Unofficial Translation

LAW ON NEGOTIABLE INSTRUMENTS AND PAYMENT TRANSACTIONS

24 October 2005

CHAPTER I- GENERAL PROVISIONS

Article  1. This  Law  governs  negotiable  instruments  and  payment  transactions  and covers bank accounts and the operation of the payment system.

1. endorsement. Negotiable instruments governed by the Law are checks, bills of exchange, and promissory  notes.

1. money and the transfer of monetary value by means of payment transactions.

Article 2. Definition s of techni cal words and terms used in this Law:

1.    "Vis major " means an insurmountable obstacle, caused by a supervening event

beyond the control of the person  who is to perform.

1. "To issue" is to write,   sign   and  deliver   a  check,   bill   of   exchange,  or

promissory not e to the first holder.

1. draw" is to write and sign a check or bill of exchange.

1. ttlement" means the payment in discharge of an obligation on an interbank

payment order.

1. "Presentment" means  the  produ ction  of  a  check ,  bill  of   exchange  or  a

promissory note to demand acceptance or payment from the drawee or maker.

1. "Execution" in  Chapter  V  means  the carrying  out  of  instructions  contained  in  a

payment order by means of the issue of a corresponding payment order to a receiving bank.

1. learing" means exchanging and processing interbank payment orders for the purpos e of establishing amounts owed by or to each bank for the settlement of payment orders.

1. transfer " means a transfer of funds, from a payor to a payee at the same bank, having one payment order. Participants in an in-hous e transfer are the originator , bank acting both as originating and destination bank, and the receiver.

1. tran sfer " means a transfer of funds from a payor to a payee in two separate banks under at least two payment orders. In an interbank transfer:

• h receiving bank other than the destination  bank  executes  its send er 's payment order by issuing a corresponding payment order to a receiving bank , and the last payment order is sent to the destination bank ;

• , destination bank and the receiver, and may include one or more intermediary banks;

• destination bank at least one intermediary bank is required; and

• receiving bank as provided in Article 202.

1. , based on the payor 's authority, instructing the payee's bank to collect money from the payor's account.

1. " means a payment transaction originated by the payor, who issues a payment order to the payor 's bank instructing it to transfer funds out of the payor's account to the payee or to the payee's account.

1. and a bank, whether current, giro, or otherwise, and includes an account under an ad hoc relationship created solely for the purpose of generating a single payment transaction.

1. ttlement account " means the account that a bank maintains on  the books

of the NBC for carry ing out incoming and outgoing payment tr ansactions.

1. Passbook account " means an account und er which debits and credits are posted by the bank recor ding them in a passbook originally given by the bank to t he customer and pr esented to the bank for su ch r ecording by the customer.

1. uration " mean s by limited authority to collect on behalf of the transferor.

1. lectronically " means by means of either on line telecommunication or the off-line physical delivery of tapes, diskett es, or similar devices.

1. lue in collecti on " means value to be received by the tr ansferor upon collection or recovery on the instrument by the tran sferee.

1. lue in security" or "Value in pledge" indicates tr an sfer by way  of security, or a transfer intended to cr eate a security inter est , and not to convey title

1. nking day" mean s the part of the day during which the bank is open for the receipt , processing, and tr ansmittal of payment orders and other messages relating to payment transacti ons.

1. lue date" means the banking day on which a payment order is to be acted on as instructed by the send er.

1. nk " includ es the N ational Bank of Cambodia, any institution licensed to carry out banking operations und er the Law on Banking and Financial Institutions, and any other institution or entity authori zed by law to take deposits or par ticipate in payment transacti ons on the account of customer s.

A branch or a separate office of a bank is considered a separ ate bank for the purposes of (i) duties in the perfor mance of a payment transaction , and (ii) computing the time within

which , or determining the place at or to which, action may be taken or notice or order must be given.

1. either payment to the payee in a credit transfer is to take place or the payor's account in a debit transfer is held. It is the bank which is to receive the last payment order in a payment transaction. In a credit transfer the destination bank is the payee's bank. In a debit transfer the destination bank is the payor's bank.

1. initiating a payment transaction. In a credit transfer the originating bank is the payor's bank. In a debit transfer the originating bank is the payee's bank.

1. addressed.

1. r mediary bank" means a receiving bank other than the originating or destination bank.

1. customer and a receiving bank for the purpose of (i) verifying that a payment or cancellation order is that of the customer, or (ii) detecting an error in the transmission or the content of the payment or cancellation order. A security procedure may require the use of algorithms or other codes, identifying words or numbers, encryption, callback procedur es, or similar devices. Comparison of a signature on a payment order or communication with an authorized specimen sign ature of the cu stomer is n ot by itself a security procedur e .

1. tour sans frais" literally mean s "r eturn without charges", and signifies an und ertaking to honor , that is, to allow r ecourse against a party liable, without requiring the holder to have a protest drawn up.

1. Payment order " means an instruction given to a bank to pay or collect a specific sum of money out of a designated account, to or for a payee, or to or for a payee 's account , and includ es any amendment to a payment order. It may be value­ dated but not be subjec t to a condition other than as the originating bank agr eed to perform. Parti es to a payment order are the send er and the r eceiving bank. Where the send er is a bank the payment order is an interbank payment order .

1. Drawer " means the person who gives the order to pay on a check or bill of exchange.

1. Dr awee"  means t he per son to whom the order to pay on a check  or bill of

exchange is addressed.

1. "Payment tr ansaction " mean s a tran sfer of funds from the payor's account to

the payee or to the payee's account. A payment transaction

M ay be either a credit or a debit tran sfer ;

Is initiated by the originator's payment order given to the originating bank ,

instructing it to carry out the payment tran saction ;

Is carried out by the payor 's bank debiting the payor 's account , with the payee's bank either crediting the payee's account or otherwise placing the fund s at the payee 's control and disposal as instructed by the originator ;

M ay be a transfer of funds from a payor to a payee who may be t he same or two differ ent ind ividuals or legal entit ies; and

May be a transfer of fun ds in which the payor 's account is held, and payment to the

payee takes place, in either the same or two different banks.

1. Endorsement" means a signature on the back of  a  negotiable  instrument, with or without qualifying words. An effective endorsement is completed by delivery.

1. funds, namely the existence of an account balance not smaller than the amount of the payment order , consisting of the closing balance of the previous banking day , plus credit already posted to the payor 's account in the course of the current banking day for incoming payments , deposits and remittances, less outgoing payments and disbursements already occurring in the course of the current banking day , and anticipated bank charges. Funds reflecting mere provisional credit to the payor 's account do not constitute part of the required cover.

1. unds" includes cash and deposits kept in bank accounts.

1. promissory note.

1. Foreign currency" means any currency other than the domestic currency.

1. " means the riel, or any successor or replacement as the official currency of the Kingdom of Cambodia.

1. ,  such as default in  or refusal of acceptance,  payment ,  or  given  visa, which entitle the holder  to recourse on  a negotiable instrument.  A  protest  must be  made  as  and when required by specific provision of  this law.

1. ptance"  means the engagement of the drawee of a bill of exchange to  comply

with the drawer's order. To be effective it must be completed by delivery or notification.

1. "For collection " in an end orsement indicates that the endor sement is  not designed to convey titl e but is for the purpose of facilitating collection or recovery  on the instrument by the tr ansferee on behalf of the tr ansferor.

4 3.  "Payee" in Chapter s II, III, and IV means the person in whose favor a check ,

bill of exchange or promi ssory n ote is made payable upon issuance.

44.    "Customer "  means an  individual , whether  carry ing  on  a  bu siness  or  n ot,  or  a

legal entity, including a bank , having an account with a bank.

4 5. "Intervention for honor " means the procedure under which a per son who is not liable on a negotiable instrument intervenes in order to accept or pay for the honor of any party liable.

4 6.  "Maker of promi ssory note" is the person who makes the promise to pay on a

promissory note.

1. nder " means the individual or legal entity giving a payment order to a

receiving bank.

1. riginator " means the sender of the first payment order initiating the payment transaction. In a credit transfer the originator is the payor. In a debit transfer the originator is the payee.

1. . "Receiver"  mean s the participant whose bank is to receive the last  payment order in the payment tran saction. In a cr edit tran sfer the receiver is t he payee . In a debit transfer the receiver is the payor .

1. transaction and in a debit transfer includes the payee's transferee under a valid transfer, if applicable. It is the receiver in a credit transfer and the originator in a debit transfer.

1. " means the participant who is to make payment in a payment transaction. It is the originator in a credit transfer and the receiver in a debit transfer.

1. " means the right to recover from a party liable on a negotiable instrument.

CHAPTER  11– CHECKS

SECTION 1-THE DRAWING AND FORM OF A CHECK

Article 3. A check is an unconditional order in writing,  addressed to a banker and signed by the person giving the order, requiring the banker to pay a determinate sum of money to, or to the order of a specified person or to bearer. It must be payable at sight and conform to all requirements provided by this Chapter.

Article  4. A check is a payment instrument. It may be written in Khmer or any

other language and mu st contain:

The term "check " inserted in the body of the instrument and expr essed in the language employed in drawing up the instrument ;

An un conditi onal order to pay a deter minate sum of money; The name of the banker who is to pay (drawee);

A statement of the pl ace where payment is to be made;

A statement of the date when and the pl ace wher e the check is drawn ; The sign ature of the per son who gives the order on the check (drawer) .

Article 5. An instrument in which any of the requirements mentioned in the preceding article

is wanting is invalid as a check, except in the cases specified in the following paragraphs:

1. In the absence of special mention, the place specified beside the name of the drawee is deemed to be the place of payment. If several places are named beside the name of the drawee, the check is payable at the first pl ace named.

1. e absence of these statements, and of any other indication , the check is payable at the place where the drawee has his principal establishment.

1. check which does not specify the pl ace at which it was drawn is deemed to have been drawn in the pl ace specified beside the name of the drawer .

Article 6. A check must be drawn on a banker holdin g funds at the disposal of the drawer and in conf ormity with an agr eement express or implied , whereby the dr awer is entitled to dispose of those funds by check. N evertheless, if these provi sions ar e not complied with , the in strument is still valid as a check.

Article 7.

1.   A check cannot be accepted. A statement of acceptance on a check shall be disregarded.

2.   A  check does not operate as an assignment of  funds in the hands of the drawee available for payment thereof and the drawee of a check is not liable to the holder.

Article 8.

1. any equivalent words, is deemed to be a check to bearer.

1. bearer.

Article 9.

1. A check may be drawn to the drawer's own order.

1. check may be drawn for account of a third person.

1. A check may not be drawn on the drawer  himself unless it is drawn by one establishment on another establishment belongin g to the same drawer.

Article 10. Any stipulation concerning interest which may be embodied in the check shall be disregarded.

Article 11. A check may be payable at the domicile of a third person either in the locality where the drawee has his domicile or in another locality , provided that such third person is a banker.

Article 12.

1. Where the sum payable by a check is expressed in word s and also in figures,

and there is any discrepancy , the sum denoted by the words is the amount payable.

2.  Where the sum payable by a check is expressed more than once in words or mor e

than once in figures, and ther e is any discrepan cy, the smaller sum is the sum payable.

Article 13. If a check bears signatures of persons incapable of  binding  themselves  by  a check, or forged signatures, or signatures of fictitious persons, or signatures which for any other reason cannot bind the persons who signed the check or on whose behalf it was signed, the obligations of the other persons who have signed it are none the less valid.

Article 14. Whoever puts his signature on a check as representing a person  for whom  he  had  no power to act is bound himself as a party  to the check and, if he pays ,  has the same rights  as the person for whom  he  purported  to act. The same rule  applies  to a representative  who  has  exceeded his  powers.

Article 15. The drawer guar antees payment. Any stipul ation by which the drawer releases himself from this guarantee shall be disr egar ded.

Article 16. If a check which was incomplete when issued has been completed otherwise than in accordance with the agreements entered into, the non-observance of such agreements may not be set up against the holder unless he has acquired the check in bad faith or, in acquiring it, has been guilty of gross negligence.

Article 17.

SECTION 2- ENDORSEMENT

1. or any equivalent expression have been inserted, can only be transferred according to the form and with the effects of an ordinary assignment.

1. These persons may re-endorse the check.

Article 18.

1. endorsement is null and void.

1. by the drawee is also null and void.

1. endorsement  "to bearer" is equivalent to an endorsement in blank.

1. to the drawee has the effect only of a receipt, except in the case where the drawee has several establishments and the endorsement is made in favor of an establishment other than that on which the check has been drawn.

Article 19.

1. endorsement must be written on the back of the check or on a slip affixed thereto (allonge). It must be signed by the endorser.

2. The endorsement may leave the beneficiary unspecified or may consist simply of

the signature of the endorser  (endorsement in blank).

Article 20.

1. the rights arising out of a check.

1. the endorsement is in blank , the holder may:

• up the blank either with his own name or with the name of some other

person;

• the check in blank or to some other person;

• check to a third person without filling up the blank and without endorsing it.

Article 21.

1. payment.

1. ; in this case he gives no guarantee to the persons to whom the check is subsequently endorsed.

Article 22. The possessor of an endorsable  check is deemed to be the lawful holder  if he establishes his title to the check through an uninterrupted  series  of  endorsements , even if the last endorsement is in blank. In this connection cancelled endorsements shall be disregarded. When an endorsement in blank is followed by another endorsement, the person who signed this last endorsement is deemed to have  acquired the check by the endorsement  in blank.

Article 23. An endorsement on a check to bearer renders the endorser liable in accordance with the provisions governing the right of recourse; however, it does not convert the instrument into a check to order.

Article 24. Wher e a person has, in any manner whatsoever, been dispossessed  of  a check, whether it is a check to bearer or an endorsable check to which the holder establishes his right in the manner mentioned in Article 22 , the holder into whose possession the check has come is not bound to give up the check unless he has acquired it in bad faith or unless in acquiring it he has been guilty of gross n egligen ce.

Article 25.

1. ersons sued on a check cannot set up against the holder defen ses found ed on their personal relations with the drawer or with previous holders, unl ess the holder in acquiring the check has knowingly acted to the detriment of the debtor .

