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URR 725 - REFRESHERDisclaimer:These notes are intended for spaced revision and refresher purposes only. They are a condensed summary of key points and do not constitute a comprehensive substitute for the International Chamber of Commerce (ICC) publications on the relevant topic.For in-depth understanding and detailed information, please refer to the official ICC publications on the subject. These publications provide authoritative guidance and interpretations, ensuring you have the most current and accurate information available.Remember:These notes are not a replacement for professional advice or legal counsel. Always consult the official ICC publications for complex situations or critical decisions. By using these notes, you acknowledge and agree to these terms

• Article 1 of the Uniform Rules for Bank-to-Bank Reimbursements under Documentary Credits (URR 725) outlines the application and scope of these rules. Here is an explanation of the key points:• 1. Application of URR: The URR 725 applies to bank-to-bank reimbursements under documentary credits. These rules come into effect when the text of the reimbursement authorization explicitly states that it is subject to these rules. This means that parties involved in a bank-to-bank reimbursement must adhere to the URR 725 unless there are specific modifications or exclusions mentioned in the reimbursement authorization.• 2. Responsibility of the Issuing Bank: The issuing bank plays a crucial role in ensuring that the reimbursement is subject to the URR 725. It is the responsibility of the issuing bank to indicate in the documentary credit that the reimbursement is governed by these rules. By doing so, the issuing bank sets the framework for the application of the URR 725 in the bank-to-bank reimbursement process.• 3. Role of the Reimbursing Bank: In a bank-to-bank reimbursement governed by the URR 725, the reimbursing bank operates based on the instructions and authority provided by the issuing bank. This highlights the hierarchical relationship between the issuing bank and the reimbursing bank in the context of bank-to-bank reimbursements under these rules.Get help for CDCS

• 4. Relationship with Uniform Customs and Practice for Documentary Credits: It is important to note that the URR 725 rules do not supersede or alter the provisions of the Uniform Customs and Practice for Documentary Credits (UCP). While the URR 725 specifically govern bank-to-bank reimbursements, the UCP sets out guidelines for documentary credits more broadly.• In summary, Article 1 of the URR 725 establishes the applicability of these rules to bank-to-bank reimbursements, outlines the responsibilities of the issuing bank and the reimbursing bank, and clarifies the relationship between the URR 725 and the UCP for documentary credits.Get help for CDCS

• Article 2 of the Uniform Rules for Bank-to-Bank Reimbursements under Documentary Credits (URR 725) provides definitions for key terms used within the rules. Here is an explanation of the defined terms:• 1. Issuing Bank: The issuing bank is defined as the financial institution that issues a credit and the reimbursement authorization associated with that credit. This bank plays a pivotal role in initiating the bank-to-bank reimbursement process.• 2. Reimbursing Bank: The reimbursing bank is the bank that is instructed or authorized to provide reimbursement as per the reimbursement authorization issued by the issuing bank. It is responsible for fulfilling the reimbursement obligations outlined in the authorization.• 3. Reimbursement Authorization: This term refers to an independent instruction or authorization issued by the issuing bank to the reimbursing bank. It directs the reimbursing bank to reimburse a claiming bank or, if requested, to accept and pay a time draft drawn on the reimbursing bank.• 4. Reimbursement Amendment: A reimbursement amendment is a communication from the issuing bank to the reimbursing bank that specifies changes to a previously issued reimbursement authorization. It allows for modifications to the reimbursement instructions.Get help for CDCS

