F!I.r:CO···O'({1\"""1"-•, UNITED NATIONS GENERAt ASSEMBLY UNITED NATIONS COMMISSION ON INTERNATIONAL TRADELAW Eighteenth session Vienna, 3--21June1985Dish-. GENP.RAL A/CN.9/266/Add.1 30April1985 ORIGINAL: ENGLISH •DRAFTLEGALGUIDE ONELECTRONIC FUNDSTRANSFERS CHAPTER ON FINALITY OFFUNDSTRANSFER ReportoftheSecretary-General (continued) CONTENTS Paragraphs Page Introductory Note .1-3 3 A.Whenfundstransfers becomefinal .4-22 3 •••1. 2.Credittransfers . (a)Debittotheaccount ofthet~ansferor ... (b)Credittotheaccount ofthetransferee bank . (c)Noticeofcredittotheaccount ofthe transferee bank . (d)Transferee bankdecides toacceptcredit transfer . (e)Entryofcredittotransferee's account .. (f)Entryatcreditsubject toreversal . (g)Noticetothetransferee . (h)Payment incash . Debittransfers5-20 5-7 8 9 10-11 12-16 17 18-19 20 21-223 3 4 4 4 5 6 6 6 7 B. C.Relationship between finality oftransfer between customers andfinality oftransfer between banks... Changes intechnology affecting finality .23-30 31-/187 9 V.85-25584A/CN.91266/Add.l English Page2 Paragraphs 1. 2. ~. 4. 5. 6. 7.Individual processing ofpaper-based instructions . Batch-processing . On-line dataprocessing . Customer-activated terminals '" '" Guarantee ofhonourbytransferor bank . Microcircuit cards . Computer-ta-computer teleconwunication of fundstransfer instructions .32 33 34-37 38-40 41-43 114-479 10 10 11 12 13 14 D.Consequences associated withfinality 49-96 14 Rulesonfinality andsystemrisk . E.1. 2. 3. 4. 5.General rulesgivingpriority tofunds transfer . Specific conflicts inpriority . (a)Effect onfundstransfer oflegalrightsof thirdpersons . (i)Deathofthetransferor . (ii)Commencement ofinsolvency proceedings against transferor (iii)Legalincapacity oftransferor (iv)Attachment ofthetransferor's account . (v)Withdrawal offundtransfer instruction bytransferor . (b)Notices giventoabank . Reversal oferroneous fundstransfers (a)Reversal ofdebiton demand of transferor . (b)Recovery ofcreditinadebittransfer on demandoftransferor bank . (c)Recovery ofcreditinacredittransfer .. (d)Rightofbanktorecover creditby reversing entry . Availability offunds . Discharge oftheunderlying obligation .49-50 51-68 51-61 53 54 55 56-59 60-61 62-68 69-80 71-73 74-76 77-78 79-80 81-91 92-96 97-9914 15 15 15 15 16 16 17 17 19 19 20 21 21 21 24 25• • • Annex National experience inreducing systemrisk..... 271• • •A/CN.9/266/Add.l English Page3 Introductory Note 1.Finality ofafundstransfer isoftenconsidered tobe oneofthe important unifying concepts inthelawoffundstransfers. Inmanylegal systems, important legalconsequences areconsidered tooccuratthetimewhen