1. aragraph 1does n ot apply to a check made payable to a specified per son , in

whi ch the wor ds "not to order " or any other equivalent expression have been inserted.

Article 26.

1. en an endor sement contains the statement  "value in collection " ("valeur en recouvrement ") , "for collection " ("pour encaissement"), "by procur ation " ("par procuration "), or any other phr ase implying a simple mand at e, the holder may exer cise all r ights arising out of the check, but he can r e-endor se it only in his capacity as agent.

1. s case the parties liable can only set up against the holder defenses which could be set up against the endor ser.

1. he mandate contained in an endor sement by procuration does not terminate by reason of the death of the party giving the mand ate or by reason of his becoming legally incapable.

Article 27.

1. ndorsement after protest or after an equivalent declaration or after the

expir ation of the limit of time for presentment

• erates only as an ordinary assignment ; and

ii. Does not operate to give rights under Articles 22, 24, and 25.

SECTION 3- "AVALS"

Article 28.

1. amount.

1. by a person who has signed the check.

Article 29.

1. It isexpressed by the words "good  as aval,"  or  by  any  other  equivalent formula. It is signed by the giver of the "aval".

1. constituted by the mere signature of the giver of the "aval," placed on the face of the check.

1. An "aval" must specify for whose account  it is given. In default of  this , it is

deemed to be given for the drawer. Article 30.

1. The giver of an "aval " is bound in the same manner as the person for whom he has become guarantor.

1. valid even when the liability which he has  guaranteed is

inoperative for any r eason other than defect of form.

1. , when he pay s the check, the rights arising out of the check against the person guaranteed and against those who are liable to the latter on the check.

SECTION 4-PRESENTMENT AND PAYMENT

Article 31.

1. check is payabl e at sight. Any contrary stipulation shall be disregarded.

1. A check presented  for payment  before  the date stated  as the  date of issue is

payable on the day of presentment.

Article 32. A check must be present ed for payment within six months of its date.

Article 33. Where a check is drawn in one place and is payable in another havin g a different calendar , the day of issue shall be construed as being the corresponding day of the calendar of the place of payment.

Article 34. The presentment of a check either at or through a clearing-house, or electronically, as provided by agreement or regulations issued by the National Bank of Cambodia, is an effective presentment  for payment.

Article 35.

1. holder.
2. payment on a check has not been countermanded, the drawee may pay it even after the expiration of the time limit for presentment.

Article 36.  Neither the death of the drawer nor his incapacity taking place after the issue of the check shall have any effect as regards the check.

Article 37.

1. refuse partial payment.

1. check and that a receipt shall be given to him.

Article 38. The drawee who pays an endorsable check is bound to verify the regularity of the series of endorsements, but not the signature of the endorsers.

Article 39.

1. check is deemed to be an authorization given to the drawee to pay  in the

currency of the account on which it is drawn.

1. a check is drawn payable in a currency which is not that of the account, the sum payable may be paid by the drawee in the currency of the account according to its value on the date of payment.

1. a check drawn payable  in  a currency  which  is not that  of the  place  of  payment has not been paid on  presentment , the  holder  may  at  his  option  demand  from  a party  liable that payment of the amount of the check be made in the currency of the  place  of  payment according to the rate on the day of presentment  or on the day of payment.

1. the place of paym ent shall be applied in determining the value of foreign currency. Nevertheless , the drawer may stipulate that the sum payable shall be calculated according to a rate expressed in the check.

1. 3, a check either drawn payabl e in  a  currency which is widely accepted in Cambodia, or in which the drawer has stipulated  that payment must be made in a certain specified foreign currency , may be enforced by the holder against any party liable in the stated currency.

1. e amount of the check is specified in a currency having the same denomination , but a different value in the country of payment and the country of issue or any other country, unless specifically  indicated  otherwise, where  the currency  is not that  of  the account , reference in the check is deemed  to  be  made  to  the  curr ency  of  the  country  of  payment.  Where  the curr ency  of  the  country  of  payment  does not  have the  same denomination ,  reference  is deemed

to be made to a currency which is widely accepted in the place of payment.

SECTION 5-CROSSED  CHECKS AND CHECKS PAYABLE IN ACCOUNT

Article 40.

1. The drawer or holder of a check may cross it with the effects stated in the next article hereof.

1. The crossing may be general or special.

1. lines the term "banker" or some equivalent is inserted; it is special if the name of a banker is written between the lines.

Article 41.

1. A check which is crossed generally can be paid by the drawee only to a banker

or to a customer of the drawee.

1. check which is crossed specially can be paid by the  drawee  only  to  the named banker , or if the latter is the drawee , to his customer. Nevertheless the named banker may procure the check to be collected by another banker.

1. may not acquire a crossed check except from one of his customers or from another banker. He may not collect it for the account of other persons than the foregoing.

1. check bearing several special crossings may not be paid  by  the  drawee except in a case where there are two crossings , one of which is for collection through a clearing house.

1. drawee or banker who fails to observe the above provisions is liable for resulting damage up to the amount of the check.

Article 42.

1. The drawer or the holder of a check may forbid its payment in cash by writing transversally across the face of the check the words "payable in account" ("a porter en compte") or a similar expression.

1. such a case the check can only be settled by the drawee by means of book­ entry such as credit in account, transfer from one account to another, set off or clearing ­ house settlement. Settlement by book- entry is equivalent to payment.

1. obliteration of the words "payable in account" shall be deemed not to have taken place.

1. e drawee who does not observe the foregoing provi sions  is liable for resultin g damage up to the amount of the check.

SECTION  6-RECOURSE  FOR  NON-PAYMENT

Article 43.

The holder may exercise his right of recourse against the endorsers, the drawer and the other parties liable if the check on presentment in due time is not paid, and if the refusal to pay is evidenced:

1.  By a protest or any other formal instrument, or

Article 44.

1. A protest shall be signed by an officer legally authorized to authenticate documents. As long as no such person has been designated by law he shall be designated by the National Bank of Cambodia. A protest must contain a copy of the check, or the original check may be annexed thereto, and specify the person at whose request the check is protested, the place and date of the protest, the cause or reason for protesting the check, the demand made and the answer given, if any, or the fact that the drawee cannot be found. It shall be made at the place of the refusal to pay or accept or at some other place in Cambodia situated within 10 kilometers of the place of presentment and refusal to pay or accept.

1. equivalent  declaration  must be  made before the  expiration  of

the limit of time for presentment.

1. the check is presented on the last day of the limit of time, the protest may be drawn up or the equivalent declaration made on the first business day following .

1. of the limits of time fixed for drawing up the protest for non-payment, the holder loses his right of recourse  against parties  liable on the check but may sue the drawer under the Law of contract and ordinary assignment, in an action governed by the Law of contract and assignment. Any recovery under this paragraph is reduced by damages for any injury caused to the drawer by the holder's failure to meet required limits of time.

Article 45.

1. The holder must give notice of non-payment to his endorser and to the drawer within the four business days which follow the day on which the protest is drawn up or the equivalent declaration is made or , in case of a stipulation "retour sans frais", "retour sans protet", or any other equivalent expression, the day of presentment. Every endorser must, within the two business days following the day on which he receives notice, inform his endorser of the notice which he has received, mentioning the names and addresses of those who have given the previous notices and so on through the series until the drawer is reached. The periods mentioned above run from the receipt of the preceding notice.

1. When , in conformity with the pr eceding paragraph , noti ce is given to a per son who has signed a check , the same notice must be given within the same limit of  time to

47

his avaliseur.

1. ed his address or has specified it in an illegible manner, it is sufficient if notice is given to the endorser preceding him.

1. ­ limit shall be regarded as having been observed if a letter giving the notice has been posted within the said time.

1. liable for the damage, if any, caused by his negligence, but the amount of his liability shall not exceed the amount of the check.

Article 46.

1. The drawer , an endorser, or an avaliseur may, by the stipulation "retour sans frai," , "retour sans protet", or any other equivalent expression written on the instrument and signed, release the holder from having a protest drawn up or an equivalent declaration made in order to exercise his right of recourse.

1. the pr escribed limit of time, or from giving the r equisite n otices. The burd en of prov ing the non -observance of the limit of time lies on the person who seeks to set it up against the hold er.

1. e stipulation is written by the drawer , it is operative in respect of all persons who have signed the check; if it is written by an endorser or an avaliseur , it is operative only in respect of such endor ser or avaliseur. If , in spite of the stipulation written by the drawer , the holder has the protest drawn up or the equivalent declaration made, he must bear the expenses thereof. When the stipulation emanates from an endor ser or avaliseur , the costs of the protest or equival ent declaration , if drawn up or made, may be recovered from all the persons who have signed the check.

Article 47.

1. t he persons liabl e on a check are jointl y and sever ally bound to the holder.

1. he hold er has the right to proceed against all these persons individually or collectively without being compelled to observe the order in which they have become bound.

1. e same right is possessed by any person signing the check who has taken it up and

paid it.

1. ceedings against one of the parties liabl e do n ot pr event proceedings against the others, even though su ch other parties may be subsequent t o the par ty first proceeded against.

Article 48. The hold er may claim from the party against whom he exercises his right of recourse:

1. he un paid amount of the check;

1. date of presentment;

1. well as other expenses.

Article 49. A party who takes up and pays a check can recover from the parties liable to him:

1. The entire sum which he has paid;

1. Interest onthesaidsumcalculated ataratedetermined bytheNational BankofCambodia,asfromthedayonwhichhemadepayment;

Article 50.

1. Every party liable against whom a right of recourse is, or may be, exercised, can require against payment, that the check shall be given up to him with the protest or equivalent declaration and a receipted account.

2. Every endorser who has taken up and paid a check may cancel his own endorsement  and those of subsequent endorsers.

Article 51.

1. Should the presentment of the check or the drawing up of the protest or the making of the equivalent declaration within the prescribed limits of time be prevented by an insurmountable obstacle  (vis major), these limits of time shall be extended.

1. give notice without delay of the case of vis major to his endorser and to make a dated and signed declaration of this notice, on the check or on an allonge; in other respects, the provisions of Article 4 5 shall apply.

1. vis major has terminated, the holder must without delay present the check for payment and, if need be, procure a protest to be drawn up or an equivalent declaration made.

1. vis major continues to operate beyond fifteen days after the date on which the holder, even before the expiration of the time-limit for presentment , has given notice of vis major to his endorser, recourse may be exercised and neither presentment, not a protest nor an equivalent declaration,  shall be  necessary.

1. purely personal to the holder or to the person whom he has entrusted with the presentment of the check or the drawing up of the protest or  the making of the equivalent declaration are not deemed to constitute cases of vis major.

1. on a check that has been lost or destroyed may be enforced  only against security provided by the party  enforcing the check, which to the satisfaction of the court indemnifies the party liable on it against any claim of any other person on the check if it reaches a holder who acquires it otherwise than in bad faith or gross negligence.

SECTION 7- CHECK COLLECTION

Article 52.

1. Where a check is delivered to a banker for deposit to the credit of the customer and the banker credits him with the amount of the check,  the banker acquires  all the rights and powers of a holder of the check.

1. banker may debit the account or shall otherwise have recourse from the customer if the check is not paid. Unless otherwise agreed, any withdrawal of such provisional credit is at the banker's sole discretion and subject to charge-back or recourse from the customer if the check is not paid.

1. 1 are:

ii. Notwithstanding anything to the contrary in Article 26 where it otherwise applies.

Article 53.

The delivery of a check to a banker for collection is a payment order governed by Chapter V of this Law. In case of an inconsistency with respect to a check between a provision of Chapter V of this Law and a provision of this Chapter , this Chapter prevails.

SECTION 8-ALTERATIONS

Article 54. In case of alteration of the text of a check, parties who have signed subsequent to the alteration are bound according to the terms of the altered text; parties who have signed before the alteration are bound according to the terms of the original text.

SECTION 9-LIMITATION  OF ACTIONS OF RECOURSE

Article 55.

1. Actions of recourse by the holder against the endorsers , the drawer and the other parties liable are barred after six months as from the expiration date of the limit of time fixed for presentment.

2. Actions of recourse by the different parties liable for the payment of a check against other such parties are barred after six months as from the day on which the party liable has paid the check or the day on which he was sued thereon.

Article 56. Interruption of the period of limitation under Article 55 is only effective against the person in respect of whom the period has been interrupted.

SECTION 10-TIME CALCULATIONS

Article 57.

Article 58. The limits of time stipulated in the present Chapter shall not include the day on which the period commences.

Article 59. No days of grace, whether legal or judicial,  are permitted.

CHAPTER III-BILLS OF EXCHANGE

SECTION 1-ISSUE AND FORM OF A BILL OF EXCHANGE

Article 60. A bill of exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay a determinate sum of money to, or to the order of, a specified person, or to bearer. It must be payable at a maturity and conform to all requirements as provided by this Chapter.

Article 61. A bill of exchange is a credit instrument. It may be written in Khmer or any other language and must contain:

The term "bill of exchange" or "draft" inserted in the body ofthe instrument and

expressed in the language employed in drawing up the instrument; An unconditional  order to pay a determinate sum of money; The name of the person who is to pay (drawee);

A statement of the time of payment;

A statement of the place where payment is to be made ;

The name of the person to whom or to whose order payment is to be made; A statement of the date and of the place where the bill is issued;

The signature of the person who gives the order on the bill (drawer).

Article 62. An instrument in which any of the requirements mentioned in the preceding article is wanting is invalid as a bill of exchange, except in the cases specified in the following paragraphs:

1. A bill of exchange in which the time of payment is not specified is deemed to be payable at sight.

1. efault of special mention , the pla ce specified beside the name  of  the drawee is deemed to be the place of payment , and at the same time the place of the domicile of the drawee .

1. , which does not mention the place of its issue , is deemed to have been drawn in the place mentioned beside the name of the drawer.

Article  63. A bill  of  exchange may be drawn  payable  to drawer's  order. It may be drawn on the drawer himself or for account of a third person.

Article 64. A bill of exchange may be payable at the domicile of a third person either in the locality where the drawee has his domicile or in another locality.

Article 65.

1. drawer may stipulate that the sum payable shall bear interest. In the case of any other bill of exchange, this stipulation is deemed not to be written (non ecrite).

