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Hi,

My customer would be opening a 90 days LC, which I would be getting "discounted" from the "advising bank" (which is also my bank). I was wondering, if as the beneficiary I should use "UCP Latest version" or "UCP URR Latest Version" in 40E to best protect my interest and what is the difference between the two?

As I am getting this discounted and is there any benefit of using UCP Urr latest version?

Thanks

Hi,

URR is the rules for reimbursement. It is not optional to use UCP URR or UCP for an l/c, UCP URR will be used if there is a reimbursement bank.

But If you mean whether your LC should be confirmed or not, than it can be better, you can discount a few days earlier without awaiting acceptance from applicant's bank. Eventhough, your lc is confirmed, There may not be a reimbursement bank.

Regards.

SWIFT MT 700 has specific provision for UCP Latest Version or UCPURR Latest Version. If you choose UCP latest version, Article 13 of UCP would be applicable. if you choose UCPURR Latest version, URR would be applicable.

Hi,

Coming to a fairly old post here as I understand the processes a bit better now.

URR is the rules for reimbursement. It is not optional to use UCP URR or UCP for an l/c, UCP URR will be used if there is a reimbursement bank.

If a reimbursing bank is involved, is it still optional for the IB bank to use UCP latest version or UCPURR?

Secondly, if we request UCPURR as a beneficiary but the IB only puts UCP Latest version and proides no RB bank information - but at the time of discounting decides to use a RB, how can a beneficiary avoid this situation?

consultant2b wrote:Hi,

Coming to a fairly old post here as I understand the processes a bit better now.

URR is the rules for reimbursement. It is not optional to use UCP URR or UCP for an l/c, UCP URR will be used if there is a reimbursement bank.

If a reimbursing bank is involved, is it still optional for the IB bank to use UCP latest version or UCPURR?

Secondly, if we request UCPURR as a beneficiary but the IB only puts UCP Latest version and proides no RB bank information - but at the time of discounting decides to use a RB, how can a beneficiary avoid this situation?

Provided at time of claim, the NB puts the IB on notice regarding the claim it has made on the later notified RB, I dont think it should cause a problem. If the RB has funds it will pay, and if it is a late nomination, provided a reasonable notice period has been provided, the IB should be able to cover their account in time.

abrar wrote:

consultant2b wrote:Hi,

Coming to a fairly old post here as I understand the processes a bit better now.

URR is the rules for reimbursement. It is not optional to use UCP URR or UCP for an l/c, UCP URR will be used if there is a reimbursement bank.

If a reimbursing bank is involved, is it still optional for the IB bank to use UCP latest version or UCPURR?

Secondly, if we request UCPURR as a beneficiary but the IB only puts UCP Latest version and proides no RB bank information - but at the time of discounting decides to use a RB, how can a beneficiary avoid this situation?

Provided at time of claim, the NB puts the IB on notice regarding the claim it has made on the later notified RB, I dont think it should cause a problem. If the RB has funds it will pay, and if it is a late nomination, provided a reasonable notice period has been provided, the IB should be able to cover their account in time.

But shouldn't the IB require the beneficiary's consent to use a RB at the last moment, because, the issue here could be, lets say the original LC was issued under UCP but now a RB is involved and the beneficiary may prefer to use UCPUCRR instead?

If incorporated, the UCP/URR are both rules that banks are required to adhere to and are binding on relevant parties, but at a basic level it is the banks who are the drivers in respect of incorporation of the Rules. It would be an unusual situation whereby the beneficiary is allowed to dictate to the bank(s)as to the incoporation of the Rule(s), or the preference of one Rule over another.

Provided the IB's underlying promise to honour is not compromised, the reimbursement arrangement is a matter for the IB, the RB and the NB (or a claiming bank), and therefore the incorporation of the URR is even less of a matter which should require the beneficiary's approval

Thanks Abrar.

Great insight as always.