• 5. Claiming Bank: The claiming bank is the financial institution that honors or negotiates a credit and submits a reimbursement claim to the reimbursing bank. This term also encompasses a bank authorized to present a reimbursement claim on behalf of the bank that honored or negotiated the credit.• 6. Reimbursement Claim: A reimbursement claim is a formal request for reimbursement made by the claiming bank to the reimbursing bank. It signifies the claiming bank's request for payment as per the terms of the reimbursement authorization.• 7. Reimbursement Undertaking: This term refers to a separate and irrevocable commitment made by the reimbursing bank to honor the reimbursement claim of the claiming bank named in the reimbursement authorization. The reimbursement undertaking is issued based on the authorization or request of the issuing bank.• 8. Reimbursement Undertaking Amendment: A reimbursement undertaking amendment is a notification from the reimbursing bank to the claiming bank named in the reimbursement authorization, detailing changes to the original reimbursement undertaking.• 9. Branches of a Bank: The rules clarify that branches of a bank located in different countries are considered separate entities for the purpose of these rules, emphasizing the distinction between branches in different jurisdictions.Get help for CDCS

• Article 3 of the Uniform Rules for Bank-to-Bank Reimbursements under Documentary Credits (URR 725) addresses the distinction between reimbursement authorizations and credits in the context of bank-to-bank reimbursements. Here is an explanation of the key points:• 1. Separation of Reimbursement Authorization and Credit: The article emphasizes that a reimbursement authorization is distinct and independent from the credit to which it relates. While a reimbursement authorization is a specific instruction or authorization issued by the issuing bank to the reimbursing bank for reimbursement purposes, the credit refers to the underlying documentary credit transaction between the parties involved.• 2. Non-Binding Nature of Credit Terms on Reimbursing Bank: The article clarifies that the reimbursing bank is not concerned with or bound by the terms and conditions of the credit, even if there is any mention or reference to the credit within the reimbursement authorization. This means that the reimbursing bank's obligations and responsibilities are solely based on the instructions provided in the reimbursement authorization and not on the terms of the credit itself.Get help for CDCS

• 3. Autonomy of Reimbursement Process: By highlighting the separation between the reimbursement authorization and the credit, Article 3 underscores the autonomy of the reimbursement process within the framework of bank-to-bank transactions. It ensures that the reimbursing bank's actions are guided by the specific instructions outlined in the reimbursement authorization, independent of the details of the credit transaction.• In summary, Article 3 of the URR 725 underscores the independence of the reimbursement authorization from the credit and clarifies that the reimbursing bank's obligations are determined solely by the instructions in the reimbursement authorization, irrespective of any references to the credit terms. This distinction helps maintain clarity and efficiency in bank-to-bank reimbursement processes under documentary credits.Get help for CDCS

• Article 4: Reimbursement Claim Honor Unless stipulated in its reimbursement undertaking, a reimbursing bank is not required to fulfill a reimbursement claim.• Article 5: Issuing Bank Responsibility The issuing bank holds the responsibility of supplying the necessary information as per the rules in both the reimbursement authorization and the credit.Get help for CDCS

• Article 6 of the Uniform Rules for Bank-to-Bank Reimbursements under Documentary Credits (URR 725) outlines the requirements for the issuance and receipt of reimbursement authorizations and reimbursement amendments. Here is an explanation of the key points outlined in this article:• 1. Form of Issuance: All reimbursement authorizations and reimbursement amendments must be issued in the form of an authenticated teletransmission or a signed letter. This ensures that the authorization or amendment is properly documented and authenticated.• 2. Operative Reimbursement Authorization: If a credit or amendment that affects the reimbursement authorization is issued by teletransmission, the issuing bank must advise the reimbursement authorization or amendment to the reimbursing bank by authenticated teletransmission. The teletransmission will be considered the operative reimbursement authorization or amendment, and any subsequent mail confirmation will be disregarded.• 3. Restrictions on Issuance: The issuing bank must not send a copy of the credit or any part thereof, or a copy of an amendment to the credit in place of or in addition to the reimbursement authorization or amendment. The issuing bank must also not send multiple reimbursement authorizations under one teletransmission or letter, unless expressly agreed to by the reimbursing bank.Get help for CDCS

