The Civil Code of the Russian Federation(with the Additions and Amendments of February 20, August 12, 1996,
October 24, 1997, July 8, December 17, 1999, April 16, May 15,
November 26, 2001, March 21, November 14, 26, 2002,
January 10, March 26, November 11, December 23, 2003)
Chapter 46. Payments
_ 1. General Provisions on Payments
Article 861. Cash and Cashless Payments
1. Payments with the participation of private persons, not connected with their business, may be effected in cash (Article 140) without the limitation of the sum of money or non-cash.
2. Settlements between legal entities, and also payments with the participation of individuals, associated with their business, shall be effected in non-cash. Settlements between these legal entities may be effected in cash, unless otherwise stipulated by the law.
3. Clearing settlements shall be made through banks and other credit organizations (hereinafter referred to as the banks) which have opened relevant accounts, unless the contrary follows from the law and is conditioned by the usable form of payments.
Article 862. The Forms of Cashless Payments
1. Cashless payments may assume the following forms: payments by written order, by letters of credit, by cheques, for collection, and also payments in other forms prescribed by the law, the bank rules established in conformity with it and by the business turnover customs, used in banking practice.
2. The parties to the contract shall have the right to choose and fix in this contract any form of payments, referred to in Item 1 of this Article.
_ 2. Payments by Written Order
Article 863. General Provisions on Payments by Written Order
1. In case of payments by written order the bank shall undertake to transfer a definite sum of money on the order of the payer from the monetary means kept in his account to the account of the person indicated by the payer in this or that bank within the period of time, prescribed by the law or fixed in accordance with it, unless the bank account agreement provides for a shorter period or the business turnover customs used in banking practice define it.
2. The rules of this paragraph shall be applied to the relations, connected with the transfer of cash via the bank by the person who has not his account in this bank, unless otherwise stipulated by the law and the bank rules introduced in conformity with it or unless the contrary follows from the substance of these relations.
3. The procedure for making payments by written order shall be regulated by the law, and also by the bank rules introduced in conformity with it and the business turnover customs used in banking practice.
Article 864. The Conditions for the Execution of Payment Order by the Bank
1. The content of the payment order and the settlement documents submitted together with it and their form shall comply with the requirements of the law and the bank rules, established in keeping with it.
2. If a payment order fails to comply with the requirements of Item 1 of this Article, the bank may clarify the content of he order. Such inquiry shall me bade to the payer without delay, upon the receipt of the order. If no answer has been received within the period, prescribed by the law or the bank rules introduced in keeping with it, and in their absence - within the reasonable period the bank may leave the order without execution and return it to the payer, unless otherwise stipulated by the law, the bank rules introduced in accordance with it or by the agreement between the bank and the payer.
3. The payer's order shall be executed by the bank in the presence of cash in the payer's account, unless otherwise stipulated by the agreement between payer and the bank. Orders shall be executed by the bank with the observance of sequence of writing off cash from the account (Article 855).
Article 865. The Execution of the Payer's Order
1. The bank which has accepted the payer's payment order shall be obliged to transfer the relevant sum of money to the bank of the recipient of money for its charge to the account of the person, indicated in the order, within the time, fixed by Item 1 of Article 863 of this Code.
2. The bank shall have the right to draw other banks in the operations of transmitting cash to the account indicated by the client's order.
3. The bank shall be obliged to immediately inform the payer at his request about the execution of the order. Procedure for drawing up a notification about the execution of the order and requirements for its content shall be envisaged by the law, the bank rules introduced in accordance with it or by the agreement of the parties.
Article 866. Liability for Non-fulfilment or Improper Fulfilment of the Client's Order
1. In case of non-fulfilment or improper fulfilment of the client's order the bank shall bear liability on the grounds and in the amounts, prescribed by Chapter 25 of this Code.
2. In cases of non-fulfilment or improper fulfilment of the client's order in connection with the breach of the rules for settlement operations by the bank which has been drawn in the execution of the payer's order, the liability, envisaged by Item 1 of this Article, may be vested by a court of law on this bank.
3. If the breach of the rules for settlement operations by the bank has involved the unlawful withholding of cash, the bank shall be obliged to pay interest in the procedure and in the amount, prescribed by Article 395 of this Code.
