalities). In this case, the beneficiary acts against the shooter and the other signatories of the respective document (endorsers and guarantors) at maturity, in the conditions in which the drawer refuses payment (total or partial acceptance) or if the drawer or the drawer fails. If the place of payment is not indicated in the bill of exchange, it will be presented for payment at the address of the drawer, at the address of the acceptor by intervention or at the address of the "indicated as needed".

The prescription of bill of exchange effects has several peculiarities. Thus, it is normally prescribed in a calendar year (or according to the legal provisions in force) - a term similar to the beneficiary's action against the other signatories when the calendar year is counted from the date of the protest addressed in due time or due date, in the case of a bill of exchange with the "no protest" clause.

In the case of legal action, resulting from the bill of exchange, against the drawee who accepted the bill of exchange, the prescription comes three years after the due date. The action of one endorser against another or against the shooter shall be time-barred within six months from the date on which they paid or were brought to justice. It should be noted that the acts of interruption of the expiration of the limitation period have effect only with respect to the one who performed them.

Bills of exchange transactions

The technique of payments by bills of exchange also knows a series of operations such as:

- endorsement - is a guarantee-like operation, whereby the shooter, if unsure of the solidarity of the shooter, can call on a third party to "guarantee" by "downstream" (this operation is a commercial guarantee and does not produce bill of exchange effects, according to the Code Commercial, Article 42). Thus, one of the formulas "for endorsement", "for guarantee" or "endorsed" on which the guarantor will sign and specify the date of the signature will be written on the front or back of the bill of exchange (it is very rare to use the simple signature of the guarantor and, therefore , not indicated). Avalist is usually a bank that undertakes to make the payment if the drawer will not pay the respective amount at maturity, in this operation the guarantor being guaranteed and the guaranteed debtor being guaranteed. The bill of exchange may bear several endorsements given for the same endorsement or for different endorsements, as the endorsement may be granted only for a part of the amount entered on the bill of exchange. By paying the bill, the guarantor acquires the rights arising from it against the guarantor, as well as against those who are obliged to the guarantor, under the bill of exchange (at the same time he can demand the delivery of the bill of exchange with protest and a paid return account). The bill of exchange may bear several endorsements given for the same endorsement or for different endorsements, as the endorsement may be granted only for a part of the amount entered on the bill of exchange. By paying the bill, the guarantor acquires the rights arising from it against the guarantor, as well as against those who are obliged to the guarantor, under the bill of exchange (at the same time he can demand the delivery of the bill of exchange with protest and a paid return account). The bill of exchange may bear several endorsements given for the same endorsement or for different endorsements, as the endorsement may be granted only for a part of the amount entered on the bill of exchange. By paying the bill, the guarantor acquires the rights arising from it against the guarantor, as well as against those who are obliged to the guarantor, under the bill of exchange (at the same time he can demand the delivery of the bill of exchange with protest and a paid return account).

- endorsement - is an operation of transmission of the bill of exchange which is made by a written order on the bill of exchange by its beneficiary, to the drawee, who is to pay the amount shown in the title, at the order of the person he indicates, at the place and on the date mentioned in the bill of exchange. The guarantor takes place when the beneficiary (guarantor) is in turn indebted to another person (guarantor) with at least the same amount (or depending on the agreements between the parties). The bill of exchange is endorsed by the word "turned to" on the back of the bill of exchange, accompanied by the signature of the guarantor and the date of its granting, hence the alternative name of "endorsement" (the one who transmits the bill of exchange is called the guarantor and the one who becomes the new owner is called the guarantor). The guarantor transmits all the rights arising from the bill of exchange, without the need to notify the bill of exchange debtor, including the real guarantees that have been set up to ensure the payment of the bill of exchange. If a guarantor mentions several guarantors, cumulatively, the exercise of the bill of exchange rights, including the right to transmit the title through a new guarantor, belongs to all, jointly, by consensus. If several guarantors are alternately indicated, the guarantor holding the bill of exchange may exercise these rights alone. With each new turn, the value of the bill of exchange obligation increases because the execution of this obligation is guaranteed by several joint and several co-debtors. The guarantor may evade the warranty obligation by mentioning the "no obligation" or "no obligation" formula, but the exemption applies strictly to the guarantor who used this formula, not to the other guarantors. The first guarantor is the shooter, and each of the following guarantors must be listed as guarantors in the previous round. If a blank endorsement appears in the row of endorsements, the signatory of the next endorsement is considered a endorser of the endorsement endorsement. If an incapacitated person is interposed in the row of guarantors, the string is interrupted because this endorsement and all that follows are void, leaving only the endorsements that allowed the incompetent's endorsement to produce legal effects. The legitimacy of the quality of holder of the bill of exchange is made by mentioning the name as guarantor in the last endorsement inscribed on the back of the bill of exchange. The drawing does not have the quality to verify the reality of the endorsements, but only the identity of the owner. It is worth noting that there are also special endorsements that can be mentioned: The legitimacy of the quality of holder of the bill of exchange is made by mentioning the name as guarantor in the last endorsement inscribed on the back of the bill of exchange. The drawing does not have the quality to verify the reality of the endorsements, but only the identity of the owner. It is worth noting that there are also special endorsements that can be mentioned: The legitimacy of the quality of holder of the bill of exchange is made by mentioning the name as guarantor in the last endorsement inscribed on the back of the bill of exchange. The drawing does not have the quality to verify the reality of the endorsements, but only the identity of the owner. It is worth noting that there are also special endorsements that can be mentioned:

1.-the guarantee for collection ("for cover", "for power of attorney") which has the character of a warrant, the guarantor being able to guarantee only with a power of attorney,
2.-the guarantee guarantee which represents the act of affecting the bill of exchange as a guarantee to the execution of another commercial obligation,
3.-the guarantee without guarantee (mentioned above),
4.-the "not to order" guarantee which has the effect of prohibiting a new guarantee,
5.-the return guarantee which is carried out by the bill of exchange by the beneficiary for the benefit of the shooter or the shooter,
6.-the guarantee after the protest that produces only the effects of an assignment that guarantees only the existence of the claim, not the solvency of the bill debtors, which can oppose to the assignee all the personal exceptions that the assignor could oppose.

- lump sum - is the operation of selling a bill of exchange regardless of maturity, to specialized institutions which, unlike commercial banks, at maturity take over the risks of non-payment by the debtor.
The flat rate is higher than the discount rate, and the operation also involves the transmission of documents to ensure the smooth collection of the bill of exchange (authorizations, etc.).

Payment incidents

In case of violation of the legal provisions regarding the bill of exchange, the payment incident and / or the banking interdiction will invariably be reached.

The payment incident is the inability of a drawer (beneficiary of a bill of exchange) to operate and / or collect one or more bills of exchange. In general, the incident will occur with the deposit for collection of the respective bills, at which point the bank of the drawer, the NBR and the bank of the drawee (issuer) will "enter" in a typical procedure (expressly specified by legislative regulations) initiated by the refusal to pay / prohibition of payment for various reasons.

Payment incidents are generally represented by:

- check issued without the authorization of the drawing;
- check refused due to total or partial lack of cash, in case of presentation for payment after the deadline for presentation;
- check refused due to total lack of cash, in case of presentation for payment before the deadline for presentation;
- check refused due to partial non-availability, in case of presentation for payment before the expiration of the presentation term;
- the drawer is unable to issue checks;
- the check presents different conditions regarding the payment, property dispute;
- check issued with a false date or which lacks a mandatory indication;
- circular check / traveler's check issued to the bearer;
- the check belongs to a circulation of instruments not approved by the NBR;
- check issued by a banknote drawer;
- the check belongs to a set of instruments that has been withdrawn from circulation;
- bankruptcy of the shooter, check declared lost, stolen, destroyed;
- lack of mandate of the signatory of the defect to complete the entries on the check (with reference to the modification of some elements on the check, incorrect registration or lack of an account number, inconsistency of the signatures).

The banking ban is "the regime imposed by the bank on an account holder who prohibits the issuance of checks for a period of one year, according to mutual commitments applicable to payment by check, as a result of major payment incidents, namely:

- issuing a check without drawing authorization;
- the refusal of the check following the finding by the drawn bank of the partial or total lack of cash in the drawer's account, if he otherwise disposes, in whole or in part, of the cash he had, before the deadline set for presentation;
- the issuance of a check with a false date or which lacks one of the obligatory mentions;
- issuing a circular check or a "bearer" traveler's check;
- issuing a check by a bank interdicted drawer ".

We must not forget that the interbank procedures "initiated" by the payment incident often have much more serious repercussions than the banking interdiction because, on the way of resolving the born dispute, the territorial obligation of the intervention of the Territorial Court intervenes. It will agree on the legality of any payment incident, upon mandatory notification from the NBR, and, if necessary, notify the Prosecutor's Office for the "settlement" of criminal incidents.

Legislative framework

With regard to foreign exchange, the legislative framework is, but is not limited to:
- Law on bills of exchange and promissory notes (Law no. 58 / 01.05.1934);
- NBR norm regarding the bill of exchange and promissory note (NBR norm no. 5 / 05.06.2008);
- Romanian Civil Code (Law no. 287 / 17.07.2009);
- Code of Civil Procedure (Law no. 134 / 01.07.2012);
- Romanian Commercial Code (Romanian Commercial Code of 10.05.1887).


Dorin, Merticaru