1. Interest runs from the date of the bill of exchange, unless some other  date  is

specified. Article  66.

1. en the sum payable by a bill of exchange is expressed in words and also in figures, and there is a discrepancy between the two, the sum denoted by the words is the amount payable.

1. ere the sum payable by a bill of exchan ge is expr essed mor e than once in words or more than once in figures, and there is a discrepan cy, the smaller sum is the sum payable

Article 67. If a bill of exchange bears signatur es of persons incapable of binding themselves by a bill of exchange, or forged signatures, or signatures of fictitious persons, or signatures which for any other reason cannot bind the persons who signed the bill of exchange or on whose behalf it was signed, the obligations of the other persons who signed it are nonetheless valid.

Article 68. Whosoever puts his signatur e on a bill of exchange as representing a person for whom he had no power to act is bound himself as a party to the bill and , if he pays, has the same rights as the person for whom he purport ed to act. The same rule applies to a

representative who has exceeded his powers.

Article 69.

1. e drawer guarantees both acceptance and pay ment.

1. may release himself from guaranteeing acceptance but may not release himself from guaranteeing payment.

Article 70. If a bill of exchange which was incomplete when issued has been completed otherwise than in  accordance with the agreements entered into, the non-observance of such agreements may not be set up against the holder unless he has acquired the bill of exchange in bad faith or, in acquiring it, has been guilty of gross negligence.

SECTION  2-ENDORSEMENT

Article 71.

1. A bill of exchange payable to a specified person, with or without the express clause "to order", may be transferred by means of endorsement.

1. person the words "not to order" or an equivalent expression, the instrument can only be transferred  according to the form, and with the effects of an ordinary assignment.

1. has accepted or not, or of the drawer, or of any other party to the bill. These persons may re-endorse the bill.

Article 72.

1.  An endorsement must be unconditional. Any condition to which it is made

subject is deemed not to be written (non ecrite).

1. endorsement is null and void.

1. endorsement "to bearer" is equivalent to an endorsement in blank.

Article 73.

1. An endorsement must be written on the back of the bill of exchange or on a slip affixed thereto  (allonge). It must be signed by the endorser.

2. The endorsement may leave the beneficiary unspecified or may consist simply

of the signature of the endorser  (endorsement in blank).

Article 74.

1. An endorsement transfers all the rights arising out of a bill of exchange.

1. the endorsement is in blank , the holder may:

• either with his own name or with the name of some other

person;

• -endorse the bill in blank, or to some other person;

• the bill to a third person without filling up the blank, and without

endorsing it.

Article 75.

1. the absence of any contr ary stipulation , the endor ser guar antees acceptance

and pay ment.

1. to the persons to whom the bill is subsequently endorsed.

3. An endorsement on a bill of exchange to bearer renders the endorser liable in accordance with the provisions governing the right of recourse; however, it does not convert the instrument into a bill of exchange to order.

Article 76.

Article 77.

1. sued on a bill of exchange cannot set up against the hold er defenses founded on their personal relations with the drawer or with previous hold ers, unless the holder , in acquiring the bill, has knowingly acted to the detriment of the debtor.

1. 1 does not apply to a bill of exchange mad e payable to a specified person, in which the words "not to order " or any other equivalent expression have been inserted.

Article 78.

1. an endors ement contains the statements "value in collection" ("valeur en recouvrement ") , "for collection" ("pour encaiss ement ") , "by procuration " ("par procuration") or any other phrase implying a simple mandate , the holder  may exercise all rights arising out of the bill of exchange, but he can only endorse it in hi s capacity as agent.

1. s case, the parties liable can only set up against the holder  defenses which

could be set up against the endorser.

1. e contained in an endorsement by procuration does not terminate by reason of

the death of the party giving the mandate or by reason of his becoming legally incapable.

1. delivery of a bill of exchange to a banker for collection is a payment order governed by Chapter V of this Law. In case of an inconsisten cy with r espect to a bill of exchange betw een a provision of Chapter V of this Law and a provision of this Chapter, this Chapter pr evails.

Article 79.

1. en an endor sement contains the stat ements "value in security "  ("valeur en

garantie") , "value in pledge" ("valeur en gage"), or any other statement  implying  a pledge, the holder may exercise the rights arising out of the bill of exchange, but an endorsement by him has the effect only of an endorsement by an agent.

Article 80.

2. Failing proof to the contrary, an undated endorsement is deemed to have been placed on the bill of exchange prior to the protest or equivalent declaration or prior to the expiration of the limit of time referred to in the preceding paragraph.

SECTION  3-ACCEPTANCE

Article 81. Until maturity, a bill of exchange may be presented to the drawee for acceptan ce at his domicile, either by the hold er or by a per son who is mer ely in possess ion of the bill.

Article 82.

1. In any bill of exchange , the drawer may stipul ate that it shall be pr esented for

acceptance with or without fixing a limit of time for presentment.

1. in the case of a bill payable at the address of a t hird party or in a locality other than that of the domicile of  the drawee, or, except  in the case of a bill drawn payable at a fixed period after sight , the drawer may prohibit presentment for acceptance .

1. may also stipulate that presentment for acceptance shall not take place before a

named date.

1. ess the drawer has prohibited acceptan ce , every endor ser may stipul ate that the bill shall be presented for acceptance, with or without fixing a limit of time for presentment.

Article 83.

1.  Bills of exchan ge payable at a fixed period after sight must be presented for acceptance within one year of their date.

1. e drawer may abridge or extend this period.

1. hese periods may be abr idged by the endorsers.

1. The drawee may demand that a bill shall be presented to him a second time on the day after the first presentment. Parties interested are not allowed to set up that this demand has not been complied with unless this request is mentioned in the protest.

2. The holder is not obliged to surrender to the drawee a bill pres ented for acceptance.

Article 85.

1. A n acceptance is written on the bill of exchange. It is expressed by the word "accepted" or any other equivalent ter m. It is signed by the drawee. The simple signature of the drawee on the face of the bill constitutes an acceptance.

2. When the bill is payable at a certain time after sight, or when it must be presented for acceptance within a certain limit of time in  accordance with a special stipulation, the acceptance must be dated as of the day when the acceptance is given , unless the  holder requires that it shall be dated as of the day of presentment. If it is undated , the holder, in order to preserve his right of recourse against the endorsers and the drawer, must authenticate the omission by a protest drawn up within the proper time.

Article 86.

1. An  acceptance is unconditional , but the drawee may restrict it to part  of the sum  payable.

2. Every other modification intr oduced by an acceptance into the tenor of the bill of exchange operates as a r efusal t o accept. Nevertheless, the acceptor is bound according to the terms of his acceptan ce as modifying the tenor of the bill of exchange.

Article 87.

1. When the drawer of a bill has indicated a place of payment other than the domicile of the dr awee without specifying a third par ty at whose addr ess payment must be made, the drawee may name su ch thir d party at the time of acceptan ce. In default of this indication , the acceptor is deemed to have undertaken to pay the bill himself at the pl ace of payment.

2.   If a bill is payable at the domicile of the drawee , the latter may in his acceptance

indicating an address in the same place where payment is to be made.

Article 88.

1. A bill of exchan ge does not oper ate as an assignment of funds in the hands of the drawee available for payment  ther eof , and the drawee of a bill of exchan ge who does not accept is not liable on the bill of exchan ge.

1. pting, the drawee undertakes to pay the bill of exchange at its maturity .

1. efault of payment, the holder, even if he is the drawer , has a direct action on the bill of exchange against the acceptor for all that can be demanded in accordance with Art. 106-107.

1. restoring the bill, acceptance is deemed to be refused. Failing proof to the contrary, the cancellation is deemed to have taken place before the bill was restored.

1. Nevertheless, ifthedraweehasnotifiedhisacceptanceinwritingtotheholderortoany party who has signed the bill, he is liable to such parties according to the terms of his acceptance.

SECTION 4- "AVALS"

Article 90.

1. Payment of a bill of exchange may be guaranteed by an "aval" as to the whole or part of its amount.

2. This guarantee may be given by a third person or even by a person who has signed as a party to the bill.

Article 91.

1.  An "aval" may be given either on the bill itself or on an "allonge."

1. s expressed by the words "good as aval" ("bon pour aval") or by any other equivalent formula. It is signed by the giver of the "aval."

1. is deemed to be constituted by the mere signature of the giver of the "aval" placed on the face of the bill, except in the case of the signature of the drawee or of the drawer.

1. "aval" must specify for whose account it is given. In default of this , it is deemed to be given for the drawer.

Article 92 .

1. giver of an "aval" is bound in the same manner as the person for whom he has become guarantor.

1. g is valid even when the liability which he has guaranteed is inoperative for any reason other than def ect of form.

1. when he pays a bill of exchange, the rights arising out of the bill of exchange against the person guaranteed and against those who are liable to the latter on the bill of exchange.

SECTION 5-MATURITY

Article 93.

1. of exchange may be drawn payable:

• sight;

• after sight;

• a fixed period after date; or

• fixed date.

1. , each at a fixed date, with a provision that in default in payment of any installment the  entire unpaid  balance  shall become  due;

period. These periods may be abridged by the endorsers.

1. presented for payment before a named date. In this case, the period for presentment begins from the said date.

Article 95.

1.  
2. regards the

acceptor, to have been given on the last day ofthe limit of time for presentment for acceptance. Article   96.

1. ere a bill of exchange is drawn payable at one or more months after date or after sight , the bill matures on the corresponding date of the month when payment must be made.

If there be no corresponding date, the bill matures on the last day of this month.

1. en a bill of exchange is drawn pay able at on e or more months and a half after date or sight , entire months mu st first be calculated.

1. the maturit y is fixed at the commencement , in the middle, or at the end of the month, the first, fifteenth or last day of the month is to be und erstood.

1. he expression "eight days" or "fifteen days" indicates n ot on e or two weeks,

but a period of eight or fifteen actu al days.

1. he expression "halt month " means a period of fifteen days Article  97.

1. en  a  bill  of  exchange  is  payable  on  a  fixed  day  in  a  pl ace  where  the calendar  is different  from the calendar  in the pl ace  of issue,  the day  of  maturity  is

deemed to be fixed according to the calendar of the place of payment.

1. en a bill of exchan ge drawn between two pl aces having dif ferent calendars is payable at a fixed period after date, the day of issue is r eferred to the correspondin g day of the calendar in the pl ace of payment , and the maturity is fixed accordingly .

1. e time for pr esenting bills of exchan ge is calculated in accordance with the rules of the preceding par agraph.

4 . These rules do not apply if a stipulation in the bill or even the simple terms of the instrument indicate an intention to adopt some differ ent rul e .

SECTION 6-PAYMENT

Article 98.

1. The holder of a bill of exchange payable on a fixed day or at a fixed period after date or after sight must present the bill for payment either on the day on which it is payable or on one of the two business days which follow.

2. The presentment of a bill of exchange either at or through a clearing-house, or electronically, as provided by agreement or regulations issued by the National Bank of Cambodia, is an effective presentment for payment.

Article 99.

1. The drawee that pays a bill of exchange may require that it shall be given up to him receipted by the holder.

Article 100. When a bill of exchange is not presented for payment within the limit of time fixed by Article 98, every debtor is authorized to deposit the amount with the competent authority, as designated by the National Bank of Cambodia, at the charge, risk and peril of the holder.

Article  101

1. The holder of a bill of exchange cannot be compelled to receive payment

thereof before maturity.

1. drawee who pays before maturity does so at his own risk and peril.

1. pays at maturity is validly discharged , unless he has been guilty of fraud or gross negligence. H e is bound to verify the r egularity of the series of endorsements, but not the signature of the endors ers.

Article  102.

1. When a bill of exchange is drawn payable in a currency which is not that of the place of payment , the sum payable may be paid in the currency of the country, according to its value on the date of maturity. If the debtor is in default, the holder may at his option demand that the amount of the bill be paid in the currency of the  country according to the rate on the day of maturity or the day of payment.

1. usage of the place of payment  determines the value of foreign currency. Neverthele ss, the drawer may stipulate that the sum payable shall be  calculated according to a rate expressed in the bill.

1. rules shall not apply to a bill of exchange (i) drawn payable in a currency which is accepted in Cambodia, or  (ii)  in which the drawer  has stipulated that payment mu st be made in a certain specified foreign curren cy . In each su ch case the bill of exchange shall be paid in the stated currency .

1. the amount of the bill of exchange is specified in a  currency  having the same denomination, but a different value in the country of payment and the country of issue or any other country, unless indicated otherwise, reference in the bill of exchange is deemed to be made to the currency of the country of payment. Where the currency of the country of payment does not have the same denomination, reference is deemed to be made to a currency which is widely accepted in the place of payment.

SECTION  7-RECOURSE  FOR  NON-ACCEPTANCE   OR  NON-PAYMENT

Article 103. The holder may exercise his right of recourse against the endorsers, the drawer, and the other parties liable:

1. At maturity, if payment has not been made, or,

1. before maturity:

• , or in the event of a stoppage of payment on his part , even when not declared by a judgm ent, or where execution has been levied against his assets without r esult ;

iii.   In the event of the bankruptcy (faillite) of the drawer of a non-acceptable bill.

Article 104.

1.  Default of acceptance or of payment mu st be evidenced by an authentic act (protest for non -acceptance or non -paym ent).

1. acceptance must be  made within the limit of time fixed for presentment for acceptance. If , in the case contemplated by Article 84 , paragraph 1, the first presentment takes place on the last day of that time , the protest may neverthele ss be drawn up on the next day.

1. st for non-payment of a bill of exchange payable on a fixed day or at a fixed period after date or sight must be made on one of the two business days following the day on which the bill is payable . In the case of a bill payable at sight, the protest must be drawn up under the conditions specified in the foregoing paragraph for the drawing up of a protest for non-acceptance.

1. cceptance dispenses with presentment for payment and protest for

non-payment.

1. If ther e is a stoppage of payment on the part of the drawee, whether he has accepted or not , or if execution has been levied against his assets without  result ,  the holder cannot exercise  his right of recourse until after presentment of the bill to the drawee for payment and after the protest has been drawn up.

