Section II Endorsement

(1)

Any bill of exchange, even where not explicitly issued to order, may be transferred by endorsement.

(2)

Where the drawer has written in the bill of exchange the words "not to order" or another phrase of equivalent meaning, the bill of exchange shall be transferred under the procedure for transfer of receivables.

(3)

A bill of exchange may be endorsed to the drawee, the drawer or any other person who has undertaken obligations under the bill of exchange. Such persons may again endorse the bill of exchange.

(1)

An endorsement may not be conditional.

(2)

A partial endorsement shall be null and void.

(3)

An endorsement to the bearer shall have the same effect as a blank endorsement.

(1)

The endorsement must be written on the bill of exchange or on a sheet of paper attached thereto (allonge). Is must be signed by the endorser.

(2)

The endorsement need not specify the person in whose favour it was made, or it may contain only the signature of the endorser (blank endorsement). In order to be valid, a blank endorsement must be written on the back of the bill of exchange or the allonge.

(1)

An endorsement shall transfer all the rights under a bill of exchange.

(2)

In the case of a blank endorsement, the bearer may:

1.

fill in the blank space with his own name or the name of another person;

2.

make a blank endorsement on the bill of exchange;

3.

deliver the bill of exchange to another person, without filling in the blank space and without endorsing it.

(1)

The endorser shall be liable for the acceptance and payment of the bill of exchange, unless otherwise agreed.

(2)

An endorser may prohibit further endorsement. In such case he shall not be liable before the persons to whom the bill of exchange has been endorsed subsequently.

(1)

The holder of a bill of exchange shall be deemed the legitimate bearer, provided his right ensues from the continuous order of endorsements, even where the last endorsement has been a blank endorsement. Crossed out endorsements shall be considered non-existent. Where a blank endorsement is followed by another endorsement, it shall be deemed that the signatory has acquired the bill of exchange by the blank endorsement.

(2)

Where a person has been deprived of possession of the bill of exchange in any way, the bearer, who shall ascertain his right pursuant to paragraph 1, shall not be obliged to deliver it, unless where it was acquired in bad faith or by gross negligence.

(1)

In the case of endorsement with provision "to be received", "for collection", "by authorization" or another phrase to the meaning of authorization, the bearer may exercise all the rights on the bill of exchange, but he may transfer it only with endorsement by authorization. In such case the persons liable may use against the bearer only the objections they could counterpose against the endorser.

(2)

The authorization contained in an endorsement by authorization shall not be terminated upon the death or the legal disability of the authorizing person.

(1)

In the case of endorsement with provision "for guarantee", "for pledge" or another phrase with the meaning of security, the bearer may exercise all the rights on the bill of exchange, but he may transfer it only with endorsement by authorization.

(2)

Debtors may not put against the bearer objections based on their personal relationship with the endorser, unless the bearer has acted in bad faith in acquiring the bill of exchange.

(1)

An endorsement made after maturity shall have the same effect as an endorsement made before that. An endorsement made after the protest, due to default of payment or after expiration of the term for protest, shall have the effect of the transfer of a receivable.

(2)

It shall be assumed, until proven to the contrary, that an endorsement without a date has been made before expiration of the term for protest.

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