The February 1, 1988 draft of Article 4A (hereinafter referred to as 4A)1 of the Uniform Commercial Code (UCC) represents a fairly refined product of the drafting effort. It has been preceded by some half-dozen drafts and reflects a growing consensus that began with a December 1985 meeting of those interested in the subject.
It is a great pleasure for me to be able to speak to you about the legal questions arising out of the development of electronic funds transfer and, in particular, to tell you some about the work being carried out in this field by UNCITRAL, the acronym for the United Nations Commission on International Trade Law. The timing of this seminar could not have been more appropriate from our point of view, because in two months a working group of UNCITRAL will meet to examine a first draft of Model Rules for Electronic Funds Transfers that has been prepared by our secretariat. I must emphasize that this draft is the product of the secretariat; it has not as yet had any review by any committee or other intergovernmental body of UNCITRAL.* Nevertheless, its very existence and the fact that the process of considering it will begin in July are indications of the importance the subject has taken on and the response of UNCITRAL to some of the problems that are raised by this new phenomenon.
In 1968, at its first session, the United National Commission on International Trade Law (UNCITRAL) decided to make one of its priority projects the harmonization and unification of the law of international payments and, in particular, the law of negotiable instruments. In 1987, UNCITRAL formally adopted a final draft of its proposed Convention on International Bills of Exchange and International Promissory Notes* (hereinafter referred to as the “Convention”).1
Financial sector reforms are policy measures designed to deregulate the financial system and transform its structure with the view to achieving a liberalized market-oriented system within an appropriate regulatory framework. The pace of financial sector reform and innovation began to accelerate in the late 1970s in many industrial countries and in the early 1980s in a number of developing countries of the Pacific Basin and Latin America. Currently, major financial reforms are under way in many African countries and in Eastern Europe. The initial situation in many developing countries and in the formerly centrally planned economies of Europe was characterized by direct controls on interest rates and credit allocation, the absence of well–developed money and securities markets, and underdeveloped and highly regulated banking systems. With reform of the financial sector, this situation is giving way to a greater flexibility in interest rates, an enhanced role for market forces in credit allocation, a gradual deepening of money and securities markets, and increased autonomy for commercial banks. Alongside these developments, the framework of monetary policy is also undergoing major changes. Bank-specific credit ceilings and selective credit allocations are being replaced by market-based instruments for implementing monetary policy, and prudential supervision systems are being put into place to foster sound credit decisions.