A new draft law governing negotiable instruments has proposed changes intended to legalise the negotiable instruments in electronic format. A negotiable instrument is a written document of monetary value which promises a sum of payment to a specified person or the assignee. Negotiable instruments are transferable in nature, allowing the holder to take the funds as cash or use them in a manner appropriate for the transaction or according to their preference. The instruments being referred to in the bill include cheques, bills of exchange, and promissory note. The virtual plenary sitting of the Chamber of Deputies on June 7, approved the relevance of the bill, which will be scrutinised by the responsible parliamentary committee before being put to a vote into law by the Plenary. While explaining the relevance of the bill, Claudine Uwera, the Minister of State in Charge of Economic Planning, said that the current law enacted in 2009 does not provide that such instruments can be exchanged electronically, pointing out that it seeks to address such an issue. “As technology is increasingly being adopted in all, including fast-tracking economic development, it is evident that the use of conventional instruments in business will be reduced in the foreseeable future, while the use of technology in payments will be accelerated,” she said. Also, in the existing law, she said, banks were allowed to issue cheques, but the bill in question proposes that microfinance institutions can also use cheques after being granted approval by the National Bank of Rwanda. Uwera indicated that a check can be scanned and be digitally signed then be transferred to serve the intended purpose. Once enacted, Uwera said, this law will greatly contribute to making Kigali a financial service hub as envisaged under the Kigali International Finance Centre, because it will facilitate business people to use electronic negotiable instruments, especially as a number of them will be doing business based in different parts of the world. In addition, the current law did not provide for offences and penalties as well the organ responsible for their enforcement. The new bill provided for that, and the entity in charge of the implementation of the legal provisions, which the National bank of Rwanda. A negotiable instrument must meet requirements including to be in writing on paper or electronically and signed by the maker or the drawer; and to contain an unconditional promise or order to pay a specified amount of money. Other requirements are to be payable on demand, or at a fixed or determinable future time; be payable to order or to bearer; be addressed to a drawee who must be named or otherwise indicated therein with reasonable certainty. MP Veneranda Nyirahirwa said that she supports the introduction of the electronic instruments in the bill, but expressed concern about the cybercrimes [in the financial sector]. “I would like to know how prepared we are to deal with issues that might result from the use of electronic means yet there are fake instruments or other fraudulent acts,” she said. MP Leonard Ndagijimana said that there are there was not enough professionals including legal experts in ICT in business and economic cybercrimes. He pointed out that, in foreign countries, there are hackers who illicitly entre bank systems and steal money. “What are the efforts that are going to be put in ICT in doing business so that all financial institutions have experts, including jurists in electronic financial services so that they are able to identify the crime plots before they are committed,” he said. The Minister said that the Government of Rwanda established the National Cybersecurity Agency which is mandated to tackle the economic crimes committed by electronic means and build skills and capacities in cybersecurity. Offences and penalties Fraudulent reception of funds or negotiable instrument; to authorise or carry out any withdraw with knowledge that a person is not a debtor on the date the transaction is made or on the settlement date featured in the bill or promissory note is a crime. Under the bill, a person convicted of any of these acts is liable to imprisonment for a term of not less than six months and not more than two years and a fine of not less than two times and not more than 10 times the value of the amount indicated on the negotiable instrument in Rwandan francs. The bill also provides that issuing a bouncing cheque is a crime. The offender is liable to imprisonment for a term of not less than two years and not more than five years and a fine of not less than five times and not more than ten 10 times the value of the amount stated on the cheque.
