CHRONICLE OF MONETARY POLICY
DECEMBER 1996

6 DECEMBER

Decree of the President of Eesti Pank (Bank of Estonia)
On the Circulation of 1 Kroon Coins

Pursuing the need for regulating the circulation of the Estonian 1 kroon coins, a temporary procedure for issuing the 1 kroon coins was established for the period between 16 December 1996 and up to the end of 1997. According to the procedure, credit institutions are allowed to issue the Estonian 1 kroon coins of 1992, 1993 and 1995 issues to single individuals up to 20 coins and to other customers up to 5000 coins pursuant to their statutory activities. Credit institutions are obliged to submit to Eesti Pank the respective information.

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Decree of the President of Eesti Pank
On the Conveyance of 1 Kroon Coins across the Customs Frontier

Pursuant to Sections 1 and 6 of Article 2 and Article 14 of the Law of the Central Bank of the Republic of Estonia, the Decree allows the conveyance of the Estonian kroons and foreign currency cash, excluding the Estonian 1 kroon coins of 1992, 1993 and 1995 issue, across the customs frontier of the Republic of Estonia without restrictions. One person is allowed to convey up to 20 Estonian 1 kroon coins of 1992, 1993 and 1995 issue across the customs frontier.

The Decree declared invalid Clause 1 of Eesti Pank President's Regulations of 18 March 1994 (see p. 3 of Eesti Pank Bulletin No 3 of 1994). The Decree took effect on 16 December 1996.

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Regulations of the President of Eesti Pank
On the Results of the 1996 Essay Competition of Eesti Pank

The Regulations confirmed the decision of the commission judging the essays submitted to the competition arranged to mark the fourth anniversary of the reintroduction of the Estonian kroon. The commission decided to award Priidu Ristkok with a 3000 kroon consolation prize for his essay "Regional Development: Various Concepts and the Role of the Public Sector".

13 DECEMBER

Decree of the President of Eesti Pank
On Partial Changes in Eesti Pank President's Decree of 26 June 1996

The present decree introduced the following changes in Eesti Pank President's Decree of 26 June 1996 "Instructions for Time for Settlement of Payments" (see pp. 9-11 of Eesti Pank Bulletin No 5 of 1996):

1. In Clause 2
1.1. in the notions Payer and Beneficiary the word "funds" was replaced with "money";
1.2. in the notion Payment order the words "type of payment" were replaced with the words "type of payment order";
1.3. a paragraph in the following wording was added to the end of the notion Payment order:
"Payment order may be:
  (i) a credit order - the originator is the payer;
  (ii) a debit order - the originator is the payee or a third partyestablished by legislation";
1.4. the following text was excluded from the notion Payment:
"Payment in book-entry money can be initiated using:
  (i) a credit order - the originator is the payer;
  (ii) a debit order - the originator is the payee or a third party established by legislation";

2. In Clause 4 the Estonian wording for "domestic credit transfers" and "domestic debit transfers" was changed.

3. The following text in the first sentence in Clause 5 "the payment order sent by the payee or a third party in favour of the payee and accepted by the receiving credit institution" was replaced with the words "the debit order".

4. In Clause 6 the following words in the first sentence "the payment order issued by the payer" were replaced with the words "the credit order".

The decree took effect on 1 January 1997.

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Decree of the President of Eesti Pank
On Establishing Instructions for Forwarding and Receiving Payment Orders

Pursuant to Section 1 of Article 45 of the Law on Credit Institutions, the Decree establishes the Instructions for Forwarding and Receiving Payment Orders starting from 1 March 1997. Clause 2.7 took effect on 1 January 1997.

At the same time, starting from 1 March 1997 the Decree declares invalid Clauses 32 and 33 of the Instructions for Non-cash Payments established by the Regulations of Eesti Pank of 17 June 1992.

Instructions for forwarding and receiving payment orders

1. Definitions
   a. Credit order means a payment order initiated by the payer.
   b. Standing order means an order which recurs periodically at determined intervals.
   c. Payment intermediary means a receiving credit institution which is neither the payer's nor beneficiary's credit institution.
   d. Archival registration number means a registration number given to a transaction by the credit institution for that transaction only.

2. Forwarding and Receiving Credit Order
2.1. Payer's credit institution may receive a credit order for execution from the payer either on paper, electronically or by some other way agreed upon.

