Castellán

Among the payment instruments provided, negotiable instruments are -without a doubt- one of the most used in our country, and especially within these, checks. The check has become consolidated as an instrument that provides trust and security, not only because of the legal protection it enjoys (which allows for quick collection and, if necessary, access to a fast track for judicial execution), but also for allowing the deferral of payment and/or its ease of circulation.

 

Traditionally, the "Check Law" (No. 14,412) provided that checks circulated -and were canceled- essentially on paper, identified as a physical or paper check.

 

However, with the enactment of Law No. 20,038, regulated by Circular No. 2436 of the Central Bank of Uruguay, two new categories are introduced: (i) the electronic check and (ii) the digital check.

 

i) Electronic check: created, circulated, and canceled electronically, using the advanced electronic signature as a signature.

 

ii) Digital check: created as a physical or paper check and, after its creation, digitized by scanning for deposit and collection purposes, transforming the check into a digitized image.

 

A. Main aspects introduced by the new regulation.

 

1. The advanced electronic signature is provided for electronic checks. In this way, the signature of the drawer (issuer) of the check may be autograph or electronic, depending on whether the check is physical or electronic.

 

2. The advanced electronic signature is allowed for endorsements.

 

3. Changes are introduced regarding the collection of checks: in addition to the traditional method of depositing the physical check directly at the Bank, now the possibility of doing so by sending the digitized image of an originally physical/paper check to the receiving Bank is also provided.

 

4. It is provided that, in the case of electronic or digitized checks, the Bank must provide the check holder with a rejection certificate, establishing the minimum content that it must contain.

 

It may be issued in paper format (and signed with the autograph signature of the authorized person of the receiving Bank), as well as in digital format (to be signed by the authorized personnel of the receiving Bank using the advanced electronic signature). It must be issued in the format chosen by the check holder.

 

5. The digital and electronic check is included in the list of executive titles (which allow the holder to resort to a faster judicial process for collection), with the rejection certificate issued by the Bank being sufficient.

 

6. The Compensation and "check truncation" institute is established, enabling electronic compensation between different banks when the check:

 

(a) had not been issued for payment by the Bank in which it is deposited; or

(b) the authorized customer to receive the deposit did not have an account at the Bank that must make the payment.

 

In this case, the receiving Bank of the check must send its digitized image to the entity that must make the payment.

 

7. The obligation that checks (whether physical or not) must have reactive inks (ultraviolet light) is eliminated, now being optional to include them in the design.

 

However, it is established that patterns of information specific to each Bank must be included to facilitate the detection of forgery attempts and/or alterations.

 

8. It is stipulated that both the physical check and the digitized document must be kept and safeguarded for a minimum period of 6 months, counted from the expiration of the presentation period for collection.

 

The digitized image of the check must also be kept for a minimum of 6 months, but counted from its capture.

 

It is important to note that any of these deadlines will be suspended until a final judgment is reached when:

 

(i) the issuer (drawer) of the check has initiated legal action after its payment, or

(ii) the check holder has taken legal action after the Bank's rejection of payment.

 

In both cases, it is the plaintiff's responsibility to inform the receiving Bank about the initiation of legal actions.

 

9. Finally, it is authorized that digitized images can be kept by entities other than the receiving Bank. However, the Bank will always maintain final responsibility for custody.

 

B. News regarding the services of Financial Intermediation Institutions (“Institutions”).

 

1. A new service is added: Institutions may implement mechanisms that allow the sending of the digitized image of the physical check for collection.

 

In these cases, the digital image may replace the physical document (as long as it is captured under the conditions established by the BCU).

 

It is important to note that this new mechanism would be an additional service, and in no way implies that the receiving Bank is authorized to stop offering traditional collection channels.

 

2. Receiving Institutions of checks must contractually establish with their customers the conditions for providing the decentralized digitization service of the check.

 

This can be done by incorporating these conditions into the existing contract, or by entering into a specific one for this operation).

 

The regulation specifically sets out some elements, deadlines, and conditions for the submission of the physical document to the receiving Bank, and (iv) the process for handling complaints.

 

Likewise, it is provided that the customer must expressly indicate that they will assume civil and criminal responsibility of the depository while the physical document is in their custody.

 

Furthermore, the receiving Bank may agree that the customer will keep the digitized physical document on their own account and order. However, the receiving Bank will retain responsibility for the custody of the digitized document during the legal retention period.

 

Finally, the regulation establishes that the contract must be available to the BCU, who may require its modification if abusive, unclear, inaccurate, or insufficient clauses are detected in the information provided.

 

3. Institutions must have a clear, transparent, and accessible risk policy regarding these types of operations.

 

4. The regulation also defines the responsibilities of the receiving Bank of checks, among which are:

 

(i) request their customers, as appropriate, to send the physical documents of the digitized checks when they have not sent them within the contractually agreed period, and

(ii) issue rejection certificates for checks in accordance with applicable rules.

 

5. The obligations and requirements for the implementation of digitized checks are provided and regulated, highlighting those related to:

 

(i) image capture, not accepting the use and sending of a previously generated image;

(ii) the use and transmission of these instruments to the receiving Bank, ensuring compliance with applicable international standards;

(iii) the ways to record the invalidation of the physical check, to prevent the circulation of the same negotiable instrument in different formats.

 

C. Final reflections.

 

The introduction of electronic and digital checks at the national level represents many positive changes, undoubtedly the main one being the -increasing- simplification of payment processes, based on principles that seek to guarantee the security and efficiency of technology, without sacrificing the protection provided by legal instruments to the "traditional mechanisms".

 

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Dr. Carolina Díaz De Armas - Dr. Gabriela Ripoll

 

Montevideo, March 14, 2024