• 4. Content of Reimbursement Authorization: The reimbursement authorization must include the credit number, currency and amount, additional amounts payable and tolerance (if any), claiming bank, and parties responsible for charges (claiming bank's and reimbursing bank's charges) in accordance with Article 16 of the URR 725. If the credit is available with any bank, the reimbursement authorization must indicate that claims can be made by any bank. If the reimbursing bank is requested to accept and pay a time draft, the reimbursement authorization must also indicate the tenor of the draft to be drawn, the drawer, and the party responsible for acceptance and discount charges (if any).• 5. Reimbursement Amendment: A reimbursement amendment must only state the relative changes to the reimbursement authorization and the credit number.• 6. Pre-Notification and Pre-Debit Notification: Any requirement for pre-notification of a reimbursement claim to the issuing bank must be included in the credit and not in the reimbursement authorization. Pre-debit notification to the issuing bank must be indicated in the credit.• 7. Responsibility of Reimbursing Bank: The reimbursing bank is not responsible for the consequences resulting from non-reimbursement or delay in reimbursement of reimbursement claims when any provision contained in this article is not followed by the issuing bank or claiming bank.Get help for CDCS

• Article 7 of the Uniform Rules for Bank-to-Bank Reimbursements under Documentary Credits (URR 725) addresses the expiry of a reimbursement authorization. Here is an explanation of the key points outlined in this article:• 1. Expiry Date: The reimbursement authorization should not have an expiry date or a latest date for the presentation of a claim, unless specifically agreed to by the reimbursing bank or as indicated in Article 9 of the URR 725. • 2. Responsibility for Expiry Date: The reimbursing bank is not responsible for any expiry date mentioned in the reimbursement authorization. If an expiry date is provided in the authorization, the reimbursing bank will disregard it.• 3. Cancellation of Authorization: The issuing bank must promptly cancel the reimbursement authorization for any unutilized portion of the credit to which it refers. This cancellation should be communicated to the reimbursing bank without delay. By canceling the authorization for any unused portion of the credit, the issuing bank ensures that the reimbursing bank is not obligated to honor any claims beyond the utilized amount.Get help for CDCS

• Article 8 of the Uniform Rules for Bank-to-Bank Reimbursements under Documentary Credits (URR 725) outlines the rules for amending or canceling a reimbursement authorization. Here is an explanation of the key points outlined in this article:• 1. Reimbursement Undertaking: If the issuing bank has authorized or requested the reimbursing bank to issue a reimbursement undertaking as provided in Article 9 of the URR 725, and the reimbursing bank has issued a reimbursement undertaking, then the issuing bank cannot amend or cancel the reimbursement authorization without the agreement of the reimbursing bank.• 2. Amendment or Cancellation: If the issuing bank has not authorized or requested the reimbursing bank to issue a reimbursement undertaking, then the issuing bank may issue a reimbursement amendment or cancel a reimbursement authorization at any time upon sending notice to the reimbursing bank.• 3. Notice of Amendment: If the amendment has an effect on the reimbursement instructions contained in the credit, the issuing bank must send notice of the amendment to the nominated bank or the advising bank (in the case of a credit available with any bank).•Get help for CDCS

• 4. Cancellation and New Instructions: If the reimbursement authorization is canceled prior to the expiry of the credit, the issuing bank must provide the nominated bank or the advising bank with new reimbursement instructions.• 5. Reimbursement Claims: The issuing bank must reimburse the reimbursing bank for any reimbursement claims honored or draft accepted by the reimbursing bank prior to the receipt of notice of cancellation or reimbursement amendment.• In summary, Article 8 of the URR 725 outlines the rules for amending or canceling a reimbursement authorization. It specifies that if a reimbursement undertaking has been issued, the issuing bank cannot amend or cancel the authorization without the agreement of the reimbursing bank. The article also emphasizes the importance of providing notice of any amendment to the nominated bank or advising bank, and the responsibility of the issuing bank to reimburse the reimbursing bank for any claims honored prior to the receipt of notice of cancellation or amendment.Get help for CDCS

