Research On Some Legal Issues Of International Payment Mechanism

With the further development of the electronic finance, the internationalpayment mechanism has changed a lot, which used to be based on negotiableinstruments in paper form is substituted by the more effective one which isbased on electronic credit transfer, and the later has played the main role. Thischange has resulted with that the traditional rules governing the negotiableitems in paper form are not properly suitable for the new issues. So in thispaper we just discuss the main legal issues. The paper discusses the rules inthe developed countries just because the law in developed countries onpayment system is highly refined, by this it maybe will give us illustration.There are mainly four parts in this paper, as follows: In the first part, the main changes in the international paymentmechanism are generally introduced, and then the paper tells us a very famouscase, from it we can see the different conclusions of the same case, so the caseillustrated that the traditional rules is not properly suitable now. Then it alsotells us the legislations on this issue in the world. As the further developmentof electronic finance, the more effective electronic payment orders have takenthe place of negotiable instruments in paper form and the credit transfers,instead of the debit transfers have also played the main role. All this changeshave brought out the arguments whether the traditional rules are suitable forthe new issues, which focus on the payment final time, the legal relationshipsbetween different parties, and the liability for incorrect payment. America setout UCC 4A to govern these issues. The United Nations Commission onInternational Trade Law (UNCITRAL) and the International Chamber ofCommerce has recommended the relative regulations, but they are not favorednow. In the second part, we just discuss the general procedure of theinternational payment mechanism, and pay more attention on the payment - -36order and the time the payment is final. There are different policies on theseissues. In practice payment orders must be certain, unconditional and verysimple. Banks cannot accept conditional orders in the absence of a specialarrangement. During the general procedure of the international funds transfer,both the originator's bank and the beneficiary's bank have account in the sameintermediary bank makes payment possible. The paper also compares thepolicies about the sending and the acceptance of the payment order to make itclear that when the payment order cannot be revoked. There are so muchdifference about the sending and acceptance in the civil law and common law,especially about the revocation and withdraw of acceptance. In the commonlaw jurisdiction, there is no difference between revocation and withdraw. Butthe civil law identifies them clearly. In the international credit transferprocedure, there are also different views on when the payment order cannot berevoked. The common law and the civil law also have different ideas about themethods of acceptance and when the performance can be the method ofacceptance. In the common law jurisdiction, the methods are separated asmethod of acceptance prescribed and method of acceptance not prescribed. Soduring the funds transfer procedure, we should take different rules intoaccount. In the third part, we just analyze the legal relationships between theparties of the international payment mechanism, which is based on the credittransfer. The credit transfer in fact is the procedure that the originator makesthe payment to the beneficiary by means of the intermediary banks. So duringthis procedure, every bank is an agent, except the originator and thebeneficiary. There are one bank on the behalf of the originator, someintermediarybanks and one bank on behalf of the beneficiary. The character ofthe credit transfer makes the relationship of agency between different partiesmeaningful, especially the legal relationshi...