2.2. If the payer and payer's credit institution have not otherwise agreed upon, payer's credit institution confirms that it has accepted from the originator a payment order for execution. The confirmation must include the date the credit order was accepted for execution by the payer's credit institution and an archival reference number of the payer's credit institution. The confirmation has to be connected unambiguously to the payment order that is to be confirmed.

2.3. Payer's credit institution may settle the payment:
   a. directly with the beneficiary's credit institution;
   b. via the payment intermediary;
   c. via Eesti Pank.

2.4. Settlement of Payments Directly with the Beneficiary's Credit Institution
2.4.1. If a domestic payment in Estonian kroons is settled directly with the beneficiary's credit institution, the payer's credit institution sends the credit order accepted for execution both to the beneficiary's credit institution and Eesti Pank electronically. The payer's credit institution and the beneficiary's credit institution have to sign a bilateral agreement for forwarding and receiving credit orders.
2.4.2. The beneficiary's credit institution verifies whether the credit order received from Eesti Pank is identical to the credit order received from the payer's credit institution.
2.4.3. If the credit order received from Eesti Pank is identical to the credit order received from the payer's credit institution, the credit order received from the payer's credit institution is, for the beneficiary's credit institution, a basis for paying money to the beneficiary.
2.4.4. If the credit order received from Eesti Pank is not identical to the credit order received from the payer's credit institution, the will of the originator is not considered explicitly expressed.

2.5. Settlement of Payments via the Intermediary
2.5.1. If a domestic payment in Estonian kroons is settled via an intermediary, the payer's credit institution sends the payment order accepted for execution both to the intermediary and the beneficiary's credit institution electronically. The payer's credit institution and the beneficiary's credit institution have to sign a bilateral agreement for forwarding and receiving credit orders.
2.5.2. The beneficiary's credit institution verifies whether the credit order received from the payer's credit institution is identical to the credit order received from the intermediary.
2.5.3. If the credit order received from the payer's credit institution is identical to the credit order received from the intermediary, the credit order received from the intermediary is, for the beneficiary's credit institution, a basis for paying money to the beneficiary.
2.5.4. If the credit order received from the payer's credit institution is not identical to that received from the intermediary, the will of the originator is not considered explicitly expressed.

2.6. Settlement of Payments via Eesti Pank
2.6.1. If a domestic payment in Estonian kroons is settled via Eesti Pank and the beneficiary is not Eesti Pank, the payer's credit institution sends the credit order accepted for execution both to Eesti Pank and the beneficiary's credit institution electronically. The payer's credit institution and the beneficiary's credit institution have to sign a bilateral agreement for forwarding and receiving credit orders.
2.6.2. The beneficiary's credit institution verifies whether the credit order received from the payer's credit institution is identical to the credit order received from Eesti Pank.
2.6.3. If the credit order received from the payer's credit institution is identical to the credit order received from Eesti Pank, the credit order received from Eesti Pank is, for the beneficiary's credit institution, a basis for paying money to the beneficiary.
2.6.4. If the credit order received from the payer's credit institution is not identical to that received from Eesti Pank, the will of the originator is not considered explicitly expressed.
2.6.5. If the beneficiary of a domestic payment in Estonian kroons is Eesti Pank, the payer's credit institution sends the credit order accepted for execution to Eesti Pank electronically.
2.6.6. If the originator of a domestic payment in Estonian kroons is Eesti Pank, the credit order received from Eesti Pank is, for the beneficiary's credit institution, a basis for paying money to the beneficiary.

2.7. Obligations of the Payer's Credit Institution and Beneficiary's Credit Institution
2.7.1. The payer's credit institution and beneficiary's credit institution are obliged to:
   a. settle the credit order without distortions;
   b. guarantee the maintenance of bank secret in forwarding and receiving a payment order;
   c. give either to the payer or beneficiary, respectively, a statement of the account according to the respective decision adopted by the Estonian Accounting Board.

18 DECEMBER

The Riigikogu (Parliament) passed the Law on the 1997 State Budget. The budget is balanced: the revenue and expenditures are equal to each other amounting to 12,512,034,000 kroons. The 1997 state social insurance budget and the state medical insurance budget were adopted as supplements to the Law.

27 DECEMBER

Decree of the President of Eesti Pank
On the Issue of 500 Kroon Banknotes

In harmony with Article 2 of the Currency Law of the Republic of Estonia and pursuant to the above Decree, on 2 January 1997 new 500 kroon banknotes of 1996 issue with improved security features were put into circulation. Mass communications were previously provided with the respective information and the description of new banknote.