• Article 9 of the Uniform Rules for Bank-to-Bank Reimbursements under Documentary Credits (URR 725) focuses on the requirements and provisions related to a reimbursement undertaking. • 1. Compliance Requirement: A reimbursement authorization authorizing or requesting the issuance of a reimbursement undertaking must comply with the provisions of Article 9, in addition to the requirements of sub-articles 6 (a), (b), and (c) of the URR 725.• 2. Irrevocable Reimbursement Authorization: An authorization or request by the issuing bank to the reimbursing bank to issue a reimbursement undertaking is considered irrevocable. It must contain specific details such as the credit number, currency and amount, full name and address of the claiming bank, latest date for presentation of a claim, parties responsible for charges, and more.• 3. Time Draft: If the reimbursing bank is requested to accept and pay a time draft, additional details such as the tenor of the draft, drawer, and party responsible for acceptance and discount charges must be indicated in the irrevocable reimbursement authorization.• 4. Reimbursement Undertaking Details: The reimbursement undertaking must clearly indicate the terms and conditions of the undertaking, including the credit number, currency and amount of the reimbursement authorization, additional amounts payable, latest date for presentation of a claim, reimbursement undertaking fee, and charges to be deducted by the reimbursing bank.Get help for CDCS

• 5. Extension of Claim Presentation Date: If the latest date for presentation of a claim falls on a day when the reimbursing bank is closed for reasons other than those specified in the rules, the presentation date will be extended to the next banking day.• 6. Irrevocable Nature: An irrevocable reimbursement authorization cannot be amended or canceled without the agreement of the reimbursing bank. However, if the issuing bank amends its irrevocable authorization, the reimbursing bank may amend its undertaking accordingly upon seeking consent from the claiming bank.• 7. Communication of Acceptance: Both the reimbursing bank and the claiming bank must communicate their acceptance or rejection of any amendments to the reimbursement authorization or undertaking to the respective parties.• In summary, Article 9 of the URR 725 outlines the detailed requirements for a reimbursement undertaking, emphasizing the irrevocable nature of the authorization, specific details to be included, and the communication process for any amendments or acceptances.Get help for CDCS

• Article 10 of the Uniform Rules for Bank-to-Bank Reimbursements under Documentary Credits (URR 725) sets out the standards for a reimbursement claim by the claiming bank. • 1. Form of Claim:• - The claiming bank's claim for reimbursement must be in the form of a teletransmission or an original letter, unless prohibited by the reimbursement authorization.• - If a teletransmission is used, the reimbursing bank may request authentication. If authentication is requested and not provided, the reimbursing bank is not liable for any delays incurred.• - Duplicate reimbursement claims resulting from sending a mail confirmation for a teletransmission claim will be the responsibility of the claiming bank.2. Information Required:• - The reimbursement claim must clearly indicate the credit number, the issuing bank, and the reimbursing bank's reference number if known.• - It must separately specify the principal amount claimed, any additional amounts due, and charges.• - The claim should not be a copy of the claiming bank's advice of payment, deferred payment, acceptance, or negotiation to the issuing bank.• - Multiple reimbursement claims should not be included in a single teletransmission or letter.• - In the case of a reimbursement undertaking, the claim must comply with the terms and conditions of the undertaking.Get help for CDCS

• 3. Requirements for Time Draft:• - If a time draft is to be drawn on the reimbursing bank, the claiming bank must submit the draft with the reimbursement claim.• - The claim should include a general description of the goods, services, or performance, country of origin, place of destination or performance, date of shipment, and place of shipment for merchandise transactions.•• 4. Liability of Reimbursing Bank:• - The reimbursing bank assumes no liability or responsibility for any consequences arising from non-acceptance or processing delays if the claiming bank fails to adhere to the provisions of Article 10.•• In summary, Article 10 of the URR 725 outlines the specific requirements and standards that the claiming bank must follow when submitting a reimbursement claim to the reimbursing bank. Adherence to these standards ensures smooth processing and minimizes the risk of errors or delays in the reimbursement processGet help for CDCS

