Pursuant to article 74 (6) of the Constitution and with reference to article 7 of the Law on Presidium of the Peoples Assembly of the Federal Peoples Republic of Yugoslavia, the Presiding Board of the Presidium of the Peoples Assembly of the Federal Peoples Republic of Yugoslavia hereby proclaims the Law on Bills of Exchange passed by the Federal Council and the Peoples Council of the Peoples Assembly of the Federative Peoples Republic of Yugoslavia, which reads as follows:
LAW ON CHEQUES
Issuance and Form of Cheque
1) Designation that it is a cheque, written on the heading of the document or, if it has been issued in a foreign language, an expression corresponding to the notion of cheque;
2) instructions for unconditional payment of a certain amount of money out of the drawers account;
3) name of the party obliged to pay (drawee);
4) venue of payment
5) designation of date and place of issue of the cheque
6) signature of the party issuing the cheque (drawer).
Cheques payable in the country may only be drawn to state owned, co-operative and private banking enterprises.
Cheques payable outside of the country may, if consistent with the law in the country where payment is made, be drawn to third parties.
Document not containing any of the elements listed in article 1 or drawn in a manner other than the ones defined in article 2 of this law shall not be cheques, except for cases specified in other paragraphs of this law.
Unless specifically defined otherwise, the place next to the drawers name shall be deemed the place of payment.
Cheques not containing the place of issue shall be deemed issued in the place next to the name of the drawer.
Any determination of interest on the cheque shall be deemed as not written.
Cheques may only be drawn (article 2 herein) to parties with which the drawer has a sufficient coverage in money which s/he may dispose of through cheques, on the bases of explicit or tacit consent of such parties.
Drawers issuing cheques with no coverage shall compensate the cheque holder in full.
Cheques may be registered, with a designation by order of or to the bearer.
Cheques containing the name of the payee or a designation or to the bearer, or any other expression with the same meaning shall be deemed as cheques for the account of the bearer.
Also, cheques with no designation of the name of the payee (beneficiary) shall be deemed as cheques for the account of the bearer.
Cheques may be issued both for the account or at the order of the payee.
Cheques produced by a bearer and stating that one and the same person is both the drawer and the payee shall be deemed invalid.
The drawer undertakes responsibility for payment of cheques. Any provision under which the drawer may disclaim responsibility for payment shall be regarded as never written.
Cheques for the account of the bearer shall be transferable by simple delivery. Any other cheque, though it may not be explicitly drawn by order, shall be transferable with an endorsement.
Cheques in which the drawer has included the words not by order or any other expression with the same meaning shall be transferred in the format and by an act of general assignment (cession).
Bearer cheques may be altered to cheques bearing the name of the payee or cheques by order with a corresponding full endorsement.
Endorsements must be unconditional. Any condition included shall be deemed void.
Partial endorsements shall be deemed null and void.
Drawees endorsements shall also be deemed null and void.
Endorsements for the account of the bearer shall be deemed blank endorsements.
Anyone, including the drawee, who has put their signature at the back of a cheque issued to the bearer, yet failed to include the endorsement provision, shall bear responsibility as the drawees guarantor. Such cheque shall not, as a result of this, loose the property of a bearers cheque.
Drawees endorsements shall represent acknowledgement of payment, except when the drawee has several places of business (main office, subsidiaries) and the endorsement has been executed for the benefit of the subsidiary which is located in a place other than the one where the cheque was drawn.
Declaration of acceptance included in a cheque shall not have a legal effect attributed to cheques.
Full or partial payment of a cheque may be secured with a guarantee.
With the exception of the drawee, this type of security may be provided by any third party, including even the signatory of the cheque.
Cheques shall be payable on sight.
Documents with maturity specified otherwise shall not be deemed cheques.
Cheques payable in our country must be presented to the drawee for payment within:
1) eight days from the date of issue, if the place of issue and the place of payment in our country are one and the same; within fifteen days if they are not;
2) within twenty days from the date of issue, if the cheque has been issued in a European country;
3) within forty days from the date of issue if the date has been issued in a non-European country, i.e. maritime countries on the coasts of the Mediterranean or Black Sea or on any of the off-shore islands.
4) Within seventy days from the date of issue, if the cheque has been issued in any other non-European country.
Notwithstanding the foregoing provisions, a circular cheque may also be presented for payment within six months from the date of issue.
Cheques shall also be deemed presented for payment when presented to a clearing institution of which the drawee is a member or in which s/he may have a representative.
