dear all,
we all know that a credit available by negotiation need not to have any reimbursement instruction. is it then necessary to give a reference to URR in the LC along with the UCP?
Reference of URR in negotiable credit
- picant
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- Joined: Wed Aug 20, 2008 1:49 pm
URR725
Hi Pal,
in a L/C available by negotiation is not necessary to indicate a reimboursing bank as the negotiating bank will request the issuing bank to provide cover. However in URR725 art. 2 e Claiming bank, it is indicated "bank which NEGOTIATES " and SWIFT MT740 in field 58 a required : Negotiating Bank (pls check new issue). So , IMHO, this is an opportunity as l/c could be confirmed too and in case of negotiation at XX days it is a common way to obtain reimbursement, specially in l/c issued in a foreign currency for both issuing and negotiating bank.
Other comments appreciated
Ciao
in a L/C available by negotiation is not necessary to indicate a reimboursing bank as the negotiating bank will request the issuing bank to provide cover. However in URR725 art. 2 e Claiming bank, it is indicated "bank which NEGOTIATES " and SWIFT MT740 in field 58 a required : Negotiating Bank (pls check new issue). So , IMHO, this is an opportunity as l/c could be confirmed too and in case of negotiation at XX days it is a common way to obtain reimbursement, specially in l/c issued in a foreign currency for both issuing and negotiating bank.
Other comments appreciated
Ciao
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- Posts: 504
- Joined: Thu Jun 26, 2008 10:33 pm
great insight
great insight dear picant. i never noticed that. will join u all tomorrow
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- Posts: 504
- Joined: Thu Jun 26, 2008 10:33 pm
practice vs theory
to answer the original question, there is no requirement for a negotiation lc to have a reference of URR. to be more accurate, even LCs which are available only at the counter of issuing bank need not to have a reference of URR.
dear picant, i have checked the swift book. to be honest, im still to figure out why swift define 58a only as a negotiating bank. there is no reference of nominated bank. anyway, i fully agree with your xx day theory
dear picant, i have checked the swift book. to be honest, im still to figure out why swift define 58a only as a negotiating bank. there is no reference of nominated bank. anyway, i fully agree with your xx day theory