• Article 11 of the Uniform Rules for Bank-to-Bank Reimbursements under Documentary Credits (URR 725) details the procedures and responsibilities involved in processing a reimbursement claim by the reimbursing bank. Here is an explanation of the key points outlined in this article:• 1. Processing Time:• - The reimbursing bank is required to process a reimbursement claim within a maximum of three banking days from the day of receipt. If a claim is received outside banking hours, it is considered received on the next banking day.• - If a pre-debit notification is mandated by the issuing bank, the notification period is in addition to the three-day processing period.• 2. Non-Reimbursement Notification:• - If the reimbursing bank decides not to reimburse due to a non-conforming claim or any other reason, it must notify the claiming bank and the issuing bank by the close of the third banking day following the receipt of the claim. The notification should include reasons for non-payment, especially in the case of a reimbursement undertaking.• 3. Back Value Requests:• - The reimbursing bank will not process requests for back value (value dating prior to the reimbursement claim date) from the claiming bank.Get help for CDCS

• 4. Future Dated Reimbursements:• - If a reimbursement is due on a future date and no reimbursement undertaking has been issued, the reimbursement claim must specify the predetermined reimbursement date.• - The claim should not be presented to the reimbursing bank more than ten banking days before the predetermined date. If presented earlier, the bank may disregard the claim and must inform the claiming bank promptly.• - If the predetermined reimbursement date is more than three banking days after the claim's receipt, the reimbursing bank is not obligated to provide notice of non-reimbursement until that date or the third banking day following the claim's receipt, whichever is later.• 5. Reimbursement Conditions:• - Unless agreed otherwise, the reimbursing bank will only effect reimbursement to the claiming bank.• - The reimbursing bank is not liable if it honors a reimbursement claim indicating payment, acceptance, or negotiation made under reserve or against an indemnity.•• In summary, Article 11 of the Uniform Rules for Bank-to-Bank Reimbursements under Documentary Credits (URR 725) details the procedures and responsibilities involved in processing a reimbursement claim by the reimbursing bank. Here is an explanation of the key points outlined in this articleGet help for CDCS

• Article 12 of the Uniform Rules for Bank-to-Bank Reimbursements under Documentary Credits (URR 725) addresses the issue of duplication of a reimbursement authorization. Here is an explanation of the key points outlined in this article:• 1. Prohibition of Duplicate Reimbursement Authorization:• - The issuing bank is prohibited from providing a new reimbursement authorization or additional instructions upon receiving documents unless they serve as an amendment to or cancellation of an existing reimbursement authorization.• 2. Responsibility for Duplicate Reimbursement:• - If the issuing bank fails to adhere to the prohibition and a duplicate reimbursement is processed, it is the responsibility of the issuing bank to recover the amount of the duplicate reimbursement.• 3. Reimbursing Bank's Liability:• - The reimbursing bank bears no liability or responsibility for any consequences arising from such duplication. The onus is on the issuing bank to rectify the situation and recover any duplicated amounts.Get help for CDCS

• Article 13 of the Uniform Rules for Bank-to-Bank Reimbursements pertains to foreign laws and usages in bank transactions. Here is an explanation of the key points:• The article specifies that the issuing bank is obligated to adhere to and be responsible for indemnifying the reimbursing bank against all obligations and responsibilities imposed by foreign laws and usages.• In international transactions, different countries may have varying laws and customs that govern banking practices and transactions. The issuing bank, which initiates the reimbursement process, must comply with these foreign laws and usages.• By agreeing to indemnify the reimbursing bank, the issuing bank assumes the responsibility for any legal or regulatory requirements imposed by the foreign jurisdiction where the transaction takes place. This ensures that the reimbursing bank is protected from any legal consequences arising from non-compliance with foreign laws and usages.• The provision in Article 13 underscores the importance of understanding and adhering to the legal frameworks and customary practices of the foreign jurisdictions involved in bank-to-bank reimbursement transactionsGet help for CDCS

