Methods for ensuring the reliability of international settlements with bills of exchange

The use of bills in international settlements provides certain rights and imposes strict obligations on its participants. International commercial and banking practice has developed a number of ways to increase the reliability of the bill of exchange as a settlement and payment tool, enshrining them with the norms of both international and national legislation. Among the tools that ensure the reliability of the bills used in international calculations, special importance is attached to acceptance, aval and endorsement.

Acceptance is the written consent of the payer to pay for the transfer bills. Through acceptance, the payer (trassat) assumes the obligation to pay the bill on time. Until the moment of acceptance, the tratta bill holder and the payer are not connected by a bill of exchange. They are united only by the relationship arising from the transaction underlying the issuance of the bill.

Any bill of exchange can be presented to the payer for acceptance, so the presentation of a waste to acceptance can in principle be considered as the right of the bill holder, and not its duty. If the bill holder prohibits acceptance, then he is responsible for the payment.

The presentation of the bill to acceptance can be carried out by any person who has a bill. In international calculations, the presentation of a bill of exchange for acceptance to a payer located in another country is usually made through banks that carry out their collection.

The acceptance is made on the bill itself and is expressed by the words “acceptable” “agree”, “I undertake to pay” or other equivalent formulas. In order for the acceptance to be valid, it must be signed by the payer.

In accordance with the requirements of the law, acceptance must be simple and unrelated. However, the law allows the possibility of limiting unconditional acceptance to part of the bill amount – partial acceptance. The acceptance is irrevocable.

T.O. by acceptance, the track becomes an acceptor – the main billing debtor, assuming all obligations to pay the bill amount.

Both simple and translated bills, as security, have increased turnover. Therefore, it is widely used as a settlement and payment tool.

Bills are transmitted by means of endorsement – a transfer inscription made on the back of the bill. A person who makes an endorsement is called an endorser, and the receiving bill on endorsement is an endorser (or).

Thus, bills can be transferred to the property or transferred by a remitent (first holder) to another person, to a new creditor. When making an endorsement, the endorser assumes an abstract monetary obligation such as the bill holder when issuing the bill. Therefore, the endorser receives an independent right to claim the bill, i.e. the commission of an endorsement on the back of the bill is equal in its consequences to the issuance of a new bill.

As a result of the endorsement, the endorser, like the bill holder, assumes the responsibility of any subsequent bill holder.

The endorser, like the bill holder, is responsible not only for the validity of the transferred claim, but also for the payment, i.e. for its actual feasibility. Exemption from this obligation is possible only by including a special reservation in the text of the endorsement.

The endorsement involves the complete and unconditional transfer of rights by bill.

The endorsement may be in the form of:

form; warrant; restrictive; non-negotiable indosso.

In a blanched endorsement, the endorser puts his signature without specifying the person to whom the bill is transferred (behind the bearer); with the warrant – a specific person is indicated in the transfer inscription – the endorser, by order of which the bill is payable; with restrictive – the endorsement prohibits the circulation of the bill (usually when the bill is passed for collection or as collateral); with non-negotiable – the endorsement allows you to transmit the bill, not accepting responsibility for payment to subsequent holders of the bill (the “Without a turn on me” clause is provided, which removes the obligation to pay from its writer).

Ensuring the reliability of the bill through endorsement is manifested in the functions of the latter:

1. Gear (transferable) – i.e. by endorsement, all rights arising from the bill are transferred to a new creditor. In addition, the new bill holder has the right to transfer bill rights to another person;

2. The guarantee function – here, through the transfer inscription, the endorser not only assigns his right to receive a bill amount to a new creditor, but he himself becomes before the endorser in the position of the billing debtor, who is responsible for the acceptance, and for billing. The endorser guarantees the new holder that the payer will properly accept and pay for the bill;

3. Legitimacy (from the word legitimation – certification of the legality of any right) – the legality of the rights of a bill creditor is based on the sequence of a number of endorsements. A number of endorsements, in order to be considered consistent and continuous, must begin with the signature of the issuer (first holder). Subsequent endorsements must be signed in the name of the person who was indicated in the previous endorsement.

Payment by bill can also be guaranteed in full or in part of the amount by a bill of guarantee (aval). The role of the bill guarantor (avalist) can be played not only by a third party, but also by one who has already put his signature on the wrong side (indossant, bill holder and even acceptor).

According to the Geneva Bills Act on Bills and Promissory Notes, aval is done on a bill or on an additional sheet (allonge). Aval is expressed by the words “count for an aval”, “as a surety”, “as a guarantor” or another equivalent formula. It must be signed by the avalist. The law requires that the aval be indicated for whom it is given. If there is no such indication, then the aval is considered data for the bill holder.

It is not allowed to roll over a bill for a person who is not responsible for the bill, for example, for an endorser who has affixed a non-negotiable endorsement, or for a payer who has not accepted the bill.

The avalist is in solidarity with all other persons obliged by bill and is not exempted from liability when the main debtor ceases to be liable by bill.

Avalist who paid for the bill of exchange acquires the rights arising from the bill, first of all, in relation to who he gave the guarantee for, as well as persons who, by virtue of the bill, are obliged to the latter. Thus, the avalist for the endorser receives the right to demand payment against himself and against previous endorsers; avalist for the acceptor has the right to claim only against the latter.