_ 3. Payments by Letters of Credit
Article 867. General Provisions on Payments by a Letter of Credit
1. In payments by a letter of credit the bank acting on behalf of the payer in the opening of the letter of credit and in accordance with his instruction (the bank of circulation) shall undertake to make payments to the recipient of cash to retire, accept or discount a bill of exchange, or to instruct another bank (executing bank) to effect payments to the recipient of cash or to retire, accept or discount a bill of exchange. The rules for the executing bank shall be applicable to the bank of circulation that makes payments to the recipient of cash or retires, accepts or discounts the bill of exchange.
2. At the time of opening a covered (deposited) letter of credit the bank of circulation shall be obliged to transfer the amount of the letter of credit (payment) at the expense of the payer or to place the credit given to him at the disposal of the executing bank for the entire period of validity of the obligation of the bank of circulation. In case of opening an uncovered (guaranteed) letter of credit the executing bank shall be given the right to charge off the entire sum of the letter of credit from the account kept by the bank of circulation.
3. Procedure for making payments by a letter of credit shall be regulated by the law, and also by the bank rules introduced in accordance with it, and by the business turnover customs applicable in banking practice.
Article 868. The Revocable Letter of Credit
1. A letter of credit which can be changed or cancelled by the bank of circulation without a preliminary notification of the recipient of cash shall be recognized as revocable. The revocation of a letter of credit shall not create any obligations for the bank of circulation to the recipient of cash.
2. The executing bank shall be obliged to make payments or carry on other operations with the revocable letter of credit, if by the time of their conduct it had not received a notice about the change of the terms of the letter of credit of its cancellation.
3. A letter of credit shall be revocable, unless otherwise stipulated expressly in its text.
Article 869. The Irrevocable Letter of Credit
1. A letter of credit which cannot be cancelled without the consent of the recipient of cash shall be recognized as irrevocable.
2. At the request of the bank of circulation the executing bank that takes part in the operation with a letter may confirm an irrevocable letter of credit (confirmed letter of credit). Such confirmation shall An irrevocable letter of credit confirmed by the executing bank may not be changed or cancelled without the consent of this bank.
Article 870. The Execution of the Letter of Credit
1. In order to execute a letter of credit, the recipient of cash shall submit to the executing bank documents confirming the fulfilment of all the terms of the letter of credit. If one of these terms is contravened, the letter of credit shall not be executed.
2. If the executing bank has made a payment or carried out a different transaction in keeping with the terms of the letter of credit, the bank of circulation shall be obliged to compensate for the expenses incurred. Said expenses, and also all other expenses of the bank of circulation, incurred in the execution of the letter of credit, shall be recompensed by the payer.
Article 871. The Refusal to Accept Documents
1. If the executing bank refuses to accept documents which do not comply with the terms of the letter of credit according to external signs, it shall be obliged to inform forthwith the recipient of cash and the bank of circulation with an indication of the reasons for the refusal.
2. If the bank of circulation, which has received the documents accepted by the executing bank, holds that they do not correspond to the terms of the letter of credit according to the external signs, it shall have the right to refuse to accept them and demand from the executing bank the sum of money paid to the recipient of cash with the contravention of the terms of the letter of credit and to refuse to recompense the paid sums of money under the uncovered letter of credit.
Article 872. The Bank's Liability for Breaking the Terms of a Letter of Credit
1. Liability for breaking the terms of a letter of credit to the payer shall be borne by the bank of circulation, while such liability to the bank of circulation shall be borne by the executing bank, except for the cases, provided for by this Article.
2. In the event of a groundless refusal by the executing bank to pay out cash under the covered or confirmed letter of credit, the liability to the recipient of cash may be entrusted to the executing bank.
3. In case of a wrong payment of cash by the executing bank under the covered or confirmed letter of credit in consequence of breaking its terms, the liability to the payer may be entrusted with the executing bank.
Article 873. The Closing of the Letter of Credit
1. The executing bank shall close letters of credit in the cases of: the expiry of the validity term of a letter of credit;
the application by the recipient of cash on the refusal to make use of a letter of credit before the expiry of its validity term, if the letter of credit provides for the possibility of such refusal;
the demand of the payer for a full or partial revocation of a letter of credit, if such revocation is possible under the terms of the letter of credit.
The executing bank shall be obliged to inform the bank of circulation about the closing of the letter of credit.