• Article 14 of the Uniform Rules for Bank-to-Bank Reimbursements addresses the disclaimer on the transmission of messages in bank transactions. Here is an explanation of the key points:• The article states that a reimbursing bank is not liable or responsible for any consequences that result from delays, loss in transit, mutilation, or other errors in the transmission of messages, delivery of letters, or documents.• This disclaimer applies when the messages, letters, or documents are transmitted or sent in accordance with the requirements specified in the credit, reimbursement authorization, or reimbursement claim.• Additionally, the reimbursing bank is not held accountable for errors in translation or interpretation of technical terms that may occur during the transmission process.• The article also mentions that if the bank takes the initiative in choosing the delivery service in the absence of specific instructions in the credit, reimbursement authorization, or reimbursement claim, it still assumes no liability for any transmission-related issues.• Overall, Article 14 establishes that the reimbursing bank is not responsible for transmission-related errors or issues as long as the messages are sent according to the specified requirements. This provision helps clarify the bank's responsibilities regarding the transmission of messages and documents in bank-to-bank reimbursement transactions.Get help for CDCS

• Article 15 of the Uniform Rules for Bank-to-Bank Reimbursements addresses the concept of force majeure in bank transactions. Here is an explanation of the key points:• Force majeure refers to unforeseeable circumstances that prevent a party from fulfilling its obligations under a contract due to events beyond its control.• In this context, Article 15 specifies that a reimbursing bank is not held liable or responsible for any consequences that arise from the interruption of its business caused by events such as Acts of God (natural disasters), riots, civil commotions, insurrections, wars, acts of terrorism, strikes, lockouts, or any other causes beyond its control.• This provision acknowledges that certain events or circumstances may occur that are outside the control of the reimbursing bank and may prevent it from fulfilling its obligations in a bank-to-bank reimbursement transaction.• By including a force majeure clause, the rules provide a level of protection for the reimbursing bank in situations where it is unable to perform its duties due to extraordinary and unforeseen events.Get help for CDCS

• Article 16 of the Uniform Rules for Bank-to-Bank Reimbursements outlines the rules regarding charges in bank-to-bank reimbursement transactions. Here is an explanation of each point:• a. The charges of the reimbursing bank are to be borne by the issuing bank. This means that any fees or costs incurred by the reimbursing bank in processing the reimbursement claim will be the responsibility of the issuing bank.• b. When the reimbursing bank honors a reimbursement claim, it must adhere to the instructions regarding charges specified in the reimbursement authorization. This ensures that any charges are handled according to the agreed-upon terms.• c. If the reimbursement authorization states that the charges of the reimbursing bank are to be paid by the beneficiary (claiming bank), then these charges will be deducted from the amount due to the claiming bank when the reimbursement is made. If the reimbursing bank follows the issuing bank's instructions on charges and they are not paid or a reimbursement claim is not presented, the issuing bank remains liable for these charges.• d. Any charges paid by the reimbursing bank will be in addition to the authorized amount. The claiming bank must specify the amount of such charges to ensure transparency in the reimbursement process.Get help for CDCS

• e. If the issuing bank does not provide instructions regarding charges to the reimbursing bank, then all charges will be the responsibility of the issuing bank. This emphasizes the importance of clear communication and instruction between the parties involved in the reimbursement transaction to avoid any misunderstandings or disputes regarding charges.• Overall, Article 16 ensures that charges related to bank-to-bank reimbursements are handled in a clear and accountable manner, with the issuing bank typically bearing the responsibility for these charges unless specified otherwise in the reimbursement authorizationGet help for CDCS

• Article 17 of the Uniform Rules for Bank-to-Bank Reimbursements states that any claims for loss of interest or loss of value due to exchange rate fluctuations, revaluations, or devaluations are the responsibility of the claiming bank and the issuing bank to resolve. However, if these losses occur as a result of the reimbursing bank's failure to fulfill its obligations under a reimbursement undertaking, then the reimbursing bank may be held accountable for compensating the claiming bank for such losses.•Get help for CDCS