An analysis of the central bank's regulatory role in commercial document transactions in the light of the new cheque law

Document Type : Original Article

Authors

1 PhD Student in Private Law, Department of Law, UAE Branch, Islamic Azad University, Dubai, UAE.

2 Visiting Assistant Professor, Department of Private Law, UAE Branch, Islamic Azad University, Dubai, UAE

3 Assistant Professor, Department of Private Law, West Tehran Branch, Islamic Azad University, Tehran, Iran

Abstract

One of the most important commercial documents under commercial law is the cheque. Due to the importance of this payment document in commercial transactions, the legislator has assigned a special law to it and this law was amended in 2018 and based on this, new obligations have been placed on the Central Bank. Under the new amendment law, the central bank is required to fulfill its obligations to ensure transparency and oversight of financial and credit institutions and banks. Given the obligations of the central bank, which are considered in the law, it can be said that the central bank, as a regulatory body, has an important role in fulfilling legal obligations. The central bank's involvement in cheque-related operations can also be considered as a public benefit provider. Therefore, in this study, we seek to examine the innovations of the new cheque law regarding the obligations of the central bank. The results of this study show that the intervention of the central bank as a regulatory body can be justified. The research method in this research is descriptive-analytical and library method has been used in collecting resources.

Highlights

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Articles:

Emami, Mohammad, Dehghan, Fereshteh, Hierarchical Internal Supervision of Administrative Bodies in the Iranian Legal System, Journal of Legal Studies, Volume 5, Number 1, 2013.

Emamian, Seyed Mohammad Sadegh et al., National Regulatory System (Concept of Regulatory and its Relation to the Governing System), Report of the Research Center of the Islamic Consultative Assembly, Office of Public Sector Economic Studies, 2018, Serial Number: 15940.

Ahmadi, Fatemeh, Formalism of Commercial Documents and Its Effects on Iranian Commercial Law, Journal of Legal Studies, No. 8, 2017.

Bustani, Reza, Salavi Tabar, Nooshin, A Study of the Independence of the Central Bank of Iran from a Financial Dimension, Trend Quarterly, Volume 24, Number 78, 2017.

Tohidi, Mehrdad et al., Analysis of the Legal Dimensions of Central Bank Supervision of the Iranian Banking System, Quarterly Journal of Private Law Research, No. 45, 2016.

Khandozi, Ehsan, Requirements of the Regulatory Government in Iran's Economy, Quarterly Journal of Parliament and Strategy, No. 64, 2010.

Zarei, Mohammad Hossein, Matani, Mohammad Ali, Banking Regulatory Law and Its Damages in the Iranian Banking System, Legal Research Quarterly, 2019.

Sardoui Nasab, Muhammad; Taheri, Ahad, Electronic Cheque, Journal of Private Law, No. 22, 2014

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Atrian, Faramarz, The Principle of Legal Security and Government Intervention in the Economy, Quarterly Journal of Public Law Studies, Volume 47, Number 2, 2017.

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Fotouhi Rad, Ali, The rights of Cheque holders and innovations in the law amending the issuance of checks, defense lawyer, Internal Quarterly of the Bar Association, No. 182019..

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Thesis:

Shams, Principles and Models of Self-Regulation with Emphasis on the Iranian Legal System, PhD Thesis under the guidance of Dr. Mohammad Hossein Zarei, Faculty of Law, Shahid Beheshti University, 2014.

Mansoori, Mohammad, Normative and Organizational Challenges of Legal Supervision of the Banking System in the Islamic Republic of Iran, Master Thesis in Public Law, Islamic Azad University of Marvdasht.2017.

English:

Baldwin, Robert and Martin Cave and Martin Lodge, Understanding Regulation: Theory, Strategy, and Practice, OUP Oxford, UK, 2012.