1. ee, whether he has accepted  or not , is declared bankrupt  (faillite declaree) , or in the event of the declared bankruptcy of the drawer of  a non-acceptable bill , the produ ction of  the jud gment  declaring the  bankruptcy  suffices to  enable the holder  to  exercise  his right  of

recourse.

1. ated by law he shall be designated by the National Bank of Cambodia. A protest must contain a copy of the bill of exchange, or the original bill of exchange may be annexed thereto, and specify the person at whose request the bill of exchange is protested, the place and date of the protest , the cause or reason for protesting the bill of exchange, the demand made and the answer given, if any , or the fact that the drawee or acceptor cannot be found. It shall be made at the place of the refusal to pay or accept or at some other place in Cambodia situated within 10 kilometers of the place of presentment and refusal to pay or accept.

Article  105.

1. The holder must give notice of non-acceptance or non-payment to his endorser, to the drawer and to any avaliseur of the acceptor within the four business  days which follow the day for protest or, in case of a stipulation "retour sans frais," "retour sans protet , " or any other equivalent expression, the day for presentment. Every endorser must , within the two business days following the day on which he receives notice, notify his endorser of the noti ce he has r eceived, mentionin g the names and addr esses of those who have given the pr evious n otices, and so on through the series until the drawer is reached. The periods mentioned above run from the r eceipt of the pr eceding n otice.

1. en , in conformity with the pr eceding paragraph , n otice is given to a per son who has sign ed a bill of exchange, the same notice must be given within the same limit of time to his avaliseur.

1. ere an endorser either has not specified his address or has specified it in an illegible manner , it is suffi cient that notice should be given t o the preceding endor ser .

1. per son who must give not ice, may give it in any form whatever , even by simply r eturnin g the bill of exchange.

1. e must prove that he has given notice within the time allowed. This time­ limit shall be regar ded as having been observed if  a letter giving the notice has been posted within the pr escribed time.

1. erson who does not give notice within the limit of time mentioned above does not forfeit his rights. He is r esponsible for the injury, if any, caused by his negligence, but the damages shall not exceed the amount of the bill of exchange.

Article  106.

1. he drawer, an endorser , or a person guaranteeing payment by aval (avaliseur) may , by the stipulation "retour sans frais," "retour sans prot et ," or any other equivalent expression written on the instrument and signed, release the holder from having a protest of non -acceptance or non-payment drawn up in order to exercise his right of r ecourse.

1. his stipulation does not release the holder from presenting the bill within the prescribed time, or from the notices he has to give. The burden of proving the non­ observance of the limits of time lies on the person who seeks to set it up against the holder.

1. the stipulation is written by the drawer , it is operative in r espect of all per sons

who have signed the bill; if it is written by an endorser or an avaliseur, it is operative only in respect of such endorser or avaliseur. If, in spite of the stipulation written by the drawer , the holder has the protest drawn up, he must bear the expenses thereof. When the stipulation emanates from an endorser or avaliseur, the costs of the protest, if one is drawn up, may be recovered from all the persons who have signed the bill.

Article  107.

1. All drawers,  acceptors, endorsers  or  guarantors by aval of a bill  of exchange are jointly  and severally liable to the holder.

1. The holder has theright of proceeding against allthese persons individually orcollectivelywithoutbeingrequiredtoobservetheorderinwhichtheyhavebecomebound.

1. and paid it

Article 108.

• e amount  of the unaccepted  or  unpaid  bill  of  exchange with  interest ,

if inter est has been  stipulated for ;

• erest at a r at e determin ed by the Nation al Bank of  Cambodia from the date of maturity;

• he expenses of protest and of the notices given as well as other expenses.

2. If the right of recourse is exercised before maturity, the amount of the bill shall be subject to a discount. This discount shall be calculated according to the official rate of discount (bank-rate) ruling on the date when recourse is exercised at the place of domicile of the holder.

Article 109. A party who takes up and pays a bill of exchange can recover from the parties liable to him:

1. The entir e sum which he has paid ;

1. er est on the said sum calculated at a rate determined by the N ational Bank of Cambodia, starting from the day when he made payment ;

1. ny expenses which he has incurr ed.

Article  110.

1. Every party liable against whom a r ight of r ecourse is or may be exercised can requir e against payment that the bill shall be given up to him with the protest and a receipted account.

2. Every endor ser who has taken up and paid a bill of exchange may cancel his own

endorsement and those of subsequent endorsers.

Article 111. In the case of the exercise of the right of recourse after a partial acceptance, the party who pays the sum in respect of which the bill has not been accepted can require that this payment shall be specified on the bill and that he shall be given a receipt therefore. The holder must also give him a certified copy of the bill, together with the protest, in order to enable subsequent recourse to be exercised.

Article  112.

1. Every person having the right of recourse may, in the absence of agreement to the contrary, reimburse himself by means of a fresh bill (redraft) to be drawn at sight on one of the parties liable to him and payable at the domicile of that party.

1. the redraft is drawn by the holder, the sum payable is fixed according to the rate for a sight bill drawn at the place where the original bill was payable upon the party liable at the place of his domicile. If the redraft is drawn by an endorser, the sum payable is fixed according to the rate for a sight bill drawn at the place where the drawer of the redraft is domiciled upon the place of domicile of the party liable.

Article  113.

1. holder loses his rights of recourse against the endorsers, against the drawer and against the other parti es liable, with the exception of the acceptor, after the expiration  of the limits of time fixed:

• the presentment of a bill of exchange drawn at sight or at a fixed period

after sight;

• est for non -acceptance or non -payment;

• For presentment  for payment  in the case of  a stipulation  "retour  sans

frais," "r etour sans protet ," or any other equivalent expression.

1. of presentment for acceptance within the limit of time stipulated by the drawer , the holder loses his right of recourse for non-payment , as well as for non­ acceptance , unless it appears from the terms of the stipulation  that  the  drawer  only meant to release himself from the guarantee of acceptance.

1. the stipulation for a limit of time for presentment is contained in an endorsement, the endorser alone can avail himself of it.

1. who has lost his right of recourse under this Article may sue the drawer under the Law of contract and ordinary assignment, in an action governed by the Law of contract and assignment. Any recovery under this paragraph is reduced by damages for any injury caused to the drawer by the holder's  failure to meet  required limits of time.

Article  114.

1. the presentment of the bill of exchange or the drawing up of the protest within the prescribed limits of time be prevented by an insurmount able obstacle (vis major), these limits of time shall be extended.

1. The hold er is bound to give notice without delay of the case of vis major to his

endorser and to specify this notice,  which he must  date and sign ,  on the bill  or  on an allonge; in other respects the provisions of Article  105 shall apply.

1. exercised, and neither presentment nor the drawing up of a protest shall be necessary.

1. , the time-limit of thirty days shall run from the date on which the holder, even before the expiration of the time for presentment, has given notice of vis major to his endorser. In the case of bills of exchange drawn at a certain time after sight, the above time -limit of thirty days shall be added to the period after sight specified in the bill of exchange.

1. only against security provided by the party enforcing the bill of exchange, which to the satisfaction of the court , indemnifies the party liable on it against any claim of any other person on the bill of exchange if it reaches a holder who acquires it otherwise than in bad faith or gross negligence.

SECTION  8-INTERVENTION   FOR  HONOR

Article 115 .

1. The drawer , an endorser , or a person giving an aval may specify a per son who is to accept or pay in case of n eed.

1. of exchange may , subj ect as hereinafter mention ed, be accepted or paid by a person who intervenes for the honor of any debtor against whom a right of recour se exists.

1. he person intervening may be a third party, even the drawee, or, save the acceptor , a party already liable on the bill of exchange.

1. e person intervening is bound to give, within two business days, noti ce of his intervention to the party for whose honor he has intervened. In default , he is responsible for the injury, if any , due to his negligence, but the damages shall not exceed the amount of the bill of exchan ge.

Article  116.

1. here may be acceptance by intervention in all cases where the holder  has a

right of r ecourse before maturity on a bill which has not yet been accepted.

1. en the bill of exchange indicates a per son who is design ated to accept or pay it as a referee in case of need at the place of payment , the holder may not exer cise his rights of recourse before maturity against the person n amin g such  r eferee  and against subsequent signator ies , unless he has presented the bill of exchange to the referee and until , if acceptance is refused by the latter , this refu sal has been authenti cated by a prot est .

1. intervention. Nevertheless , if he allows it, he loses his right of recourse before maturity against the person on whose behalf such acceptance was given and against subsequent signatories.

Article 117. Acceptance by intervention is specified on the bill of exchange. It is signed by the person intervening. It mentions the person for whose honor it has been given and , in default of such mention, the acceptance is deemed to have been given for the honor of the drawer.

Article  118.

1. The acceptor by intervention is liable to the holder and to the endorsers, subsequent to the party for whose honor he intervened, in the same manner as such party.

2. Notwithstanding an acceptance by intervention,  the party  for whose  honor  it has been given and the parties liable to him may require the holder, in exchange for payment of the sum mentioned in Article 108, to deliver the bill, the protest, and a receipted account, if any.

Article  119.

1. Pay ment by intervention may take pl ace in all cases where, either at maturity or before maturity, the holder has a r ight of recourse on the bill.

1. ayment must include the whole amount payable by the party for whose honor it is made.

1. st be made at the latest on  the day following the last day allowed for drawing up the protest for n on -payment.

Article 120.

1. If a bill of exchange has been accepted by persons intervening who are domiciled in the place of payment , or if persons domiciled there have been named as refer ees in case of n eed , the holder mu st present  the bill to all these persons and , if necessary , have a protest for n on-payment drawn up at the latest on the day following the last day allowed for drawing up the protest.

2. In default of protest within this limit of time, the party who has n amed t he referee in case of need , or for whose account the bill has  been accepted, and the subsequent endor ser s, are discharged.

Article  121. The holder who refuses payment by intervention loses his right of r ecourse against any persons who would have been discharged thereby .

Article  122.

1. Pay ment by intervention must be authenticated by a receipt given on t he bill of exchange mentioning the per son for whose honor pay ment has been made. In default of such mention, payment is deemed to have been made for the honor of the drawer.

2 . The bill  of  exchan ge  an d the prot est ,  if  any ,  must  be  given  up  to  the per son

pay ing by intervention.

Article  123.

1. The person paying by intervention acquires the rights arising out of the bill of exchange against the party for whose honor he has paid and against persons who are liable to the latter on the bill of exchange. Nevertheless, he cannot re-endorse the bill of exchange.

1. discharged.

1. intervention, the payment which affects the greater number of releases has the preference. Any person, who with knowledge of the facts, intervenes in a manner contrary to this rule, loses his right of recourse against those who would have been discharged.

SECTION 9- PARTS OF A SET AND COPIES

Article  124.

1. Where a bill is drawn in a set of two or more identical parts, with each part of the set being numbered and containing a reference to the other parts, the whole of the parts constitute one bill.

1. any part, but to be liable on the whole bill and not on any separate part , each such acceptance or endorsement must be written on one part only.

1. drawer who signed each part is nevertheless liable on the whole bill and

not on each part.

1. party who has sent one part for acceptance must indicate on the other parts the name of the person in whose hands this part is to be found. That person is bound to surrender it to the lawful holder of another part. If he refuses , the holder cannot exercise his right of recourse until he has had a protest drawn up specifying:

• sent for acceptance has not been given up to him on his demand;

• or payment could not be obtained on another of the parts.

Article  125.

1. of a set endorses two or more parts to different persons:

• on every such part, and every endorser subsequent to him is liable on the part he has himself endorsed as if the parts were separate bills.

• of a part whose title first accrues is  entitled  to recover payment received by any person paid by the drawer or the drawee who has not accepted the bill.

2. Where the drawee accepts more than one part and such accepted parts get into the hands of different lawful holders, he is liable on every such part as if it were a separate bill.

Article  126.

1. When the acceptor of a bill drawn in a set pay s it without r equiring the part bearing his acceptance to be delivered up to him, and that part at maturity is outstandin g

in the hands of a lawful holder, he is liable to the holder thereof.

1. drawn in a set is discharged by payment or otherwise, the whole bill is discharged.

Article 127.

1. It must specify where the copy ends.

Article 128.

1. latter is bound to hand over the said instrument to the lawful holder of the copy.

1. he refuses, the holder may not exercise his right of recourse against the persons who have endor sed the copy or guar anteed it by aval until he has had a protest drawn up specifying that the original has not been given up to him on his demand.

1. ere the original instrument , after the last endor sement before the making of the copy contains a clau se "commen cing from here an endor sement is only  valid if made on the copy " or some equivalent formula, a subsequent endor sement on the original is null and void.

SECTION tO-ALTERATIONS

Article 129. In case of alteration of the text of a bill of exchan ge, parties who have signed subsequent to the alteration ar e bound according to the terms of the alter ed text; parties who have signed before the alteration are bound according to the terms of the original text.

SECTION 11-LIMITATION OF ACTIONS OF RECOURSE

Article 130.

1. ll action s of recourse arising out of a bill of exchange against the acceptor are

barred after thr ee year s, r eckoned from the date of maturity .

1. ctions of recourse by the holder against the endor sers and against the drawer are barred after one year from the date of a prot est drawn up within proper time, or from the dat e of maturity wher e there is a stipulation "retour sans frais," "r etour san s prot et ," or any other equivalent expression.

1. ctions of recourse by endorsers against each other and against the drawer are barred after six months, reckoned from the day when the endor ser took up and paid the bill or from the day when he himself was su ed .

Article  131. Interruption of the period of limitation is only effective against the person

in respect of whom the period has been interrupted.

SECTION 12-TIME CALCULATIONS

Article  132.

1. Payment of a bill of exchange which falls due on a legal holiday Qour ferie legal) cannot be demanded until the next business day. So too, all other  proceedings relating to a bill of exchange, in particular presentment for acceptance and protest, can only be taken on a business day.

2. Where any of these proceedings must be taken within a certain  limit of time the last day of which is a legal holiday Qour ferie legal), the limit of time is extended until the first business day which follows the expiration of that time. Intermediate holidays  Qours feries) are included in computing limits of time.

Article  133. Legal or contractual limits of time do not include the day on which the period commences.

