Law Amending the Issuance of Checks

Law Amending the Issuance of Checks

Article 1:

In Article 6 of the Law on the Issuance of Checks enacted on 16/04/1977, with subsequent amendments and additions, the phrases “and the period of validity” and “the maximum period of validity of a check from the date of issuance of the checkbook is three years, and checks whose stated date falls after the validity period are not subject to this law” are deleted.

Article 2:

In Note (1) of Article 21 bis of the Law, the phrase “regarding checks issued after two years from the effective date of this law” is amended to “regarding check forms from checkbooks issued after the end of Esfand 1399.” The sentence “checks whose date of issuance precedes the aforementioned time shall be governed by the law in force at the time of issuance” is amended to read as follows: “checks issued from checkbooks whose date of issuance precedes the time stated in this note shall be governed by the law in force at the time the checkbook was issued, and banks shall pay such checks without the need to register them in the Sayad system. On all check forms from checkbooks issued after the above-mentioned date, the following statement must be printed: ‘Issuance and endorsement of a check without registration in the Sayad system shall be invalid.’”

Article 3:

A new article, designated as Article 24, is added to the Law as set out below, and the existing Article 24 is renumbered as Article 25.

Practical Points for Issuers and Recipients of Checks

Article 24:

A guaranteed check shall be subject to the following provisions:

1. The issuance and delivery of guaranteed checks by banks to customers shall be conducted exclusively through the Integrated Electronic Check Issuance System (Sayad). This process requires completion of the relevant application form by the applicant at the bank branch in the presence of a bank officer, inclusion of the identity details and account number of the recipient on the guaranteed check in accordance with instructions issued by the Central Bank of the Islamic Republic of Iran, and registration of the reason for requesting the guaranteed check in the Sayad system. The system assigns a unique identifier to each check, and the Central Bank is obligated to provide the recipient with the possibility to inquire into the guaranteed check information.
2. Payment of the amount of a guaranteed check by the bank shall be made exclusively to, and into the account of, the recipient whose details are stated on the guaranteed check. Endorsement for the transfer of a guaranteed check shall have no legal validity.
3. Cancellation of a guaranteed check, at the request of the applicant or their attorney or legal representative, upon presentation of the original check for deposit of the funds into the applicant’s account, without the need for endorsement by the recipient, shall be possible only up to one month after its issuance by the issuing bank. Payment of a guaranteed check to the recipient upon presentation of the original check after the period specified in this clause shall be conditional upon completion of the relevant anti-money laundering forms by the applicant or the recipient and the bank branch’s report to the anti-money laundering unit of the issuing bank.
4. In the event of loss of a guaranteed check, where both the applicant and the recipient refer to the issuing bank and complete and sign the form declaring the loss of the guaranteed check and a non claim undertaking, and request a duplicate, the bank is obligated, in addition to verifying the identities of the applicant and the recipient, to verify their identity information through the banking electronic identity verification system. After cancellation of the lost check, the bank shall issue a duplicate guaranteed check in accordance with the information recorded in the Sayad system.

In the event of forgery of a guaranteed check or use of a forged guaranteed check, the offender, in addition to the statutory criminal penalties, shall, by court order, be deprived of obtaining guaranteed checks for a period of two to six years.

This law, consisting of three articles, was approved in the public session of the Islamic Consultative Assembly on Sunday, 29/01/1400, and was confirmed by the Guardian Council on 18/02/1400.

Frequently Asked Questions About the Law Amending the Issuance of Checks