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Uniform Rules for Bank-to-Bank Reimbursements under Documentary Credits (URR 725)

A. GENERAL PROVISIONS AND DEFINITIONS

ARTICLE 1 – APPLICATION OF URR
The Uniform Rules for Bank-to-Bank Reimbursements under Documentary Credits (“rules”), ICC Publication No. 725, shall apply to any bank-to-bank reimbursement when the text of the reimbursement authorization expressly indicates that it is subject to these rules.

They are binding on all parties hereto, unless expressly modified or excluded by the reimbursement authorisation.

The issuing bank is responsible for indicating in the documentary credit (“credit”) that reimbursement is subject to these rules.

In a bank-to-bank reimbursement subject to these rules, the reimbursing bank acts on the instructions and under the authority of the issuing bank.

These rules are not intended to override or change the provisions of the Uniform Customs and Practice for Documentary Credits.


ARTICLE 2 – DEFINITIONS
For the purpose of these rules, the following terms shall have the meaning specified in this article and may be used in the singular or plural as appropriate:

1. “Issuing bank” means the bank that has issued a credit and the reimbursement authorization under that credit.


2. “Reimbursing bank” means the bank instructed or authorised to provide reimbursement pursuant to a reimbursement authorisation issued by the issuing bank.


3. “Reimbursement authorisation” means an instruction or authorization, independent of the credit, issued by an issuing bank to a reimbursing bank to reimburse a claiming bank or, if so, requested by the issuing bank, to accept and pay a time draft drawn on the reimbursing bank.


4. “Reimbursement amendment” means an advice from the issuing bank to a reimbursing bank stating changes to a reimbursement authorisation.


5. “Claiming bank” means a bank that honours or negotiates a credit and presents a reimbursement claim to the reimbursement bank. “Claiming bank” includes a bank authorised to present a reimbursement claim to the reimbursing bank on behalf of the bank that honours or negotiates.


6. “Reimbursement claim” means a request for reimbursement from the claiming bank to the reimbursing bank.


7. “Reimbursement undertaking” means a separate irrevocable undertaking of the reimbursing bank, issued upon the authorisation or request of the issuing bank, to the claiming bank named in the reimbursement authorisation, to honour that bank’s reimbursement claim, provided the terms and conditions of the reimbursement undertaking have been complied with.


8. “Reimbursement undertaking amendment” means an advice from the reimbursing bank to the claiming bank named in the reimbursement authorisation stating changes to the reimbursement undertaking.
9. For the purposes of these rules, branches of a bank in different countries are considered to be separate banks.

ARTICLE 3 – REIMBURSEMENT AUTHORISATIONS VERSUS CREDITS
A reimbursement authorisation is separate from the credit to which it refers, and a reimbursing bank is not concerned with or bound by the terms and conditions of the credit, even if any reference whatsoever to it is included in the reimbursement authorisation.



B. LIABILITIES AND RESPONSIBILITIES

ARTICLE 4 – HONOUR OF A REIMBURSEMENT CLAIM
Except as provided by the terms of its reimbursement undertaking, a reimbursing bank is not obligated to honour a reimbursement claim.


ARTICLE 5 – RESPONSIBILITY OF THE ISSUING BANK
The issuing bank is responsible for providing the information required in these rules in both the reimbursement authorisation and the credit and is responsible for any consequences resulting from non-compliance with this provision.



C. FORM AND NOTIFICATION OF AUTHORISATIONS, AMENDMENTS AND CLAIMS

ARTICLE 6 – ISSUANCE AND RECEIPT OF A REIMBURSEMENT AUTHORISATION OR REIMBURSEMENT AMENDMENT

1. All reimbursement authorisations and reimbursement amendments must be issued in the form of an authenticated tele-transmission or a signed letter.
   
   When a credit or amendment thereto which has an effect on the reimbursement authorisation is issued by tele-transmission, the issuing bank should advice its reimbursement authorisation or reimbursement amendment to the reimbursing bank by authenticated tele-transmission.
   