Keywords

References

Cheque  as a means of cash payment (although in many cases as a means of promising payments) apart from having all the features and principles governing commercial documents to guarantee criminal, registration and legal enforcement for signatories and consequently special legal protections The holder is widely popular with individuals, so it is used in many transactions, whether commercial or non-commercial, and therefore it is logical that more than any other issue has been considered by the legislature, and of course, many trials and errors. Is also located.
In the law amending the issuance of Cheque approved in 2018, several changes have been made in the field of commercial documents and Cheque. One of the parties to the check as an important commercial document is the bank. The main question is what are the innovations of the new Czech amendment law in the field of banks' obligations? In order to review and answer the question, in this article, the innovations of the new law regarding the obligations of banks are explained and analyzed.
The country's monetary and banking law provides for other supervisory duties for the central bank. According to Article 20 of the law, the Central Bank of Iran can monitor the proper functioning of the country's monetary and credit system by using the following tools in monetary and banking affairs. According to the Monetary and Banking Law of the country, the Central Bank of Iran, as the supplier of the monetary and credit system of the country, is obliged to supervise banks and credit institutions in accordance with the provisions of this law. Although the central bank has made great strides in overseeing the issuance of documents on behalf of the bearer, the concurrence of the legislative task with the supervisory role has created challenges for the institution.
The public interest theory has been considered in the application of regulatory regulations. Accordingly, the shortcomings that hinder the efficient functioning of the market and the need for the government to play a role in improving the social welfare situation are: monopolies that violate competition; Asymmetry of information in the banking field, which causes two problems of moral hazard and inappropriate choice; Loss of property rights and contracts leads to increased contract execution costs; Occurrence of side effects that cause a lower level of goods with positive social consequences and a higher level of goods with negative social consequences. Emphasizing the inevitability of market failures and the ability of governments to eliminate these failures , The theory of public interest was formed in the field of regulatory regulations, and according to this theory, the application of regulation in the banking sector is very important because by regulating banks, people will be more confident in wanting to deposit in banks.
Accordingly, given that securing the public interest is one of the duties of regulatory bodies, including the central bank, the obligations imposed on the central bank, in accordance with what is stated in the amendment law, are in line with securing the public interest.
Implement the provisions of this law, including the need for identity and validation of persons, issuance, transfer and receipt of Cheque , which is in line with the protection of the check holder on the one hand and the realization of its function as a means of payment on the other hand and also prevent Money laundering and the fight against it, speed and ease in obtaining the amount of the check, especially by taking ways that force the issuer to pay the amount of the check and thus reduce the criminal population resulting from the issuance of unpaid Cheque , It requires the use of facilities that will be possible only after the implementation of its implementation. The realization of each of the mentioned cases has provided the necessity of anticipating the systems of electronic banking identification system, national accreditation, integrated issuance of Cheque (hunter), chakavak, criminal record system and national justice network to implement the provisions of this law, which is necessary. Examined.
According to the new amendments, the Central Bank is obliged to integrate information, non-payment certificates and final court rulings on Cheque in its integrated system, to enable online access of banks and credit institutions to check issuance and payment records, as well as to inquire about non-payment certificates for clients. Judicial and registration through the National Justice Network. The Judiciary is also obliged to provide the Central Bank with online access to bankruptcy rulings, fines for payment of convicts, as well as final rulings on returned Cheque and lawsuits filed under Article 14 of the Law through the Financial Punishment Registration System. Intended) provide.
Note 4 Article 5 repeatedly stipulates that the prescribed restrictions apply in addition to the account holder to his / her representative who issued the check, until he / she proves to the judicial authority that the non-payment was documented by the account holder or his / her next representative. This is while, first of all, during the period of the trial that is carried out in order to prove the said matter, the financial affairs of this representative are disrupted and, in particular, all his bank accounts are frozen. Note that the ruling mainly includes managers of commercial companies and even managers with signatures in government agencies, who are always dealing professionally with the issue of issuing Cheque, and the above implementation guarantee, that is, the full application of restrictions on them, is definitely an undesirable sequence in the administrative system. Will create a legal. It is therefore appropriate for the legislature to restrict the application of restrictions to the issuing agent.
Pursuant to Note 5 of Article 5 of the Law on Issuance of Cheque, the bank or credit institution shall, as the case may be, be liable for compensation for non-performance of the duties provided for in this Article and its notes to third parties. In order to file a claim for damages, it is necessary to establish the damage and fault and the causal relationship. This note merely expresses the fault and therefore other organs of the claim should be added to it; For example, a person who has an unpaid check from the bank may not have repeatedly blocked the issuer's accounts in accordance with Article 5 (b), and the issuer may subsequently transfer his balance to others and now have the financial means to There is no claim for him, to claim damages. In this case, the elements of fault and the entry of damages and the relationship of existing causation and the issuance of a verdict on the conviction of the offending bank or institution to pay damages are possible. However, the legislature has not specified what is meant by damages to third parties? There were similar problems in the supplementary note to Article 2 of the Check Issuance Law, which forced the legislature to approve Article 1 of the Interpretation Unit in this regard. This legislative error has been repeated this time as well.
The Journal of Modern Research on Administrative Law
Volume 5, Issue 15 - Serial Number 15
Fifth year, 15th issue, ّSummer 2023
June 2023
Pages 143-160

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History

  • Receive Date: 15 March 2022
  • Revise Date: 06 May 2022
  • Accept Date: 06 June 2022

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