When cheques are drawn in one place and cashed in another, and when their respective calendars do not match, then the maturity of the cheque shall be determined by the date of issue which is the date that falls under the calendar applicable in the place of payment.
Neither the death of the drawer, nor the absence of his/her cheque honoring ability, if they occur after the cheque has been issued, shall affect the legal effect of the cheque.
The drawee must approve payment of cheque if s/he is aware of a bankruptcy procedure having been initiated against the drawers estate.
Cancellation of a cheque shall take effect:
1) when the period during which the cheque may be presented for payment has expired;
2) if the drawer sends the cheque immediately in the name or at the order of the drawer, with an instruction to satisfy the person designated in the cheque, and the drawee receives the cancellation after the order has been executed.
If there is no cancellation, it is the drawees duty to pay the cheque to the drawer even after the presentation period has expired, unless there is some kind of agreement.
Drawer who, following the expiry of the presentation period, may have positive balance on his/her account to cover the cheque, shall be liable for compensation of damage, though s/he may not have officially cancelled the cheque.
Upon payment of the cheque, the drawee may demand that the owner give the cheque inclusive of a confirmation that it has been paid out.
The owner of the cheque may refuse partial payment.
In cases of partial payment, the drawee may demand that it be marked on the cheque and a receipt of the sum paid be given to him/her.
Cheques crossed on the front with two parallel lines may be cashed by the owner only in a banking enterprise (art. 2 of this law). This lines may be drawn either by the drawer or the owner of the cheque.
Crossing may be general or specific.
Crossing is general if nothing is specified or if it has banking enterprise or some other expression with the same meaning between the two lines. Crossing is specific if between the two lines it has a name of a specific banking enterprise.
General crossing may be altered into a specific, while the specific may not be altered into a general.
A cheque with a specific crossing may be cashed by the owner only in a banking enterprise specified between the lines, which, however, may decide that another banking enterprise will execute the payment.
Erasure of crossing or of the name of a banking enterprise specified between the lines shall be considered not to have been made.
Drawee who in the case of a general crossing pays the cheque not to a bank but to some third party or who in the case of a specific crossing pays the cheque to someone other than the banking enterprise designated between the lines shall be held liable for the damage caused. The compensation for that damage shall not exceed the amount of the cheque.
The drawer, as well as each owner of a cheque, may suspend cashing of the cheque. For this reason, s/he must write across the heading of the cheque for calculation purposes only or use an expression with the same meaning.
In this case the cheque may only be cleared through an agreement on the calculation results reached with the drawee or with the person holding an account with the drawee or with a member of a clearing institution located in the place of payment. If the drawee is not a member of such institution, s/he may, when presenting the cheque, indicate a member of the institution for calculation. This calculation shall be deemed enforceable payment.
Statement for calculation purposes only shall not be revoked.
If the drawee fails to observe the result of the calculation, s/he shall be liable for not more than the amount of the cheque for the damage that s/he may have thus caused.
Cheque owners shall not demand refund from endorsers, the drawee and the guarantors if payment against timely presented cheque has been refused (art. 12 of this law).
Presentation of payment or non-payment must be supported by:
1) a public document (complaint against non-payment) or
2) a statement signed by the drawee of the cheque in which s/he refuses payment, stating the date of presentation of the cheque; the complaint must be entered in the complaint registry within the period allowed for complaints, upon which the complaint hearing body attaches an acknowledgement on the cheque or on its attachment.
3) A dated document issued by the clearing institution confirming that the cheque has been timely presented and not honored following the calculation. The complaint against non-payment must be filed prior to the expiry of the complaint period. However, in reference to cheques presented for payment of the last day of the complaint period, if they are not paid out, the complaint may be filed on the first working day following this day.
Cheques issued in the country and payable outside may be issued in two or more identical copies. The heading of each copy must include the cheques issue number; unless this is done, each copy shall be deemed a separate cheque.
Bearers cheques may not be multiplied.
Cheque owners refund requests against endorsers and drawers shall become invalid six months after the expiry of the period allowed for presentation for payment.
Endorsers refund requests against each other and against drawers shall become invalid six months from the day the endorser has bought the cheque or from the day a legal action against him has been filed with the court.
Complaint on the Grounds of Fundamental Legal Relationship
Instead of filing a refund complaint (art. 19 of this law), cheque owners may, unless otherwise agreed and having returned the cheque, satisfy their claim against the drawer or their immediate endorser arising from the fundamental nature of their legal relationship which may have been the grounds for issuance or transfer of the cheque.