   The tele-transmission will be deemed the operative reimbursement authorisation or reimbursement amendment, and any subsequent mail confirmation shall be disregarded.



2. An issuing bank must not send to a reimbursing bank:
1. 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 authorisation or reimbursement amendment. If such copies are received by the reimbursing bank, they shall be disregarded.
2. Multiple reimbursement authorisations under one tele-transmission or letter, unless expressly agreed to by the reimbursing bank.



3. An issuing bank shall not require a certificate of compliance with the terms and conditions of the credit in the reimbursement authorisation.



4. A reimbursement authorisation must (in addition to the requirement of Article 1 for incorporating of reference to these rules) state the following:
   1. Credit number;
   2. Currency and amount;
   3. Additional amounts payable and tolerance, if any;
   4. Claiming bank or, in the case of a freely available credit, that claims can be made by any bank. In the absence of any such indication, the reimbursing bank is authorised to pay any claiming bank;
   5. Parties responsible for charges (claiming bank’s and reimbursing bank’s charges) in accordance with Article 16 of these rules.
   
   A reimbursement amendment must state only the relative changes to the above and the credit number.
   
   
   
5. If the reimbursing bank is requested to accept and pay a time draft, the reimbursement authorisation must indicate the following, in addition to the information specified in (d) above:
   
   1. Tenor of draft to be drawn;
   2. Drawer;
   3. Party responsible for acceptance and discount charges, if any.
   
   A reimbursement amendment must state the relative changes to the above.
   An issuing bank should not require a sight draft to be drawn on the reimbursing bank.
   
   
   
6. Any requirement for:
1. Pre-notification of a reimbursement claim to the issuing bank must be included in the credit and not in the reimbursement authorisation.
2. Pre-debit notification to the issuing bank must be indicated in the credit.



7. If the reimbursing bank is not prepared to act for any reason whatsoever under the reimbursement authorisation or reimbursement amendment, it must so inform the issuing bank without delay.



8. In addition to the provisions of Article 3 and 4, the reimbursing bank is not responsible for the consequences resulting from non-reimbursement or delay in reimbursement of reimbursement claims when a provision contained in this article is not followed by the issuing bank or claiming bank.

ARTICLE 7 – EXPIRY OF A REIMBURSEMENT AUTHORISATION
Except to the extent expressly agreed to by the reimbursing bank, the reimbursement authorisation should not be subject to any expiry date or latest date for presentation of a claim, except as indicated in Article 9.

A reimbursing bank will assume no responsibility for the expiry date of a credit and, if such date is provided in the reimbursement authorisation, it will be disregarded.

The issuing bank must cancel its reimbursement authorisation for any unutilised portion of the credit to which it refers, informing the reimbursing bank without delay.


ARTICLE 8 – AMENDMENT OR CANCELLATION OF A REIMBURSEMENT AUTHORISATION
Except where the issuing bank has authorised or requested the reimbursing bank to issue a reimbursement undertaking as provided in Article 9 and the reimbursing bank has issued a reimbursement undertaking:

1. The issuing bank may issue a reimbursement amendment or cancel a reimbursement authorisation at any time upon sending notice to that effect to the reimbursing bank.


2. The issuing bank must send notice of any amendment to a reimbursement authorisation that has an effect on the reimbursement instructions contained in the credit to the nominated bank or, in the case of a freely available credit, the advising bank.
In case of cancellation of the reimbursement authorisation prior to expiry of the credit, the issuing bank must provide the nominated bank or the advising bank with new reimbursement instructions.


3. The issuing bank must reimburse the reimbursing bank for any reimbursement claims honoured or draft accepted by the reimbursing bank prior to the receipt by it of a notice of cancellation or reimbursement amendment.

