Monetary Obligation

an obligation to pay money. According to legislation in effect in the USSR, monetary obligations are to be expressed and paid in Soviet currency. Monetary obligations in foreign currency are permitted only in the cases and manner established by legislation. In the territory of the USSR, the Gosbank (State Bank) of the USSR has the exclusive right to carry out transactions in foreign currency and documents subject to payment in foreign currency. Payments in foreign currency based on monetary obligations are made for foreign trade transactions, regarding contracts for servicing merchant vessels in USSR ports, and in other such cases. These transactions are carried out by the Vneshtorgbank (Foreign Trade Bank) of the USSR.

Monetary obligations are usually settled when the debtor gives the creditor the amount due (or remits it to him); they may also be settled by putting the debt on deposit at a notary office. Monetary obligations between socialist organizations are usually executed on a clearing basis.

The general rule established by Soviet legislation is that no interest is allowed to be charged on monetary obligations. Exceptions to this rule are provided for in the civil codes of the Union republics (for example arts. 176 and 226 of the Civil Code of the RSFSR); namely interest charges on monetary obligations are permitted in foreign trade, in loan transactions by credit institutions, on deposits and current accounts of private citizens, and on defaulted monetary obligations in arrears.