Article 134. No days of grace, whether legal or judicial,  are permitted.

CHAPTER IV-PROMISSORY NOTES

SECTION 1- ISSUE AND FORM OF A PROMISSORY NOTE

Article 135. A promissory note is an unconditional promis e in writing made by one person to another signed by the maker , undertakin g to pay , a determinate sum of money to , or to the order of, a specified person or to bearer. It must be payable at a maturity and conform to all requirements as provided by this Chapter.

Article 136. A promissory note is a credit instrum ent. It may be written in Khmer or any other language and must contain:

The term "promissory note" inserted in the body of the instrum ent and expressed in the language employed  in drawing up the instrument ;

An unconditional  promis e to pay a determinate sum of money;

A statement of the time of payment;

A statement of the pla ce where payment is to be made;

The name of the person to whom or to whose order payment is to be made;

A statement of the date and of the place where the promissory  note is issued;

The signature of the person who makes the promise on the instrument (maker).

Article 137. An instrument in which any of the requirements mention ed in the preceding article are wanting is invalid as a promissory note except in the case specified in the following paragraphs:

1. A promissory note in which the time of payment is not specified is deemed to

be payable at sight.

Article 138. A promissory note may be payable at a place other than the  maker 's domicile, including at the domicile of a third person either in the  locality  where  the maker has his domicile or in another locality.

Article  139.

1. When a promissory note is payable at sight, or at a fixed period after sight , the maker may stipulate that the sum payable shall bear interest. In the case of any other promissory note, this stipulation is deemed not to be written  (non ecrite).

1. , the stipulation shall be deemed not to be written (non ecrite).

1. er est run s from the date of the promi ssory note , unless some other date is specified.

Article  140.

1. When the sum payable by a promi ssory note is expr essed in words and also in figur es, and there is a discrepancy between the two, the sum den oted by the words is the amount  payable.

2. Where the sum payabl e by  a promi ssory n ote is expressed mor e than on ce in words or more than once in figures, and there is a discrepan cy, the smaller sum is the sum payabl e .

Article 141. If a promissory note bears signatur es of persons incapable of bindin g themselves by a promi ssory note, or forged signatures, or signatur es of fictitious persons, or signatur es which for any other reason cann ot bind the persons who sign ed t he promissory note or on whose behalf it was signed, the obligations of the other persons who signed it are nonetheless valid.

Article 142 . Whosoever puts  his  signatur e  on  a  promissory  note  as  representing  a per son for whom he had no power to act is bound himself as a party to the promi ssory note and , if he pays, has the same rights as the per son for whom he purport ed to act. The same rul e applies to a representative who has exceeded his powers.

Article 143. If a promi ssory note, whi ch was incomplete when issu ed , has been completed otherwise than in accordance with the agreements entered into, the non ­ observance of such agreements may not be set up against the holder unless he has acquired the promissory not in bad faith or, in acquiring it , has been guilty of  gross negligence .

SECTION 2- ENDORSEMENT

Article  144.

1.  A promissory note made payable to a specified person, with or without the express clause "to order", may be transferred by means of endorsement.

1. person the words "not to order" or an equivalent expression, the instrument can only be transferred according to the form, and with the effects of an ordinary assignment.

Article  145.

1. An endorsement must be unconditional. Any condition to which it is made subject is deemed not to be written (non ecrite).

1. endorsement  "to bearer" is equivalent to an endorsement in blank.

Article 146.

1. An endorsement must be written on the back of the promissory note or on a slip affixed thereto  (allonge). It must be signed by the endor ser.

2. The endorsement may leave the beneficiary unspecifi ed or may consist simply of the signature of the endorser  (endorsement in blank).

Article 147.

1. An endorsement transfers all the rights arising out of a promissory note.

1. the endorsement is in blank, the holder may:

• up the blank either with his own name or with the name of some other

person;

• e-endorse the promissory not e in blank , or to some other person;

• Transfer the  promissory  note to a third  person  without  filling up the blank , and without endorsing it.

Article  148.

1. absence of any contrary stipulation , the endorser guarantees payment.

1. e may prohibit any further endorsement ; in this case, he gives no guarantee

to the persons to whom the promissory  note is subsequently endors ed.

1. endorsement on a promissory note to bearer renders the endorser liable in accor dance with the provisions governing the right of recourse; however, it does not convert the instrument into a promissory note to order.

1. is followed by another endorsement, the person who signed this last endorsement  is deemed to have acquired the promissory  note by the endorsement in blank.

Article  150.

1. founded on their personal relations with the maker or with  previous  holders,  unless  the holder, in acquiring the promissory note, has knowingly acted to the detriment of the debtor.

1. in which the words "not to order" or any other equivalent expression have been inserted.

Article  151.

1. When an endorsement contains the statements "value in collection" ("valeur en recouvrement ") ,  "for  collection"  ("pour  encaissemet") ,  "by  procuration "  ("par  procuration ") or any other phrase  implying  a simple mandate , the holder  may  exercise  all rights  arising out of the promissory  note, but  he can only endorse it in his capacity  as agent.

1. s case, the parties liable can only set up against the holder defenses which could be set up against the endorser.

1. e mandate contained in  an endorsement  by  procuration  does not t erminate by reason of the death of the party giving the mandate or by reason of his becoming legally  incapable.

1. a promissory note to a banker for collection is a payment order governed by Chapter V of this Law. In case of an inconsistency with respect to promissory notes betw een a provision of Chapter V of this Law and a provision of this Chapter, this Chapter prevails.

Article  152.

1. When an endorsement contains the statements "value in security " ("valeur en garantie"), "value in pl edge " ("valeur en gage ") , or any other  statement  implying  a pledge , the holder may exercise the rights arising  out of the promissory note , but an endorsement by him has the effects only of an endorsement by an agent.

2. The parties liable cannot  set up against the holder defen ses founded on their personal relations with the endorser, unless the holder, in receiving the promissory note, has knowin gly acted to the detriment of the debtor.

1. protest or after an equivalent declaration or after the expiration of the limit of time for presentment

• only as an ordinary assignment; and

• rights under Articles  149 and  150.

2. Failing proof to the contrary, an undated endorsement is deemed to have been placed on the promissory note prior to the protest or equivalent declaration or prior to the expiration of the limit of time referred to in the preceding paragraph.

SECTION 3- LIABILITY OF MAKER OF PROMISSORY NOTE

Article  154.

1. By making it, the maker undertakes to pay the promissory note at its maturity.

2. In default of payment, the holder has a direct action on the promissory note against the maker for all that can be demanded in accordance with Articles 175 and 176.

Article  155.

1. A promissory  note payable at a fixed period  after sight must be presented  for

visa within one year of its date.

1. maker may abridge or extend this period.

1. abr idged by the endorses .

Article 156.

1. A visa is written on the promissory note. It is expressed by the word  "visa" or any other equivalent term. It is signed by the maker.

1. visa must be dated as of the day when the visa is given, unless the holder requires that it shall be dated as of the day of presentment. If it is undat ed , the holder, in order to preserve his right of recourse against the endorsers and the maker, must authenticate the omission by a protest drawn up within the proper time.

1. after sight at which the promissory note is payable runs from the date of the visa signed by the maker on the note. The refusal of the maker to give his visa with the date thereon must be authenticat ed by a protest, the date of which marks the commencement  of the period of time after sight.

SECTION 4- "AVALS"

Article 157.

1. Payment of a promissory note may be guaranteed by an "aval" as to the whole or part of its amount.

2. This guar antee may be given by a third person or even by a person who has signed as a party to the promissor y note.

1. " may be given either on the promissory note itself or on an  "allonge".

1. , except in the case of the signature of the maker.

Article 159.

1. The giver of an "aval " is bound in the same manner as the person for whom he has become guarantor.

1. inoperative for any reason other than defect of form.

1. , when he pays a promissory note, the rights arising out of the promissory note against the person guaranteed and against those who are liable to the latter on the promissory  note.

SECTION 5- MATURITY

Article 160.

1. promissory note may be made payable:

• sight;

• a fixed period after sight;

• t a fixed period after date; or

• At a fixed date.

1. omissory note may be made payable by stated installments, each at a fixed date, with a provision that in default in  payment of  any installment the entir e unp aid balan ce shall become due.

1. romissory n ot es at other maturities are null and void. Article  161.

1. promi ssory note at sight is payable on presentment. It mu st be presented for pay ment within a year of its date of issu e . The maker may abridge or extend this period. These periods may be abridged by the endorsers.

1. e maker may pr escribe that a promi ssory note payable at sight must n ot be pr esented for  payment before a named  date . In this case,  the period for  presentment begins from the said date .

Article  162.

1.  The maturity of a promissory note payable at a fixed period after sight is determined either by the date of the visa or by the date of the protest.

2.   In the absence of the protest, an undated visa is deemed, so far as regards the maker, to have been given on the last day of the limit of time for presentment for visa.

Article  163.

1. Where a promissory note is made payable at one or more months after date or after sight, the promissory note matures on the corresponding date of the month when payment must be made. If there be no corresponding date, the promissory note matures on the last day of this month.

1. the maturity is fixed at the commencement, in the middle, or at the end of the month, the first, fifteenth or last day of the month is to be understood.

1. expression "half month" means a period of fifteen days.

Article  164.

When a promissory note is payable on a fixed day or at a fixed period after date in a place where the  calendar is different from the calendar in the place of issue , unless a stipulation in the promissory note or even the simple terms of the instrument indicate an intention to adopt some different rule , the day of maturity is deemed to be fixed according to the calendar of the place of payment.

SECTION 6- PAYMENT

Article  165.

1. The holder of a promissory note payable on a fixed day or at a fixed period after date or after sight must present the promissory note for payment either on the day on which it is payable of no one of the two business days which follow.

2. The presentment of a promissory note either at or through a clearing-house , or electronically , as provided by agreement or regulations issued by the National Bank of Cambodia, is an effective presentment for payment.

Article  166.

1. The maker who pays a promissory note may require that it shall be given up to him receipted by the holder.

1. case of partial payment the maker may r equir e that the parti al payment shall be mentioned on the promi ssory note and that a r eceipt shall be given to him.

Article 167. When a promissory note is not presented for payment within the limit of time fixed by Article 165, every debtor is authorized to  deposit the amount  with the competent authority , as designated by the National Bank of Cambodia, at the charge, risk and peril of the holder.

Article  168.

1. The holder of a promissory note cannot be compelled to receive payment thereof before maturity.

1. ries of endorsements, but not the signature of the endorsers.

Article  169.

1. When a promissory note is made payable in a currency which is not that of the place of payment, the sum payable may be paid in the currency of the country, according to its value on the  date of maturity. If the debtor is in default, the holder may at his option demand that the amount of the promissory note be paid in the currency of the country according to the rate on the day of maturity or the day of payment.

1. e u sage of the place of pay ment determin es the value of foreign curr ency . N evertheless, the maker may stipulate that the sum payable shall be calculated according to a rate expressed in t he promissory note.

1. e foregoing rules shall not apply to a promi ssory note (i) made payable in a curr ency which is widely accepted in Cambodia,  or  (ii)  in  which  the  maker  has stipul ated that payment must be made in a certain specified foreign curr ency . In each such case the promissory note shall be paid in the stated curr ency .

1. the amount of the promi ssory note is specified in a curr ency having the same denomination , but a differ ent value in the country of payment and the country of issue or any other country, unl ess  indicated otherwise, refer ence in the promissory note is deemed to be made to the currency of the countr y of payment where the currency of the country of payment does not have the same denomination , to a currency whi ch is widely accepted in the pl ace of pay ment.

1. ere a promissory note is payable at the domicile of a banker the design ation of an account to be debited with the amount payable is deemed t o be an authorization t o pay in the curr ency of the account.

SECTION 7- RECOURSE FOR NON-PAYMENT

Article 170. The holder may exercise his right of recour se against the endorser s, the maker and the other parties liable :

1.  at  maturity ,  if  payment  has not  been  made, or

2. even before maturity, in the event of the bankrupt cy (faillite) of the maker or in the event of a stoppage of  paym ent on  his part ,  even when  not declared by a ju dgment , or where execution has been levied against his assets without r esult;

Article  171.

1. non-payment).

1. there is a stoppage of payment on the part of the maker or if execution has been levied against his assets without result, the holder cannot exercise his right  of recourse until after presentment of the promissory note to the maker for payment and after the protest has been drawn up.

1. declaring the bankruptcy  suffices to enable the holder to exercise his right of recourse.

1. documents. As long as no such person has been designated by law he shall designed by the National Bank of Cambodia. A protest must contain a copy of the promissory note, or the original promissory note may be annexed thereto, and specify the person at whose request the promissory note is protested , the place and date of the protest, the cause or reason for protesting the promissory note , the demand made and the answer given, if any , or the fact that the maker cannot be found. It shall be made at of the place of refu sal to pay or at some other place in Cambodia situated within 10 kilometers of the place of presentm ent and refusal to pay.

1. be constituted by the signed written maker's declaration

specifying the information  set out in previous paragraph.

Article 172 .

1. The holder must give notice of non -payment to his endorser and to any avaliseur of the maker within the four busin ess days which follow the day for protest or, in case of a stipulation "retour sans frais," "retour sans prot et," or any other equivalent expression, the day for presentment. Every endorser must, within the two business days following the day on which he receives notice , notify his endorser of the notice he has received, mentioning the names and addresses of those who have  given  the  previous notices , and so on through the series until the maker is reached. The periods mentioned above run from the receipt  of the preceding notice.

1. conformity with the preceding paragraph, notice is given to a person who has signed a promissory note , the same notice must be given within the same limit of time to his avaliseur.

1. an endorser either has not specified his address or has specified it in an

illegible manner , it is sufficient that notice should be given to the preceding endorser.

1. must give notice , may give it in any form whatever , even by

simply r eturning the promissory  note.

1. e mu st prove that he has given notice within the time allowed. This time­ limit  shall be regarded  as having been  observed  if  a letter  giving the noti ce has been

posted within the prescribed time.

6. A person who does not give notice within the limit of time mentioned above is responsible for the injury, if any, caused by his negligence, but the damages shall not exceed the amount of the promissory note.