The owner of the cheque may also satisfy his/her claim arising from the general legal nature of relationship when refund conditions have not been met or when the cheque validity has expired. However, in this case the amount of the damage which the sued debtor has suffered due to untimely or failed presentation of the cheque shall be deducted from the cheque owners claim.
Provisions in the Law on Bills of Exchange Applicable to Cheques
The following provisions in the law on Bills of Exchange shall be applicable to cheques, as inherent to their nature:
1) on the differences in amounts (art.6)
2) on the validity of the signature put on the bill of exchange which contains signatures mentioned in art. 7 of the Law on Bills of Exchange, as well as on the validity of the signature of the person operating without or failing to observe his/her authorizations (art. 8);
3) on endorsements (art. 12 to 17), with the exception of the provisions pertaining to acceptance and the ones from para 2. Art. 16 of the Law on Bills of Exchange.
4) On guarantee (art. 30 and 31), where the drawee guarantee shall not have the legal effect of a cheque;
5) On payment (art. 40 and art. 114 item 3);
6) On disclosure (art. 44); on the comment without expenses (art.45); on joint and several liability (art. 46);on the refund amount (art. 47 para 1 and art. 48); on submission of documents and erasure of endorsements (art. 94); with exclusion of provisions in all mentioned articles pertaining to acceptance and interest determined in the document;
7) On force majeure (art. 53) with the exception of the provision pertaining to acceptance;
8) On multiplication (art. 64), with the exception of the second sentence in paragraph 1;
9) On the correction of the bill of exchange (art. 68), with the exception of provisions pertaining to acceptance, inclusive of the addendum: the liability for the damage caused by purchase of a corrected or forged cheque shall be borne by the drawer of the corrected cheque or by the drawer of the forged cheque, if either any of these parties (drawers) or their employees entrusted with handling cheques are guilty of corrections or issuance of forged cheques. The drawee shall be liable for any other damage caused. Any agreement contrary to this provision shall be deemed void;
10) On complaints (art. 69 to 76 and 77, paragraph 2), with the exception of provisions pertaining to acceptance and to complaints filed on the grounds of regulations governing cheques (art. 71, item 1);
11) On expiry (art. 79 to 84)
12) On illegal acquisition of wealth (art. 85), with the exception of provisions pertaining to the acceptant, and then only if no complaint mentioned in art. 22 para. 2 of this law is necessary;
13) On the right to pledge and holding security (art. 86 to 89);
14) On depreciation (art. 90 to 93), with the exception of provisions pertaining to acceptants;
15) On conflict of laws (art. 94 to 100);
16) General provisions (art. 101 to 105 and art 106 para. 1 and 3), with the exception of provisions pertaining to acceptance.
Provisions on jurisdiction and procedure applicable to legal bill refund claims shall also be applicable in cases of satisfaction of refund claims decided by the court.
A fine of 25% to 10% of the cheque amount, and not less than two hundred dinars, shall be levied on person:
1) who draw undated cheques or cheques with inaccurate date of issue;
2) who accept, transfer or pay these cheques with full knowledge of shortcomings;
3) who draw cheques contrary to the provisions contained in art 2 of this law;
4) who alter certain crossings in the general or erase either crossings or the name of the designated banking enterprise (art. 17 of this law).
Persons acting in this fashion out of negligence shall be fined half of the specified penalty.
Cheque drawers with insufficient or no cover on their accounts shall be fined 10% to 25% of the uncovered cheque amount and not less than five hundred dinars, unless at the time of issue they may have had justified reasons to believe that they would have sufficient funds to cover the amount of the cheque at the time of presentation for payment.
A fine of 10% to 25% of the cheque amount shall be levied on drawers who, despite being aware of the fact that they must not justifiably cancel the cheque (art. 15 of this law), makes such a disposal of cover that prevents payment of the cheque. They shall not be fined if they can prove that they didnt do it on purpose or out of negligence.
In both cases the drawer shall fully compensate the cheque owner (art. 4 of this law).
Penalties provided in art. 25 and 26 of this law shall be issued by the court with competent jurisdiction in a non-trial procedure. The court shall act ex-officio when during the law suit initiated on an issue of cheque it learns that act described in the foregoing articles have been committed; otherwise it shall only act on the request of the cheque owner.
