Uniform Rules for Bank-to-Bank Reimbursements (URR 725)

Comprehensive practice questions covering the definitions, responsibilities, and procedural requirements of the Uniform Rules for Bank-to-Bank Reimbursements (URR 725).

What is the official designation and publication number for the Uniform Rules for Bank-to-Bank Reimbursements?

ICC Publication No. 725 (URR 725).

Under what condition do the URR 725 rules apply to a bank-to-bank reimbursement?

They apply when the text of the reimbursement authorization expressly indicates that it is subject to these rules.

Who is responsible for indicating that a documentary credit is subject to URR 725?

The issuing bank.

Define 'Issuing bank' according to Article 2 of URR 725.

The bank that has issued a credit and the reimbursement authorization under that credit.

Define 'Reimbursing bank' according to Article 2 of URR 725.

The bank instructed or authorized to provide reimbursement pursuant to a reimbursement authorization issued by the issuing bank.

What is a 'Reimbursement authorization'?

An instruction or authorization, independent of the credit, issued by an issuing bank to a reimbursing bank to reimburse a claiming bank or to accept and pay a time draft.

What does the term 'Claiming bank' encompass?

A bank that honours or negotiates a credit and presents a reimbursement claim, including a bank authorized to present a claim on behalf of the bank that honours or negotiates.

How does Article 2 treat branches of a bank located in different countries?

They are considered to be separate banks.

What is the relationship between a reimbursement authorization and the credit it refers to?

The reimbursement authorization is separate from the credit; the reimbursing bank is not concerned with or bound by the terms and conditions of the credit.

According to Article 4, when is a reimbursing bank obligated to honour a reimbursement claim?

Only as provided by the terms of its reimbursement undertaking; otherwise, it is not obligated.

What are the required forms for issuing all reimbursement authorizations and amendments?

An authenticated teletransmission or a signed letter.

What should a reimbursing bank do if it receives a copy of the credit instead of a reimbursement authorization?

It shall disregard the copy of the credit.

What five specific details must a reimbursement authorization state according to Article 6(d)?

i. credit number; ii. currency and amount; iii. additional amounts payable and tolerance; iv. claiming bank; v. parties responsible for charges.

If a reimbursing bank is not prepared to act under an authorization, what is its obligation?

It must inform the issuing bank without delay.

Except for agreements under Article 9, should a reimbursement authorization have an expiry date?

No, it should not be subject to an expiry date or latest date for presentation of a claim.

What is a 'Reimbursement undertaking'?

A separate irrevocable undertaking of the reimbursing bank, issued at the request of the issuing bank, to honour a claiming bank's claim provided terms are met.

When is a reimbursing bank irrevocably bound by a reimbursement undertaking?

As of the time it issues the reimbursement undertaking.

Can a reimbursement undertaking be amended without the agreement of the claiming bank?

No, it cannot be amended or cancelled without the agreement of the claiming bank.

What information must a claiming bank forward if a time draft is drawn on the reimbursing bank?

The draft, general description of goods/services, country of origin, place of destination, and (for merchandise) date and place of shipment.

What is the maximum processing time for a reimbursement claim?

A maximum of three banking days following the day of receipt of the claim.

What is the policy regarding requests for 'back value' dating?

A reimbursing bank will not process a request for value dating prior to the date of a reimbursement claim.

Who is responsible for retrieving a duplicate reimbursement if the issuing bank fails to follow duplication rules?

The issuing bank.

Who is liable for a reimbursing bank's charges if the issuing bank provides no instructions?

The issuing bank.

According to Article 17, who handles claims for loss of interest or loss of value due to exchange rate fluctuations?

The claiming bank and the issuing bank, unless the loss results from the non-performance of the reimbursing bank under an undertaking.