ARTICLE 9 – REIMBURSEMENT UNDERTAKING

1. In addition to the requirements of sub-articles 6(a), (b) and (c) of these rules, a reimbursement authorisation authorising or requesting the issuance of a reimbursement undertaking must comply with the provisions of this article.


2. An authorisation or request by the issuing bank to the reimbursing bank to issue a reimbursement undertaking is irrevocable (“irrevocable reimbursement authorisation”) and must (in addition to the requirement of Article 1 for incorporation of reference to these rules) contain the following:
1. Credit number;
2. Currency and amount;
3. Additional amounts payable and tolerance, if any;
4. Full name and address of the claiming bank to which the reimbursement undertaking should be issued;
5. Latest date for presentation of a claim, including any usance period;
6. Parties responsible for charges
(Claiming bank’s and reimbursement bank’s charges and reimbursement undertaking fee) in accordance with Article 16 of these rules.


3. If the reimbursing bank is requested to accept and pay a time draft, the irrevocable reimbursement authorisation must also indicate the following, in addition to the information contained in (b) above:
1. Tenor of draft to be drawn
2. Drawer;
3. Drawee of draft, if other than the reimbursing bank;
4. Party responsible for acceptance and discounting charges, if any.
An issuing bank should not require a sight draft to be drawn on the reimbursing bank.


4. If the reimbursing bank is authorised or requested by the issuing bank to issue its reimbursement undertaking to the claiming bank but is not prepared to do so, it must so inform the issuing bank without delay.


5. A reimbursement undertaking must indicate the terms and conditions of the undertaking and:
1. The credit number and name of the issuing bank;
2. The currency and amount of the reimbursement authorisation;
3. Additional amounts payable and tolerance, if any;
4. The currency and amount of the reimbursement undertaking;
5. The latest date for presentation of a claim, including any usance period;
6. The party to pay the reimbursement undertaking fee, if other than the issuing bank.
The reimbursement bank must also include its charges, if any that will be deducted from the amount claimed.


6. If the latest date for presentation of a claim falls on a day when the reimbursing bank is closed for reasons other than those referred to in Article 15, the latest date for presentation of a claim will be extended to the first following banking day.


7. A reimbursement bank is irrevocably bound to honour a reimbursement claim as of the time it issues the reimbursement undertaking.


8. Others
1. An irrevocable reimbursement authorisation cannot be amended or cancelled without the agreement of the reimbursing bank.
2. When an issuing bank has amended its irrevocable reimbursement authorisation, a reimbursing bank that has issued its reimbursement undertaking may amend its undertaking to reflect such amendment.
   If a reimbursing bank chooses not to issue its reimbursement undertaking amendment, it must so inform the issuing bank without delay.
3. An issuing bank that has issued its irrevocable reimbursement authorisation amendment shall be irrevocably bound as of the time of its advice of the irrevocable reimbursement authorisation amendment.
4. The terms of the original irrevocable reimbursement authorisation (or an authorisation incorporating previously accepted irrevocable reimbursement authorisation amendments) will remain in force for the reimbursing bank until it communicates its acceptance of the amendment to the issuing bank.
5. A reimbursing bank must communicate its acceptance or rejection of an irrevocable reimbursement authorisation amendment to the issuing bank.
A reimbursing bank is not required to accept or reject an irrevocable reimbursement authorisation amendment until it has received acceptance or rejection from the claiming bank of its reimbursement undertaking amendment.
1. A reimbursement undertaking cannot be amended or cancelled without the agreement of the claiming bank.
2. A reimbursement bank is irrevocably bound as of the time it issues the reimbursement undertaking amendment.
3. The terms of the original reimbursement undertaking (or a reimbursement undertaking incorporating previously accepted reimbursement amendments) will remain in force for the claiming bank until it communicates its acceptance of the reimbursements undertaking amendments to the reimbursing bank.
4. A claiming bank must communicate its acceptance or rejection of a reimbursement undertaking amendment to the reimbursing bank.