Article  173.

1. An endorser, or a person guaranteeing payment by aval (avaliseur) may, by the stipulation "retour sans frais," "retour sans protet , " or any other  equivalent  expression written on the instrument and signed, release the holder from having  a protest  of non payment drawn up in order to exercise his right of recourse.

1. note within the prescribed time , or from the notices he has to give. The burden of proving the non observance of the limits of time lies on the person who seeks to set it up against the holder.

1. A stipulationwrittenbyanendorseror anavaliseur,isoperativeonlyinrespectofsuchendorseroravaliseur.If, in spite of the stipulation the holder has the protest drawn up, the costs of the protest may be recovered from all the persons who have signed the promissory note.

Article 174.

1. All akers, endor sers or guarantor s by aval of a promissory note are jointl y and severally liable to the hold er.

1. he holder has the right of proceeding against all these per sons  individually or

collectively without being required to observe the order in which they have become bound.

1. he same right is possessed by any person signing the promi ssory note who has taken it up and paid it.

1. ceedings against one of the parties liable do not prevent proceedings against the others, even though they may be subsequent to the party first proceeded against.

Article 175.

1. he holder may recover from the person against whom he exercises his right of recourse:

• e amount of the unpaid promi ssory n ote with inter est , if interest has been sti pulated for ;

• er est at a r at e determin ed by the Nation al Bank of Cambodia  from the date of maturity .

• he expenses of protest and of the notices given as well as other expenses.

1. the right of r ecour se is exercised before maturity,  the  amount  of  the promi ssory note shall be subject to a discount. This discount shall be calculated according to the official r ate of discount (bank rate) rulin g on the date when recour se is exerci sed at the place of domicile of the holder.

Article 176. A party who takes up and pays a promissory note can recover from the parties liable to him:

1. The entire sum which he has paid;

1. on the said sum calculated at a rate determined by the National Bank of Cambodia, starting from the day when he made payment;

Article  177.

1. Every party liable against whom a right of recourse is or may be exercised can require against payment that the promissory note shall be given up to him with the protest and a receipted account.

2. Every endorser who has taken up and paid a promissory note may cancel his own endorsement and those of subsequent endorsers.

Article  178.

1. Every person  having the right of recourse may, in the absence of agreement to the contrary, reimburse himself by means of a bill  of exchange to be drawn at sight on one of the parties liable to him and payable at the domicile of that party.

1. includes , in addition to the sums mentioned in Articles 175 and 176, brokerage and the cost of stamping the bill of exchange.

1. bill of exchange  is drawn by the holder , the sum payable  is fixed  according  to the rate for a  sight bill at the  place  where  the original  promissory   note  was  payable   at the place of his domicile. If the bill  of  exchange  is  drawn  by  an  endorser ,  the  sum  payable  is fixed according to the rate-for a sight bill drawn at the place where the drawer of the bill of exchange  is domiciled  upon  the place  of  domicile of the  party  liable.

Article 179.

1. e holder loses his rights of recourse against the endorsers and against the other parties liable with the exception of the maker , after the expiration of the limits of time fixed:

• the presentment of a promissory note payable at sight or at a fixed period after sight.

• e protest for non-payment.

• esentment for payment in the case of a stipulation  "retour sans frais, " "retour sans protei, " or any other equivalent expression ,

1. the stipulation for a limit of time for presentment is contained in an endorsement , the endorser alone can avail himself of it.

Article  180.

1. hould the presentment of the promis sory note or the drawing up of the protest within the prescribed limits of time be prevented by an insurmount able obstacl e (vis major) , these limits of time shall be extended.

1. vis major continues to operate beyond thirty days after maturity, recourse may be exercised, and neither presentment nor the drawing up of a protest shall be necessary.

1. -limit of thirty days shall run from the date on which the holder, even before the expiration of the time for presentment, has given notice of vis major to his endorser. In the case of promissory notes payable at a certain time after sight, the above time-limit of thirty days shall be added to the period after sight specified in the promissory  note.

1. erson on the promissory note if it reaches a hold er who acquires it otherwise than in bad faith or gross negligence.

SECTION 8- INTERVENTION FOR HONOR

Article  181.

1. The maker , an endorser, or a person giving an aval may specify a person who is to pay in case of need.

1. note may, subject as hereinaft er mentioned, be paid by a person who intervenes for the honor of any debtor against whom a right of r ecourse exists.

1. person intervening may be a third party already liable on the promissory note.

1. e person interv ening is bound to give, within two business days, notice of his intervention to the party for whose honor he has  intervened. In default,  he is responsible for the injury , if any, due to his negli gence , but the damages shall not exceed the amount of the promissory note.

Article  182.

1. Payment by intervention may take place in all cases where, either at maturity or before maturity , the holder has a right of recourse on the promissory note.

1. st include the whole amount payable by the party for whose honor it is made.

1. e made at the latest on the day following the last day allowed for drawing up the protest for non -payment.

Article  183.

1. If persons domiciled in the place of payment have been named as referees in case of need, the holder must present the promissory note to all these persons and, if necessary, have a protest for non-payment drawn up at the latest on the day following the last day allowed for drawing up the protest.

2. In default of protest within this limit of time, the party who has named the referee in case of need, and the subsequent endorsers, are discharged.

Article  184. The holder  who refuses  payment  by intervention  loses his right of recourse against any persons who would have been discharged thereby.

Article  185.

1. Payment by intervention must be authenticated  by  a  receipt  given  on  the promissory note mentioning the person  for whose honor  payment has been made. In default of such mention, payment is deemed to have been made for the honor of the maker.

2.   The promissory note and the protest, if any, must be given up to the person paying by intervention.

Article  186.

1. The person paying by intervention acquires the rights ansmg out of the promissory note against the party for whose honor he has paid and against persons who are liable to the latter on the promissory note. Nevertheless, he cannot re-endors e the promissory  note.

1. s subsequent to the party for whose honor payment has been made

are dischar ged.

1. case of competition for payment by intervention, the payment which affects the greater number of r eleases has the preference. Any person, who with knowl edge of the facts, intervenes in a manner contrary to this rule , loses his right of recourse against those who would have been dischar ged.

SECTION 9- COPIES

Article 187

1. Every holder of a promissory note has the right to make copies of it.

1. A copy  must  reproduc e the  original  exactly,  with  the  endorsements  and  all

other statements to be found therein. It must specify where the copy ends.

1. endorsed  and  guaranteed  by aval in the same manner  and with the

same effects as the original.

Article 188.

1.    A copy mu st specify the person in possession of the original instrument. The

latter is bound to hand over the said instrument to the lawful holder of the copy.

1. If he r efuses, the hold er may not exercise hi s right of r ecourse  against the

persons who have endorsed the copy or guaranteed it by aval until he has had a protest drawn up specifying that the original has not been given up to him on his demand.

1. al instrument, after the last endorsement before  the  making of the copy contains a clause "commencing from here an endorsement is only valid if made on the copy" or some equivalent formula, a subsequent endorsement on the original is null and void.

SECTION  10-ALTERATIONS

Article 189. In case of alteration of the text of a promissory note,  parties  who  have singed subsequent to the alteration  are bound according to the terms of the altered text: parties who have signed before the alteration are bound according to the terms of term original  text.

SECTION 11- LIMITATION OF ACTIONS OF RECOURSE

Article 190.

1. ctions of r ecourse by the holder against the endors ers are barr ed after one year from the date of a protest drawn up within proper time, or from the date of maturity where there is a stipulation "r etour sans frais," "retour sans protet ," or any other equivalent expr ession.

1. tions of recour se by endor sers against each other are barred after  six months, reckoned from the day when the endorser took up and paid the promi ssory note or from the day when he himself was sued.

Article 191. Interruption of the period of limitation is only effective against the person in respect of whom the period has been interrupted.

SECTION 12- TIME CALCULATIONS

Article 192.

1. ment of a promissory n ote which falls due on a legal holiday Qour ferie legal) cannot be demand ed until the n ext business day. So too , all  other proceedings relating to a promissory note, in par ticular presentment for payment and protest , can only be taken on a business day .

1. ere any of these proceedings must be taken within a certain limit of time, the last day of which is a legal holid ay Qour ferie) , the limit of time is ext ended until the first business day which follows  the expiration of that time. Intermediate holidays Qours feries) are includ ed in computin g limits of t ime .

Article 193.Legal or contr actual limits of time do not includ e the day on which the period commences .

Article 194. No days of grace, whether legal or ju dicial, are permitt ed.

CHAPTER V –PAYMENT TRANSACTIONS SECTION 1- GENERAL PROVISIONS

Article 195. This Chapter governs payment transactions in any currency. It applies to

participants'  rights  and obligations  and to the  organization,  operation,  supervision  and oversight of payment systems in the Kingdom of Cambodia.

Article  196.

1. Individuals or legal  entities may open accounts in domestic and any foreign currency and may conduct payment transactions through these accounts under conditions as agreed subject to the provisions of Section 7 of this Chapter. An individual or legal entity may have more than one account and in more than one bank.

2. Paragraph 1 of this Article does not supersede, and is subject to, any legal requirement relating to  the use of the domestic currency, as well as to  any restriction or limitation, imposed by law, relating to a specific type or class of accounts, or to foreign exchange.

Article  197.

1.  A payment order may be sent by a customer from either within or outside Cambodia and r eceived by a bank located either within or outside Cambodia.

1. received by a branch or separate office of a bank located in Cambodia is governed by this Chapter and in matter s not provided by it , by other laws applicable in Cambodia. This paragraph applies, whether the paym ent order is sent from within or outside Cambodia , and subject to an agreement to the contrar y betw een the sender and the receiving bank.

1. to an agreement to the contrary between the sender and the receiving bank, a payment order received by a branch or separate office of a bank located outside Cambodia is governed by the Law applicable in the place where that branch or separate office is located.

1. to their agreement to the contrary , right s and obligations between a bank and its customer in relation to the account and any incomin g or outgoing payment order are governed by the Law applicable in the place in which the branch or separate office of the bank where the account is maintain ed is located.

1. issue of when payment is made pur suant to a payment transaction by the payor to the payee is governed by the Law applicable in the place in which the branch or separate office of the destination bank is located.

1. be addressed to the National Bank of Cambodia and instruct payment out or into an account held at the National Bank of Cambodia in which case this Chapter applies to the National Bank of Cambodia as a bank.

1. e a receiving bank agrees to carry out an instruction which is not a payment order only because it is stated to be subject to a condition, the instruction is deemed to be a payment order. This Chapter applies to the payment transaction , but not to the duties (i) of a receiving bank to pass on the condition to the destination bank , and (ii) of the destination bank to perform the condition.

1. In a debit transfer a receiver may revoke the receiver's authority to the originator by advising the destination bank of the revocation of authority in writing, electronically, or, if so previously agreed in writing, orally. Advice shall be given before the completion of the payment transaction, and at a time and in a manner sufficient to afford the destination bank a reasonable opportunity to act on it. The destination bank shall reject each sender 's payment order to which the advice applies.

1. incapacity received by the destination bank has the same effect as the receiver's advice of revocation of authority under paragraph 1 of this Article.

• out a debit transfer;

iii .Who objects to the debit in writing within four days of learning of the debit to the customer 's account; shall be entitled to the reversal of the debit unless the destination bank has been provided with evidence of the authority given by the customer to the originator.

1. By authorizinga debit transfer the r eceiver guarantees payment to the

originator.

1. does not apply to the receiver 's authority given to the originator

by the issue of a check.

SECTION 2-PA YMENT ORDERS

Article  199.

1. A payment order is an instruction by the sender to the receiving bank and does not

operate as an assignment of funds in favor of any participant in the payment transaction.

1. may be given in writing, electronically , or, if so previously agreed in writing between the parties to a payment order , orally. If so previously agreed , and subject to the terms of the agreement, subsequent communications including cancellation orders may also be given orally.

1. payment order shall accurately  identify  the  receiver  and  destination  bank. Wher e a payment order  processed  in  an  automated  system  identifies  any  participant   in the payment transaction by name and number , a receiving bank need not confirm the consistency between the name and number and may carry out payment on the basis of the number alone. If any of its employees who handl e the payment order notices any inconsistency between the name and the number , the receiving bank shall reject the payment order.

1. National Bank of Cambodia may issue regulations providing for the conditions under which a payment order and any other communication, including a cancellation order, may be given orally.

1. In a credit transfer, unless agreed otherwise, a receiving bank is obliged to carry out the sender's payment order only where there is adequate cover in the sender's account.

1. a debit transfer, the originating bank  shall  carry  out  the  originator's payment order upon being presented to its satisfaction with proof as to the  authority given by the receiver, and obtaining the originator's indemnity. Unless otherwise agreed, the originating bank shall not be obliged to provide the originator with funds  or even provisional credit prior to the completion of the debit transfer.  If  the  originator's account is credited by the originating bank before the completion of the debit transfer, the credit is provisional, and the originator's account may be debited in the amount of the credit if the debit transfer is not completed as provided in Article 210 of this Law.

iii .Describes the receiver with reasonable certainty.

1. promptly advise the sender of its refusal or rejection.

1. otherwise agreed, and without prejudice to levying charges as agreed or customary, a receiving bank shall carry out a payment order in the amount instructed by the sender.

1. receiving bank shall carry out instructions contained in a payment order either on the banking day it received it or on its value date, if any – whichever is later. A receiving bank may establish a cut -off hour after which any payment order received is deemed to be received on the following banking day.

1. originating bank in a credit transfer and a destination bank in  a  debit transfer that has received in the course of a banking day more than  one payment order or other lawful instructions for the withdrawal of funds from an account, may process them in any sequence unless otherwise provided in any Law.

1. shall exercise ordinary care in handling payment orders. It shall exercise ordinary care in the interpretation of ambiguous payment orders, and provided it acts in good faith and without knowledge that its interpretation is contrary to the sender's intent, it may carry out a payment order according to its reasonable meaning.

1. a payment order and acting in a payment transaction, and notwithstanding any agreement to the contrary, a receiving bank shall comply with this Law and any applicable regulation or directive as well as other law. It shall act diligently and in good faith, comply with common banking standards , and assist participants to complete satisfactorily the payment transaction. Within limits prescribed by this or any other Law , it must maintain confidentiality and act in the best interest of its sender.

