The Check Law of Iran Amended
Nourlaw-26 November 2018- Tehran -The amended law of Issuance of Checks was published today in the Official Gazette and it shall come into force within 15 days as from 12 December 2018.
The check is one the most commonly and broadly used financial instruments in Iranian business and transactions. However, in light of the recent economic problems of the country, the number of bounced checks has significantly increased. For correcting this situation and bringing more order and control into financial relations, the Iranian parliament acted to amend and make the check law of Iran more compatible with the essential facts of the business climate and ameliorate the misuse of checks. Among many precautionary rules set in the amendment, the concept of the Electronic Check is foreseen therein and the Central Bank of Iran is obliged to fix the mechanism for use of this digital device within the period of one year.
According to the amended clauses, those who issue bad cheeks will face heavier punishments and the possibility of closing all of their bank accounts across the country. In addition, the deprivation of their right of receiving bank loans and other facilities are foreseen in this amended law. Obtaining of the checkbook will be more difficult and the credibility (solvency) of the receivers of the checkbook will be verified before allowing them to have checkbooks.
In cases wherein a bad check is unable to be cashed due to shortage of funds in the account of the issuer of the check, there will be no need for starting litigation against the account holder, and the enforcement department of the court is authorized to effect an execution writ for seizing the amount of the bad check out of the assets of the signatory of the bad check.
The amended law has also set punishments for those persons who obtain a checkbook through deceitful means and for those bank employees who do not adhere to the related law and regulations.