ARTICLE 10 – STANDARDS FOR A REIMBURSEMENT CLAIM

1. The claiming bank’s claim for reimbursement:
1. Must be in the form of a tele-transmission, unless specifically prohibited by the reimbursement authorisation or an original letter.
   A reimbursement bank has the right to request that a reimbursement claim be authenticated, and, in such case, the reimbursing bank shall not be liable for any consequences resulting from any delay incurred.
   If a reimbursement claim is made by tele-transmission, no mail confirmation is to be sent. In the event such a mail confirmation is sent, the claiming bank will be responsible for any consequences that may arise from a duplicate reimbursement.
2. Must clearly indicate the credit number and the issuing bank (and reimbursing bank’s reference number, if known);
3. Must separately stipulate the principal amount claimed, any additional amount due and charges;
4. Must not be a copy of the claiming bank’s advice of payment, deferred payment, acceptance or negotiation to the issuing bank;
5. Must not include multiple reimbursement claims under one tele-transmission or letter;
6. Must, in the case of a reimbursement undertaking, comply with the terms and conditions of the reimbursement undertaking.


2. When a time draft is to be drawn on the reimbursement bank, the claiming bank must forward the draft with the reimbursement claim to the reimbursement bank for processing and include, where appropriate, the following in its claim:
1. General description of the goods, services or performance;
2. Country of origin;
3. Place of destination or performance and if the transaction covers the shipment of merchandise;
4. Date of shipment;
5. Place of shipment;


3. A reimbursing bank assumes no liability or responsibility for any consequences that may arise out of any non-acceptance or delay of processing should the claiming bank fail to follow the provisions of this article.

ARTICLE 11 – PROCESSING A REIMBURSEMENT CLAIM

1. A reimbursing bank shall have a maximum of three banking days following the day of receipt of the reimbursement claim to process the claim.
   A reimbursement claim received outside banking hours will be deemed to be received on the next following banking day.
   If a pre-debit notification is required by the issuing bank, this pre-debit notification period shall be in addition to the processing period mentioned above.


2. If the reimbursing bank determines not to reimburse, either because of a non-conforming claim under a reimbursement undertaking or for any reason whatsoever under a reimbursement authorisation, it shall give notice to that effect by tele-communication or, if that is not possible, by other expeditious means, no later than the close of the third banking day following the day of receipt of the claim (plus any additional period mentioned in sub-article (i) above).
   Such notice shall be sent to the claiming bank and the issuing bank and, in the case of a reimbursement undertaking, it must state the reasons for non-payment of the claim.


2. A reimbursement bank will not process a request for back value (value dating prior to the date of a reimbursement claim) from the claiming bank.


3. When a reimbursing bank has not issued a reimbursement undertaking and a reimbursement is due on a future date.
1. The reimbursement claim must specify the predetermined reimbursement date;
2. The reimbursement claim should not be presented to the reimbursing bank more than ten banking days prior to such predetermined date.
   If a reimbursement claim is presented more than ten banking days prior to the predetermined date, the reimbursing bank may disregard the reimbursement claim.
   If the reimbursing bank disregards the reimbursement claim, it must so inform the claiming bank by teletransmission or other expeditious means without delay.
3. If the predetermined reimbursement date is more than three banking days following the day of receipt of the reimbursement claim, the reimbursing bank has no obligation to provide notice of non­ reimbursement until such predetermined date, or no later than the dose of the third banking day following the receipt of the reimbursement claim plus any additional period mentioned in (a) (i) above, whichever is later.


4. Unless otherwise expressly agreed to by the reimbursing bank and the claiming bank; a reimbursing bank will effect reimbursament under a reimbursement claim only to the claiming bank.


5. A reimbursing bank assumes no liability or responsibility if it honors a reimbursement claim indicating that a payment, acceptance or negotiation was made under reserve or against an indemnity, and shall disregard such indication.