Procedure on these acts may not be initiated ex-offcio if six months expire from the date of presentation of the cheque for payment, while upon the request of the cheque owner a procedure may not be initiated if three months have elapsed.
The beneficiary of the fines shall be the state treasury.
In reference to acts described in art. 26 of this law, the prescribed monetary fine may be altered to compulsory labor without detention, if there is no possibility of obtaining payment.
In reference to the procedure initiated ex-officio, the jurisdiction shall be with the court sitting on the dispute. The procedure initiated by the cheque owner shall be under the jurisdiction of the local court of the drawer.
Provisions defined in art. 25 and 26 of this law are not in conflict with the Criminal Law.
Transitory and Final Provisions
Provisions in the Law on Bills of Exchange described in art. 111, 112 and 114 shall be applicable to cheques.
The Minister of Finance of the Federative Peoples Republic of Yugoslavia shall have the authority to prescribe conditions for circular cheque issuance and use.
Notwithstanding art.2 of the Law on Invalidity of legal regulations enacted prior to April 6, 1941 and during the period of occupation of the country (Off. Gazz. of FNRJ, No. 86, Oct 15, 1946), regulations contained in the Law on cheques of November 29, 1928 shall be applicable to cheques issued prior to this law coming into force.
The form and effect of cheque statements issued prior to and converted into cheques following the effectuation of this law shall also be defined using the Law on Cheques from November 29, 1928 as guidelines. This is also applicable to actions needed to protect and secure rights conferred in cheques.
This Law shall come into effect on the next day following its publication in the Official Gazette of the Federative Peoples Republic of Yugoslavia.
FOR ENACTMENT OF THE LAW ON CHANGES AND ADDITIONS TO THE LAW ON CHEQUE
Enactment is hereby declared of the Law on Changes and Additions to the Law on Cheque, passed by the Federal Assembly at the session of the Peoples Council dated 27 September 1973 and at the session of the Economic Council dated 27 September 1973.
28 September 1973
President of the
LAW ON CHANGES AND ADDITIONS TO THE LAW ON CHEQUE
In the Law on Cheque (Official Gazette of the Socialist Federative Republic of Yugoslavia No.12/65 and 50/71), the comma and the text after the words acknowledgment of payment in article 8 (6) shall be deleted.
Title of article 25 shall be changed to read: Penalty Provisions.
Article 25 shall be changed to read:
On grounds of violations, a money fine of 2 to 10% of the amount on the cheque or not less than 500 dinars shall be levied on an organization of associated labor or any other legal entity that:
1) will draw a cheque with no date or false date of issuance;
2) will accept, transfer or pay for a cheque as described in paragraph 1 (1) of this article, despite being aware of its deficiencies;
3) will draw a cheque contrary to the provision in article 2 herein;
4) will alter a specifically crossed cheque into a generally crossed one or will delete either the crossing or the name of the designated bank (article 17).
Employees with relevant responsibility in an organization of associated labor or other legal entities shall also be fined for a violation described in paragraph 1 of this article, with a money fine of 1 to 5% of the amount on the cheque or not less than 300 dinars.
Individuals shall also be fined for a violation described in paragraph 1 of this article, with a money fine of 1 to 5% of the amount on the cheque or not less than 300 dinars.
On grounds of violations, a money fine of 10 to 20% of the amount on a cheque with no coverage or not less than 1,000 dinars shall be levied on an organization of associated labor or any other legal entity that:
1) in the role of a drawer, will issue a cheque with insufficient or no coverage;
2) in the role of a drawer and despite being aware of its inability to legally cancel a cheque, disposes of the coverage in such a manner as to prevent payment of the cheque (article 15);
Employees with relevant responsibility in an organization of associated labor or other legal entities shall also be fined for a violation described in paragraph 1 of this article, with a money fine of 2 to 10% of the amount on the cheque with no coverage or not less than 500 dinars.
Individuals shall also be fined for a violation described in paragraph 1 of this article, with a money fine of 2 to 10% of the amount on the cheque with no coverage or not less than 500 dinars.
In case of paragraph 1 of this article, the drawer shall compensate the cheque owner for the damage incurred (article 4).
This Law shall come into effect on the date of its publication in the Official Gazette of the Socialist Federative Republic of Yugoslavia.
THE TRANSLATION OF THE ABOVE TEXT IS FOR DESCRIPTIVE PURPOSES ONLY AND MAY NOT BE USED AS A BASES FOR ANY LEGAL ACTION.