1. to any obligation of confidentiality under any applicable law, a receiving bank instructed to route a payment transaction through an intermediary bank or to a destination bank that it judges to be unreliable in the circumstances, shall promptly advise the sender of its concerns. Where the receiving bank is nevertheless instructed to route the transaction over its advice to the contrary , it may reject the payment order , or notwithstanding any other provision of this Law, execute it at the sender 's risk.

1. tructions  contained in the payment order.

1. 's payment order, at the request of the sender , the executing receiving bank may nevertheless issue to its own receiving bank its own cancellation order, which is governed by paragraph  1 of  this  Article.  A  cancellation order issued to the destination bank by its sender in the payment transaction is effective only it reaches the destination bank before the payment transaction  is completed.

1. curately identify the payment order  it  seeks  to cancel and may be given to the receiving bank in writing, electronically , or if so previously agreed in writing between the parties to a payment order, orally.

• t the close  of the fifth banking  day  or  any  agreed upon  shorter  period after the receipt  of  the payment  order  by  the receiving  bank ,  or value date, whichever is later ;

• ere t he r eceiving bank learns of the death or adjudication of the legal incapacity of the sender ; or

• ere t he receiving bank has been closed by the supervisory authoriti es.

1. o cancellation or withdrawal of a payment order is effective after the completion of the payment tr ansaction.

Article 202.

1. ttlement for interbank payment orders may take place:

• s' settlement accounts with the National Bank of Cambodi a, in which case it is governed by Regulation on the Operation of Settlement Accounts;

ii. By posting a debit or credit to an account , other than a settlement account , one bank has with the other or with a third  bank. Such debit or cr edit may be either for each payment order individually or for batches of payment orders in which case it may be at the end of a clearing cycle; or

iii .By any other mean s in which an obligation is satisfied.

1. . Te time for settlement und er par agraph 1 of this Articl e occurs as follows :

• er paragraph  1(i) , when settlement is compl eted und er Regulation on the Operation of Settlement Accounts issued by the N ational Bank of Cambodia ;

• nder paragraph 1 (ii), by means of a debit to an account , when the debit is posted to the account.

• n der par agraph 1(ii) , by means of a credit to an account , when the cr edit posted to the account is used , or if not u sed , at the opening of the n ext

banking day following the day on which the credit is available for use and the bank whose account has been credited, learns of that fact.

• determine when the obligation is satisfied.

1. otherwise govern circumstances under which settlement under paragraph 1 (ii) or (iii) of this Article may take place as well as modify the time of its occurrence.

•  receiving bank before the moment of opening of such insolvency proceedin g, their bilateral or multilateral netting , and  any  security provided to secure them.

1. purpos es of paragraph 5 of this Article and Article 227(2), "Insolvency proceedin gs" shall mean any collective  measure provided for  in the Law either  to liquidate , wind up , or re-organize a bank, whether voluntary or involuntary , and the moment of the opening of the insolvency proceedings shall be the moment when the relevant judicial or administrative authority handed down its decision.

SECTION  3– THIRD-PARTY  PROCESSORS

Article 203. In carrying out any part of a payment transaction, a bank may employ a third- party processor. As authorized by the bank , a third-party processor  may act on behalf of the authorizing bank as:

1. A communication facility;

1. g facility, which may further tr ansmit interbank  settlement

information to banks , including the bank in which settlement is completed;

1. agent for the bank of bank customers ' accounts; and/or

1. sending and receiving point for payment orders sent or received by the bank , which may be accessed directly by bank customers for sending and receiving paym ent orders.

Article 204.

1. A third -party processor shall comply with all r equirements , conditions and restriction s set by r egulations pr escribed by the Nation al Bank of Cambodia. Su ch regulations may  provid e  for  the  licen sing,  r egulation ,  and  supervision  of  third-party

processors , and may apply to all third-party processors or any category thereof. Different categories of third-party processors as specified by the National Bank of Cambodia may be subject to different requirements.

2.  A bank may act as a third-party processor on behalf of another bank. Article 205.

on the bank 's behalf.

Article 206.

1. -party processor shall reject a payment order sent directly to it by a bank customer unless:

• e case of a credit tr ansfer:

• he third-party processor acts for the bank as a managing or operating agent of the customer 's account and there is adequate cover in the customer 's account ; or

• he third-party processor has obtained authorization from the bank.

1. e customer 's payment order acted on by the third-par ty process or is deemed to be an instruction from the customer to the customer 's bank , executed by the bank 's corresponding payment order sent to the third-party processor for onwar d transmittal t o the receiving bank.

1. ere a bank authorized a third -party processor to act as a r eceiving point for pay ment orders sent to the bank, a payment order r eceived by the third-part y processor is deemed to have been received by that bank acting as the receiving bank.

SECTION 4– COMPLETION  OF CREDIT TRANSFER AND DISCHARGE

Article 2 07 .

1. credit transfer is completed when  the  destination bank  is paid. In  an  in­ hou se tr ansfer the bank is paid when it debits the originator's account with the amount of the payment order . In an interbank credit tr ansfer , the destination bank is paid when the interbank settlement that includ es the sending bank 's payment order is completed.

1. credit transfer is completed at the opening of the next bankin g day following the banking day the payment order was received by the destination bank, or its value date, whichever is later, if at that time there is adequate cover to the credit of the sender with the destination bank, and unless the destination bank rej ected the payment order not later than one hour thereafter .

1. iver has no pre-existing account with the destination bank, or where such account has been closed or blocked for incoming payments, the credit transfer is completed upon payment of the destination bank to the receiver.

Article  2 08.

1. Upon the completion of  a credit transfer, the destination bank becomes indebted to the receiver in the amount of the payment order it received, and subject to reasonable charges it may deduct, shall pay the receiver promptly.

1. receiver 's account not later than on the banking day following the completion of the credit transfer. Where such account does not exist or cannot be identified with reasonable certainty, or where so instructed, the destination bank is to advise the receiver promptly of the availability of funds in the destination bank 's hands and pay the receiver as instructed.

1. order received by the destination bank with adequate certainty so as to raise reasonable doubts as to the receiver's identification, the destination bank shall reject the payment order and advise its sender of its rejection.

1. prior to being paid , su ch payment or undertakin g shall be final and irrevocable and the credit transfer is deemed to have been compl et ed , except that each receiving bank may be owed by its sender. The destination bank 's und ertaking to pay may be given directly to the receiver or be under an interbank agreement.

Article 209 .

1. ere the credit tr ansfer has been made in payment of a debt owed by the originator to the receiver , unless otherwise agreed between them , the debt is discharged when the payment transaction is completed. Dischar ge is to the extent of the payment that completed the payment transaction.

1. scharge shall t ake place prior to completion of the payment tr ansaction if and as soon as a guarant ee of pay ment is either accepted by the r eceiver or , other than in circumstances govern ed by Articl e 20 7 (3),  confirm ed  to  the  receiver  by  the destin ation bank.

1. arantor or a destination bank guarant eeing or confirmin g payment under paragraph 2 thereby und ert akes to pay and becomes indebted to the receiver in the amount guar anteed or confirmed.

SECTION 5-COMPLETION OF DEBIT TRANSFER AND DISCHARGE

Article 210 .

1. A debit tr ansfer is completed when the destination bank debits the receiver 's account as instructed in the payment order it received and has not reversed the debit and rejected the payment order until the end of the banking day  following  the  receipt. Where a payment order instructs the destin ation bank to debit an identifiable account maintained with it, the debit transfer is completed on the conclu sion of the banking day

that follows receipt of the payment order even before  a debit is posted to the receiver 's account, provided the payment order is not properly rejected until that time.

1. may reject the payment order. It shall become entitled from its sender to a settlement for the amount paid to that sender, by advising its sender and the originating bank , if these are two separate banks, of its rejection. Rejection and entitlement from its sender are automatic by operation of law when the receiving bank has been closed by the supervisory authorities before the close of the banking day following receipt of the payment order.

1. e originating bank , shall advise its own sender , and has a corresponding right to obtain settlement from that sender. Each bank sender, other than the originating bank, shall advise its sender of the rejection not later than on the banking day following the day it received notice of the rejection.

1. e rejection, the originating bank shall promptly , and no later than on the following banking day, advise the originator of the rejection, and may reverse any provisional credit previously posted to the originator 's account, or otherwise, recover from the originator any payment previously made for the payment order.

1. y or with out legal ju stification it reje cts the payment order:

• the kn owledge of the receiver 's authority for the debit transfer ;

• withstanding the proper identification in the payment order r eceived by the bank of an existing r eceiver 's account held at it; and

• here is adequate cover in that account.

5. Time periods under Articles 210 and 2 11 may be shortened by agreement or regulation.

Article 211.

1. Upon t he completion of a debit transfer , the destination bank and each receiving bank that obtained payment from its own receiving bank shall be liable to its send er in the amount of the payment it received. Payment by the destination bank to its send er shall be in the amount of the debit to the receiver 's account and shall be made not later than on the bankin g day following the completion of the debit transfer. Payment by any other receiving bank shall be made not later than the banking day following the r eceipt of its own payment.

2 . Upon r eceiving payment and subj ect to rever sal und er Articl e 198(3) of this Law, the originating bank shall be indebted to the originator in the amount it receive d. To that extent , any provisional credit given to the originator shall be final. Before su ch credit becomes final , the originating bank shall n ot be required to release fund s to the originator , and unl ess agreed otherwise, any release of funds pri or to the compl etion of the debit tr ansfer is provision al until the completion.

Article 212 .

1. Where an authorized debit transfer has been made in payment of a debt owed by the receiver to the originator , unless otherwise agreed between them, the debt is discharged when

the payment transaction is completed. Discharge is the amount of its completion.

1. and as soon as a guarantee of payment is either accepted by the originator or confirmed to the originator by the originating bank.

1. paragraph 2 thereby undertakes to pay and becomes indebted to the originator in the amount guaranteed or confirmed.

SECTION  6– LIABILITY,  DAMAGES,  AND RESTITUTION

Article 213.

• to the receiving bank by that person;

• by that person.

1. (iii) of this Article does not apply, and the person identifi ed as sender on the paym ent order is not liable, when the person proves r eceipt of no benefit from the payment or cancellation order, and that the issue of the unauthorized  payment or cancellation order was not caused by:

• person identified as sender , or someone entrust ed at any time with duties to act for that person with respect to payment transactions or the security procedure; or

• obtain ed from the person identified as sender, or a source controlled by that person, access to that person 's transmitting facilities, or information, including any access device, computer software, or the like, facilitating breach of the security procedure.

1. (iii) , a security procedure is deemed to be commercially reasonabl e if it was chosen by the customer  contrary to the advice of the bank , after the bank offered , and the customer refused, a security procedure that was reasonable for the customer.

Article 214.

1. Where a credit transfer is completed, a sender shall hold the receiving bank harmles s and reimbur se it for any loss up to the amount of the payment order , commercially r easonable expenses, fees and inter est charges.

1. a credit transfer , notwithstanding the execution by the receiving bank and the compl etion of the payment transaction , a sender is not liable to the receiving bank on a payment order transmitted to the receiving bank pur su ant to a security procedure for the detection of error , and to the extent allowed by civil law the receiving bank shall

be entitled to recover from the receiver any amount unintended  to be paid by the sender where:

• , or the payment order was in an amount greater than the amount intended by the sender; and

• 's own compliance with the security procedure and that the error would have been detected if the receiving bank had also complied.

1. 's payment order is duly authorized, and is in accordance with an effective and valid authorization of the originator and receiver.

4. A sender of a payment order , and a receiver who authorizes an originator to initiate a debit transfer, including by means of the issue of a check,  shall  exercise ordinary care in order to prevent forgery and unauthorized issue or  alteration  of payment orders or the authority to issue them, and in order to ensure that they are clear and unambiguous.

Article 215. Where a credit transfer is not completed, irrespective of fault on the part of any participant in the payment transaction:

1. The originator shall not be liable to the originating bank and shall be entitled to have the originator 's account re-credited for the amount debited in cover for his or her payment order. The originator shall further be entitled to recover from the originating bank the originator 's commercially reasonable expenses, fees and interest charges for the re­ credited amount.

2. The originating, and any intermediary bank that carr ied out its own send er 's instructions, is similarly excused from any liability to its receivi ng bank , and has a corresponding entitlement from it , other than for expenses and fees .

Article 216 .

1. A r eceiving bank is liable for commercially r easonable expenses, fees, inter est char ges and interest losses, and wher e applicable, foreign exchange losses, incurr ed by its delay or failure to carry out a payment order. The originator may recover such losses either from the originating bank or from the receiving bank t hat cau sed the delay or failur e. The receiver may recover su ch losses either from the destination bank or from the r eceiving bank that caused the delay or failure . The r eceiving bank that caused the delay or failure is accountabl e to the originating or destination bank that paid  su ch losses for the amount so paid.

1. In addition ,  a receiving bank  that either:

• ailed to promptl y advise its sender of its r ej ection of the payment order , or

• as grossly n egligent in  carrying out or  failing to carry out a payment order , Shall be liable to the originator , whether the originator was or was not its own send er, but provided the originator was  not  n egligent ,  for actual foreseeable damages, not to exceed the principal amount of the originator 's payme nt order. Where appli cable, t he sender shall also be entitled to the r efund of the amount of the payment order un der Articl e 2 15 of this Law .

1. 1 of this Article the entire amount from either the originating bank or the grossly negligent bank. Subject to an interbank agreement , a bank liable under this Article shall be entitled to contribution from the other according to the other 's degree of fault in causing the loss.

1. n a debit transfer , liability under this Article and any limitation thereon is without prejudice to the liability of the destination bank for the wrongful dishonor of a payment order under Article 2 10 (5).