ARTICLE 12 - DUPLICATION OF A REIMBURSEMENT AUTHORIZATION

An issuing bank must not, upon receipt of documents, give a new reimbursement authorization or additional instructions unless they constitute an amendment to, or a cancellation of, an existing reimbursement authorization.

If the issuing bank does not comply with the above and a duplicate reimbursement is made, it is the responsibility of the issuing bank to obtain the return of the amount of the duplicate reimbursement.

The reimbursing bank assumes no liability or responsibility for any consequences that may arise from any such duplication.



ARTICLE 13 - FOREIGN LAWS AND USAGES

The issuing bank shall be bound by and liable to indemnify the reimbursing bank against all obligations and responsibilities imposed by foreign laws and usages.



ARTICLE 14-DISCLAIMER ON THE TRANSMISSION OF MESSAGES

A reimbursing bank assumes no liability or responsibility for the consequences arising out of delay, loss in transit, mutilation or other errors arising in the transmission of any messages, delivery of letters or documents, when such messages, letters or documents are transmitted or sent according to the requirements stated in the credit, reimbursement authorization or reimbursement claim, or when the bank may have taken the initiative in the choice of the delivery service in the absence of such instructions in the credit, reimbursement authorization or reimbursement claim.

A reimbursing bank assumes no liability or responsibility for errors in translation or interpretation of technical terms.



ARTICLE 15 - FORCE MAJEURE

A reimbursing bank assumes no liability or responsibility for the consequences arising out of the interruption of its business by Acts of God, riots, civil commotions, insurrections, wars, acts of terrorism or by any strikes or lockouts or any other causes beyond its control.



ARTICLE 16 - CHARGES

1. A reimbursing bank's charges are for the account of the issuing bank.
2. When honouring a reimbursement claim, a reimbursing bank is obligated to follow the instructions regarding any charges contained in the reimbursement authorization
3. If a reimbursement authorization states that the reimbursing bank's charges are for the account of the beneficiary, they shall be deducted from the amount due to a claiming bank when reimbursement is made.
   When a reimbursing bank follows the instructions of the issuing bank regarding charges (including commissions, fees, costs or expenses) and these charges are not paid, or a reimbursement claim is never presented to the reimbursing bank under the reimbursement authorization, the issuing bank remains liable for such charges.
4. All charges paid by the reimbursing bank will be in addition to the amount of the authorization, provided that the claiming bank indicates the amount of such charges.
5. If the issuing bank fails to provide the reimbursing bank with instructions regarding charges, all charges shall be for the account of the issuing bank.

ARTICLE 17-INTEREST CLAIMS/LOSS OF VALUE

Any claim for loss of interest, loss of value due to any exchange rate fluctuations, revaluations or devaluations are between the claiming bank and the issuing bank, unless such losses result from the non-performance of the reimbursing bank under a reimbursement undertaking.

URR EXPLANATION

PRINCIPAL FEATURES
The Issuing Bank is responsible for indicating in the Documentary Credit that Reimbursement Claims are subject to URR
In a bank-to-bank reimbursement the Reimbursing Bank acts on the instructions and/or under the authority of the Issuing Bank


PARTIES TO THE REIMBURSEMENT

• Issuing Bank (IB)
• Reimbursing Bank(RB)
• Claiming Bank (CB)

DOCUMENTS RELATED TO REIMBURSEMENT

• Reimbursement Authorization(RA)
• Reimbursement Amendment
• Reimbursement Claim(RC)
• Reimbursement Undertaking(RU)
• Reimbursement Undertaking Amendment

REIMBURSEMENT AUTHORISATION VS CREDITS
RA is separate from the Credit to which it refers, and RB is not concerned with or bound by the· terms and conditions of the credit, even if any reference whatsoever to the terms and conditions of the credit is included in the RA.


REIMBURSEMENT AUTHORISATION (RA)
RA to be issued in the form of an authenticated tele-transmission.

