Russian civil law, regulating promissory note and bills of exchange circulation in the country, belongs to the Geneva type – it is based on and conforms to the 1930 Geneva Promissory
Note Convention formed by the countries that used the Uniform Law for Bills of Exchange and Promissory Notes in their national legislations. Specific situations and details of the promissory
note circulation in Russia, not described in 1930 Geneva Promissory Note Convention, are subject to regulations given in provisions of the Russian Civil Code in Chapter 42 “Loan and Credit”, p.1 “Loan”.
Promissory note in Russia is a written document signed by the drawer (promisor) and containing his (or other party responsible) unconditional obligation to pay a specified sum of money to a
certain party (private individual or legal entity) or the bearer either at a specified date or on demand.
Bill of exchange in Russia is a written document signed by the drawer and containing his unconditional order to the drawee to pay a specified sum of money to the thrird party
(private individual or legal entity) or the bearer either at a specified date or on demand.
So, the main difference between promissory note and bill of exchange is that promissory note is drawn by the promisor who borrowed money and contains his obligation to pay back the borrowed amount,
while bill of exchange is drawn by the money lending party (the drawer) and contains his order to the payee to pay the lended amount to the third party (the payee).
According to Russian law, a properly drawn promissory note or bill of exchange must contain the following details:
If any of the above details is missing, the document cannot be legally recognized as a promissory note or a bill of exchange and is considered as a simple debt acknowledgment.
Promissory notes are quite common debt securities on Russian financial market - they can be drawn by individuals or legal entities and are generally transferable by endorsements.
Major Russian industrial companies, banks and other financial organizations routinely use promissory notes as a quick and cost-efficient instrument for attracting loans.
The bills of exchange used to be popular on Russian financial market in the early nineties, but now they very rarely used, if at all.
The market value of the promissory note or the bill of exchange depends on four main parameters:
With a strong reputation built on more than 20 years of experience we provide independent valuation services in regard to promissory notes and bills of exchange to
our clients in Russia and internationally.
For more information on valuation of promissory notes and bills of exchange in Russia, please contact us.
If the drawer (promisor) of the promissory note is a public company or promissory notes of this drawer are in free circulation on the open financial market in Russia,
then the only document required for valuation is a copy of the promissory note itself.
In other cases, the following documents and information are required for promissory note valuation:
Depending on the purpose of valuation and other factors, the above list of information and documents may be reduced or expanded after our detailed review of the valuation assignment.