Article 217. Where a credit transfer is completed, but due to an error made  by  a receiving bank (the "erring bank") , payment to the receiver is not as instructed  in the originator 's payment order, in addition to recovery under Article 216 , if applicable, the following rules apply:

1. Where theamountpaidtothereceivereitherexceeds orislessthantheamount of the originator 's payment order, the credit transfer is deemed to have been completed in the amount paid to the receiver. On each payment order, each sender is liable to the receiving bank in the amount of the sender 's own payment order, so that:

• f  the originator 's payment order,  the  erring bank  shall be  entitled  to recover from the receiver the amount of the overpayment in an action governed by the Law of the pl ace where the destination bank is located; and

• ere the  amount paid to the receiver is less than the amount of the originator 's payment order , the erring bank shall pay t he difference to the receiver , and be entitl ed to retain or receive payment from its send er in the amount of the originator 's payment order.

1. ere payment was made t o a receiver other than that of the originator 's payment order, and the erring bank was not the destination bank  of  the originator 's pay ment order , the originator and any sender prior to the erring bank, and the receiver of the originator 's pay ment order may tr eat the cr edit transfer as n ot completed. The erring bank shall be entitl ed to r ecover from the receiver who has been paid the amount of payment in an action governed by the Law of the place wher e the destin ation bank is located.

1. e erring bank is liable to any participant for any principal , interest and reasonable expense losses su ch as bank charges and commun ication costs resulti ng from the error.

1. or   this   Articl e   to   appl y ,   error    may   be   incurred   or   indu ced   innocently  ,

negligently, or fraudulently .

Article 218. When due to an error by a receiving bank (the "erring bank") a debit transfer is compl eted other than instructed in the originator 's payment order , in addition to r ecovery und er Articl es 210 and 2 16, if applicable, the following rul es apply :

1. en the debit to the account of the receiver of the originator 's payment order is in an amount smaller than that of the originator's payment order , t he erring bank shall collect the difference from the r eceiver and pay it to the originator ;

1. When the debit t o the accou nt of the receiver of the originator 's payment order is in an amount lar ger than that of the originator 's payment order , the destinat ion  bank shall promptl y credit the receiver 's account in the  amount  of  the excess. The  erring

bank shall pay the excess to the destination bank and collect it from the originator or any other participant that actually retains the excess and to the extent it retains it;

1. originator's payment order, the destination bank shall credit that receiver's account in the amount of the debit and shall debit the account of the receiver of the originator's payment order in the amount of the originator's payment order;

1. reasonable expense losses such as bank charges and communication costs resulting from the error.

SECTION 7– BANK ACCOUNTS

Article 219.

1. to the terms of the agreement, and other than in circumstances set out in paragraph 2 of this Article , a credit balance which constitutes adequate cover in an account may be withdrawn by the customer or  paid  by  the bank  according  to  a payment  order.  The bank shall not be required to honor drawings on deposit accounts exceeding the  available  account balance  in favor  of the customer.

1. Paragraph 1 of this Article shall not apply where

• credit balance in an account has been subject to a garnishment, seizure

or a similar creditor proc ess;

• has been closed, suspended, blocked or frozen; and

iii .In carrying out the payment orders or instructions for withdrawals the bank shall be violating any law.

1. bank may agree that funds remitted and received for deposit with the bank for the customer shall be distributed as instructed by the customer to one of several accounts held by the customer. Each account shall be subject to individual accounting in connection with the movement of funds received and paid by the bank for the customer.

Article 220.

1. this Article shall be made in writing, or where agreed, electronically.

1. disclose to actual and prospective customers in a readily comprehensible form their terms and conditions for carrying out paym ent transaction s, including their charges, and any estimate, if available, as to the time needed for the completion of the payment tr ansaction.

1. , the bank shall provide the customer with clear information enabling the customer to identify the withdrawal, deposit , or payment transaction, including a reference number, date, amount, and where applicable, charges and exchange rates.

1. , a statement of account identifying each credit and debit posted to the account since the last statement and providing for the final balance.

1. For apassbookaccount,abankmustfacilitatetheongoingupdateofthe passbook by the customer. In each such update, each credit or debit posted to the account since the previous update, and the final account balance, must be recorded. A customer is required to update the passbook regularly.

Article 221.

account to anyone except for the account holder , other than:

• ere disclosur e is und er compulsion by law;

• ere t he interests of the bank r equire disclosure;

• ere disclosure is made by the express consent of t he customer;

• Where disclosure is  und er an opinion on the customer  given  in  the ordinar y course of business to another bank in respon se to the specific enquir y of the other bank; or

• ere t he customer defaulted on his or her obligation to the bank.

1. sclosure und er paragraph 1 (ii) shall be made only :

• e event of a legal action to which the bank is a par ty;

• tween banks  related  to  each  other  through  a  common  owner ship structur e, but only t o the extent of what is reasonably n ecessary for the prot ection of the bank and its related banking companies against loss, in relation to the provision of banking services; or

• connecti on with, and insofar as necessary for , the prop osed sale of the bank itself , or a substantial part of its und ertaking.

1. o disclosure shall be mad e under paragraph 1 (iv) where the customer has withheld consent to such disclosur e, and unless the bank explained to the customer the cu stomer 's right to withhold consent. Such an expl anation may be given to the customer in connection with the opening of any account with the bank.

1. sclosure und er paragraph 1(v) shall be limited to the release of information to a bank or a credit reference agency approved by the National Bank of Cambodia about the default , and upon the customer 's failure to pay, provide adequate security, or otherwise satisfy the bank within 30 days of a written demand for payment of the outstanding obligation.

Article 222. A bank shall not unilaterally modify the terms of the agreement unless it advises the customer at least 30 days before the change comes into effect. A modification in breach of this provision is ineffective.

Article 223.

1. To be binding on the customer, an agreement must be fair and set out rights and responsibilities clearly and in plain language, with legal and technical language used only where necessary.

1. customer's instructions.

1. to any specific limitation or restriction provided by this or any other Law , the bank is liable to the customer and the customer is liable to the bank for any loss or damage caused by the breach of a duty under this Law.

Article 224.

1. bank may apply funds or securities on deposit to collect its fees accrued for services rendered to the customer, such as for the safekeeping, handling, and remittance of funds in a bank deposit.

1. bank may combine accounts of the same customer and apply a credit balance in one account:

• to honora customer 's payment order for which there is no adequate cover

in the account on which it is drawn, or

• satisfaction of any accrued debt owed and payable by the customer to the bank ,

Provided, in each case, the bank does not know that funds in a credit balance so applied are in trust for another person.

1. bank may apply funds, securities or credit balance under this Article only where such funds, securities or credit balance are available for immediate withdrawal by the customer.

SECTION  8-0PERATION  OF THE PAYMENT  SYSTEM

Article 225. The National Bank of Cambodia shall be authorized to  maintain  on  its books accounts, including settlement accounts, for, and to accept deposits from, banks, in domestic  and foreign currencies , on such terms and conditions as it may prescribe by regulation , and otherwise, as agr eed.

Article 226. The National  Bank  of  Cambodia  shall  determine,  formulate,  adopt, publicly disclose and oversee the implementation  of a payment  system policy  directed to the greatest advantage of the people of Cambodia. The policy shall be consistent with best international standards. It shall promote payment system safety and  efficiency, control risk, and promote competition in  the  market  for  payment  services,  consistent with the overall stability of the financial system.

Article 2 2 7.

• and settlement

systems in domestic and foreign currencies,

• Assist banksin organizing and operating facilities for sending, processing and receiving payment orders for their customers, as well as for the clearing and settlement of interbank payments, including payments by  check  and other payment instruments , in domestic and foreign currencies,

• oversee, as well as set out conditions  and requirements for the licensing or registration of operators of payment systems and         money services, including for the  transmission  of  money,  the withdrawal of cash, check cashing , money safekeeping, currency exchange, and the issue of payment cards and payment instruments , and

• and issue regulations relating to such matters and

implementing its payment system policy under Article 226.

1. pursuant to this Article may provide for the validity of bilateral and multilateral interbank netting agreements and interbank settlement rules, and may specify that such agreements or rules supersede any inconsistent law, whether or not it relates to insolvency proceedings. Regulations may also provide for the prevention or reduction of risks  associated with the failure to complete the settlement of obligations resulting from an interbank multilateral clearing.

1. affecting the generality of this Article, for operators of payment systems, money services, and of all clearing and settlement systems under this Article, the National Bank of Cambodia shall have all powers available to it with respect to operators covered under Article 7 (11) of the National Bank of Cambodia Law.

Article 228. A bank shall be able to send, receive and  process  payment  orders,  and related customer's instructions, including for cash withdrawals,  and otherwise participate in a payment transaction. It may do so through one or more authorized third-party processors, as may be agreed between the bank and the third -party processor, and subject to requirements, conditions and restrictions that may be set out in regulations issued by the National Bank of Cambodia.

Article 229. Other than specifically provided in any Article, the provisions of this Chapter may not be varied or negative by either bilateral or multilateral agreement; except that an agreement may:

• it does not adversely affect the rights of any other person, and

• not adversely affect rights of any person not party to the agreement including a non-bank customer.

Article  2 30.

CHAPTER VI- SANCTIONS

1. National Bank of Cambodia may promulgate regulations setting out sanctions it may impose on and apply to persons who do not honor their liability in connection with negotiable instruments and payment orders.

1. Sanctions forthe breach of regulations under paragraph 1 above shall be:

• warning;

• reprimand;

• or restriction to issue any or all types of negotiable instruments or authorize a debit transfer for a period of time not to exceed 12 months,

• penalty payment of 5 percent to 100 percent of the face value of any dishonor ed instrument or payment  order or instrument  or authority issued in violation of a prohibition or restriction;

1. there is no adequate cover for a valid check, the drawee bank that dishonored the check shall record the incident and report it within two days  of  the dishonor to the National Bank of Cambodia. The drawer of the check shall not be permitted to issue a check or authorize a debit transfer for 12 months. "Adequate cover" may either consist of actual funds forming a positive balance in the account or be given pursuant to an overdraft facility a drawer has with the drawee bank;

1. Bank of Cambodia shall operate a Registrar recording all bank accounts out of which checks may be drawn and debit transfers may be carried out, as well as of all reported incidents , and issued warnings, reprimands, prohibitions and restrictions under this Article. Upon the issue of each warning, reprimand, prohibition or restriction the National Bank of Cambodia shall advise each bank in which the person against whom it was issued maintains such an account and shall make such information available for banks upon request.

1. shall require the person subject to the prohibition or restriction to immediately return all blank unused forms of checks and authorizations to collect by debit transfer delivered to him by the bank. A bank with knowledge of a prohibition or restriction shall be liable to the holder of a check and originator of a debit transfer issued or authorized by a person subject to a prohibition or restriction for the full amount of the check or debit transfer where the blank form of the check or authorization to collect by debit transfer was delivered to the person subject to the prohibition or restriction while the prohibition or restriction was effective to the knowledge of the bank that delivered the blank form to the person.

1. Bank of Cambodia is advised that payment was made to the satisfaction of the holder. Such payment shall include bank charges paid to the drawee bank, interest and damages at a minimum of 5 percent of the principal amount paid to the holder, and penalty of one million Riels paid to the National Bank of Cambodia. The National Bank of Cambodia shall prescribe by regulations the manner of satisfying these requirements.

Article 231.

• regulation, directive or rule issued by the National Bank of Cambodia

in connection with any matter under those provisions, or

iii.A lawful request for information directed under this Law,

Is guilty of an offence, and is liable on summary conviction to a fine from 5 million to 10 million Riels or to imprisonment for a term of 2 to 5 years, or to both.

• breaks  a prohibition  or restriction  issued under  Article  230 ,

• gives authority to originate a debit transfer out of his account with

the intention that the payment order shall not be honored, or

iii. Who alters, forges, counterfeits or falsifies a negotiable instrument authority for collection by debit transfer, or payment order, and knowingly holds or uses such an altered, forged, counterfeit or falsified instrument , authority or payment order,

Shall be liable to a fine of 5 to 50 million Riels or to a term of imprisonment of 2 to 5 years.

1. person:

• with the intent to harm another countermands or withdraws cover for the payment of a check,

• on a negotiable instrument with the intention that it

shall not be honored upon maturity,

• willfully and with the intent to harm another dishonors

an obligation incurred on a negotiable instrument

shall be liable to a fine of 2 to 6 million riels and to a term of imprisonment of 1 to 3 years,

without prejudice to payment of the amount of the negotiable instrument in question to the holder.

1. action lies against the National Bank of Cambodi a, any officer , employee, or

director of the National Bank of Cambodia, or any person acting under the direction of the National Bank of Cambodia, for anything done or omitted to be done in good faith in the administration or performance of any powers or duties under this Law.

Article 232.

1. or a violation by a legal entity, any sanction under this Chapter may be applied to any of its directors, organs, and officers.

1. may be imposed on or applied to the principal, agent , or both.

1. sanction under any other Law.

Article 233.

CHAPTER VII- FINAL PROVISIONS

1. ,  and guidelines , as well as operating procedures , for the  implementation  of  this  Law,  particularly regarding:

• orm structure for account identifi cation and classification ,

• e format of payment order s,

• he standards for the communi cation of payment orders,

• Forms of checks, bills of exchange, and promissory notes, as well as of all other  documents  to  be  issued  und er  this  Law,  whether  by   parties  or officials, such as for n otice or prot est, and pertinent pro cedures;

• Bank  duties ,   pro cedures  and  pr actices  in  receiving  payment  orders  and carrying out payment tr ansactions,

• he bank account agreement , and information to be provided by banks to customers,

• tatistical information to be provided by banks to the N ational Bank of Cambodia

required for the proper and effective conduct of monetary policy, and viii.        Any other matter set out in a specific provision of this Law.

1. lation s may be pr escribed for the protection of customers and the integrity and developm ent of payment systems and the use of negotiable instruments in Cambodia. To such ends, regulations may restrict, limit or preclude the use of checks or other payment orders from design at ed categories of accounts and person s or set out conditions for such use. Regu lations issued und er this Law may also restrict liability of individuals, or specify r estrictions and preconditions for  such  liability,  in  connection with , negotiabl e instruments and payment tr ansaction s from or to accounts, used primaril y for per sonal or household and non-bu siness purposes.

1. egulation s issued by the Nat ional Ban k of Cambodia under this Law may determine  standards  by  which  the  perfor man ce  of  duties  un der  the  Law  may  be