This would be taken as operative instrument and no mail confirmation should be sent.

RA must be complete and precise.

The Issuing Bank should not send to RB (Reibursing Bank) a copy of the Credit or any part thereof or a copy of an amendment to the Credit in addition to RA.

RA should contain­:

1. Credit Number
2. Currency & Amount
3. Additional arnounts payable & tolerance if any
4. Claiming Bank's full name & address or in case of freely negotiable credits, claims can be made by any bank. In the absence of any such indication, RB is authorized to pay to any claiming bank.
5. Parties responsible for charges (CB's & RB's charges)
6. If RB is requested to accept and pay a time draft(s) then RA must indicate­
   • Tenor of draft(s) to be drawn
   • Drawer
   • Party responsible for acceptance & discount charges if any
7. Issuing Bank shoulq not require a sight draft(s) to be drawn on RB
8. Unless & otherwise agreed by RB, RA must not have an expiry date or latest date for presentation of claim except under a draft in the case of a Reimbursement Undertaking

AMENDMENT OR CANCELLATION

• This can not be done where Issuing bank has authorised RB to issue RU and the RB has issued the same.
• The 18 may issue a Reimbursement Amendment or cancel a RA at any time upon sending notice to that effect to RB
• In the case of amendment of RA, RB should send notice to the nominated bank or advising bank.
• In case of cancellation of RA before expiry of Credit, new reimbursement instructions to be provided by IB to nominated or advising bank
• Prior to the receipt of notice of cancellation, if RB has honoured the reimbursement claims or accepted the drafts, then IB must reimburse the RB
• An irrevocable RA (to issue RU) can not be amended or cancelled without agreement of RB
• If 18 has amended the irrevocable RA, RB may/may not amend the RU. If it does not it has to inform the IB without delay.
• The terms of original irrevocable RA will remain in force for RB until it communicates its acceptance of the amendment to the 18.
• A RB is not required to accept or reject an irrevocable RA amendment until it has received acceptance/rejection from the Claiming Bank to its RU
• After receiving the gesture from claiming bank it should communicate accordingly to IB.

REIMBURSEMENT UNDERTAKINGS (RU)
An authorisation or request by the IB to RB to issue a RU is irrevocable
RU must indicate the terms and conditions of undertaking and also the following:

• Credit number & Issuing Bank
• Currency & amount of RA
• Additional amounts payable & tolerance if any
• Ccy & amt of Reimbursement Undertaking
• Latest date for presentation of a claim including any usance period
• Party to pay the RU fee if other than the IB. Charges if any, that will be deducted from the amt should also be mentioned

AMENDMENT AND CANCELLATION OF RU
RU can not be amended or cancelled without the agreement of the Claiming Bank.
RB which has issued the RU amendment shall be irrevocably bound as of the time of its advice of the RU amendment.
The terms cf the original RU will remain in force for the Claiming Bank until it communicates its acceptance of the RU amendment to RB
A Claiming Bank must communicate its acceptance or rejection of A RU amendment to the RB.


STANDARDS FOR REIMBURSEMENT CLAIMS
RC must be in the form of tele-transmission unless prohibited by the IB or an original letter.
If tele-transmission is used then no mail confirmation to be sent. RB will not be responsible for duplicate payment
RB has the right to request that the RC must be authenticated.
Must Clearly state the Credit Number and issuing bank & RB Reference no. if any.


STANDARDS FOR REIMBURSEMENT CLAIMS
Principal Amount and Any Additional Amounts must not include multiple RCs in one message


PROCESSING REIMBURSEMENT CLAIMS
Three banking days following the day of receipt Pre-debit notification period, if any, to be considered
Notice to CB and IB in case claim cannot be honored. No Back Value Claims
RC should not be presented to RB more than 10 of its Banking days prior to the predetermined date


REIMBURSEMENT CHARGES
Indicate in RA and Credit
Liability of the instructing party (IB)

END OF MY NOTES