2. The non-used amount of the covered letter of credit shall be subject to return to the bank of circulation without delay simultaneously with the closing of the letter of credit. The bank of circulation shall be obliged to charge the returned sums of money to the payer's account from which cash has been deposited.
_ 4. Payments for Collection
Article 874. General Provisions on Payments for Collection
1. In payment for collection the bank (bank of circulation) shall undertake to carry out actions involved in the receipt of payment and/or acceptance of payment on the order of the client and at his expense.
2. The bank of circulation which has received the client's order shall have the right to draw another bank (executing bank) for its implementation. Procedure for making payment for collection shall be regulated by the law, the bank rules introduced in keeping with it and by the business turnover customs applicable in banking practice.
3. In case of default on the client's order or improper execution the bank of circulation shall bear liability to it on the grounds and in the amount, prescribed by Chapter 25 of this Code. If the client's order has not been executed or executed improperly due to the infringement of the rules for payment operations by the executing bank, the liability to the client may be placed on this bank.
Article 875. The Execution of a Collection Order
1. In the absence of any document or in case of the non-conformity of documents with the collection order by their external signs the executing bank shall be obliged forthwith to inform about this the person from whom it has received the collection order. In the event of non-removal of said drawbacks the bank shall have the right to return the documents without execution.
2. Documents shall be submitted to the payer in the form in which they have been received with the exception of bank notes and endorsements needed for the formalization of a collection transaction.
3. If documents are subject to payment at sign, the executing bank shall present them for payment immediately upon the receipt of a collection order. If documents are subject to payment at other time, the executing bank shall present documents for acceptance for the receipt of the payer's acceptance immediately upon the receipt of the collection order, while the claim for payment shall be made not later than the day of the onset of the payment date, indicated in the document.
4. Partial payments may be accepted in cases where this is provided for by the bank rules or in the presence of a special permit in the collection order.
5. The received (collected) amounts shall be immediately placed by the executing bank at the disposal of the bank of circulation, which is duty-bound to charge these amounts to the client's account. The executing bank shall have the right to withhold from the collected amounts the fees due to it and the compensation for expenses.
Article 876. Notice of Transactions Made
1. If payment and/or acceptance have not been received, the executing bank shall be obliged to inform at once the bank of circulation about the reasons for non-payment or for the refusal from acceptance. The bank of circulation shall be obliged to inform the client about this immediately and inquire about its directions on further actions.
2. In the event it has failed to receive directions about further actions within the time-limit fixed by the bank rules or within a reasonable period in the absence of this time-limit the executing bank shall have the right to return the documents to the bank of circulation.
_ 5. Payments by Cheques
Article 877. General Provisions on Payments by Cheques
1. A cheque shall be recognized to be the security containing the non-stipulated cheque drawer's order to the respective bank to effect the payment of the amount of money, indicated in it to the cheque holder.
2. Only the bank where the cheque drawer has money to be disposed of by drawing cheques may be indicated as a payer by cheque.
3. A cheque may not be withdrawn before the expiry of the time for its presentation.
4. The drawing of a cheque shall not cancel the obligation in the fulfilment of which it has been written.
5. Procedure and conditions for the use of cheques in payment transactions shall be regulated by this Code and in the part which is not regulated by it they shall be regulated by other laws and the bank rules established in accordance with them.
Article 878. The Essential Elements of the Cheque
1. The cheque shall contain: 1) the name "cheque", included in the text of the document;
2) the order to the payer to pay out a certain sum of money;
3) the name of the payer and reference to the account from which payment is to be made;
4) reference to the currency of the payment;
5) reference to the date and place of writing the cheque;
6) the signature of the person who has drawn the cheque (cheque drawer).
The absence of any of said essential elements in the document shall invalidate the cheque.
A cheque that does not contain the place of its writing shall be regarded as that signed at the place of the location of the cheque drawer.
Reference to interest shall be deemed to be unwritten.
2. The form of cheques and procedure for its filling in shall be determined by the law and the bank rules introduced in keeping with it.
Article 879. Cheque Payment
1. A cheque shall be paid at the expense of the cheque drawer's resources. If cash is deposited, procedure and conditions for depositing cash to cover cheques shall be established by the bank rules.
2. A cheque shall be liable to payment by the payer, provided that is presented for payment within the time-limit fixed by the law.
3. The payer by cheque shall be obliged to assure himself of the authenticity of the cheque with all means at his disposal, and also of the fact that the cheque bearer is a person authorized therefor. During the payment of the endorsed cheque the payer shall be obliged to verify whether endorsements are correct but shall not check the signatures of endorsers.
4. The losses incurred due to the payment by the payer for a forged, pilfered or lost cheque shall be covered by the payer or the cheque drawer depending through whose fault they have been caused.
5. A person who has paid the cheque shall have the right to demand it with the receipt for the sum of money.
Article 880. The Assignment of Rights by a Cheque
1. The rights by a cheque shall be assigned in the order, prescribed by Article 146 of this Code with the observance of the rules, provided for by this Article.
2. A cheque to bearer shall not be subject to transfer.
3. In an assigned cheque the endorsement in full shall have the force of receipt for the sum of money. The endorsement made by the payer shall be null and void.
A person who possesses the assigned cheque, received under the endorsement, shall be deemed to be its legitimate holder, if he bases his right on the continuous numbers of endorsements.
Article 881. Guarantee of Payment
1. Payment of a cheque may be guaranteed in full or in part by means of its surety. The guarantee of payment of a cheque (surety) may be given by any person, except for the payer.
2. The guarantee shall be put down on the face side of a cheque or on the additional sheet by means of endorsement ("regard as guarantee") and the indication of who and for whom it has been given. Unless there is no such indication, the guarantee shall be deemed to be given in place of the cheque drawer. The guarantee shall be signed by the guarantor with an indication of the place of his residence and the date of making an endorsement, and if the guarantor is represented by a legal entity, the guarantee shall signed with an indication of its place of location and the date of making an endorsement.
3. The guarantee shall be liable just as the person in place of whom he has given the guarantee. His obligation shall be valid even in the event if the obligation guarantee by him proves to be void on any ground other than the non-observance of the form.
4. The guarantor who has paid the cheque shall acquire the rights that follow from the cheque against the person in place of whom he has given the guarantee and against those persons who are obligated to the latter.
Article 882. Collection of a Cheque
1. The submission of a cheque to the bank which serves the cheque holder for collection in order to get payment shall be deemed to be the presentation for payment. Cheque payment shall be made in the order, prescribed by Article 875 of this Code.
2. Cash shall be entered to the cheque holder's account under the collected cheque after the receipt of payment from the payer, unless otherwise stipulated by the agreement between the cheque holder and the bank.
Article 883. Certification of the Refusal to Pay a Cheque
1. A refusal to pay a cheque shall be certified by one of the following methods: 1) by making a protest by the notary or by drawing up an equivalent report in the statutory manner;
2) by putting down a note by the payer on the cheque to the effect that her refuses to pay it with an indication of the date for presenting the cheque for payment;
3) by putting down a note by the collecting bank with an indication of the date to the effect that the cheque has been drawn in due time and dishonored.
2. A protest or an equivalent report shall be made before the expiry of the time for presenting the cheque. If the cheque was presented on the last day of the time-limit, a protest or an equivalent report may be made on the next working day.
Article 884. Notification About the Non-payment of a Cheque
The cheque holder shall be obliged to inform his endorser and cheque drawer about non-payment during two working days that follow the day of making the protest or the equivalent report.
During two working days that follows the day of the receipt of the notification by it every endorser shall be obliged to bring to the notice of his endorser the received notification. During the same period of time the notification shall be sent to the one who has given the guarantee for this person.
The person who has not sent a notification within the said period shall not lose his rights. He shall indemnify for the losses that can be caused by the non-notification about cheque non-payment. The amount of the indemnified losses may not exceed the cheque amount.
Article 885. The Consequences of Cheque Non-Payment
1. If the payer refuses to pay a cheque, the cheque holder shall have the right to bring an action to one, several or all the persons bound by the cheque (cheque drawer, guarantors and endorsers), who bear joint and several liability to him.
2. The cheque drawer shall have the right to demand from said persons the payment of the cheque amount, his costs involved in the cashing of the cheque, and also interest in keeping with Item 1 of Article 395 of this Code. The same right shall belong to the person bound by the cheque after it has paid the cheque.
3. The cheque holder's claim against the persons, referred to in Item 1 of this Article, may be brought during six months since the day of the expiry of the period of presenting the cheque for payment. Claim resources of bound persons to each other shall be cancelled upon the expiry of six months since the day when the relevant bound person has satisfied the claim or since the day of bringing the action against him.
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