Article 10. Standards for a Reimbursement Claim – URR 725
Clause a:
“The claiming bank’s claim for reimbursement:
i. must be in the form of a teletransmission, unless specifically prohibited by the reimbursement authorization, or an original letter. A reimbursing 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 teletransmission, 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;”
Explanation:
This clause specifies the form in which a reimbursement claim must be made. The claim should primarily be sent via teletransmission (e.g., SWIFT message), unless the reimbursement authorization specifies otherwise, such as requiring an original letter. The reimbursing bank may request authentication of the claim, and any delays caused by this authentication process will not be the reimbursing bank’s responsibility. Additionally, if the claim is sent via teletransmission, no further mail confirmation should be sent, as it could lead to duplicate reimbursements, for which the claiming bank would be responsible.
Example:
If Bank A (the claiming bank) submits a reimbursement claim via SWIFT to Bank B (the reimbursing bank), and Bank B requests authentication, any delay due to this process would not be Bank B’s responsibility. Moreover, if Bank A accidentally sends a mail confirmation of the SWIFT claim, leading to a duplicate payment, Bank A would bear the consequences.
“ii. must clearly indicate the credit number and the issuing bank (and reimbursing bank’s reference number, if known);”
Explanation:
The claim must include clear and specific details such as the credit number associated with the reimbursement request, the name of the issuing bank, and if known, the reference number of the reimbursing bank. This ensures the reimbursing bank can accurately identify and process the claim without confusion.
Example:
Bank A submits a claim that includes the credit number “LC12345,” the issuing bank’s name “XYZ Bank,” and the reimbursing bank’s reference number “RB67890.” This information helps Bank B accurately process the reimbursement.
“iii. must separately stipulate the principal amount claimed, any additional amount due, and charges;”
Explanation:
The claiming bank must itemize the reimbursement claim by separately stating the principal amount being claimed, any additional amounts that may be due (such as interest or fees), and any applicable charges. This transparency helps the reimbursing bank understand the components of the claim.
Example:
Bank A submits a reimbursement claim with the following breakdown:
- Principal Amount: $100,000
- Additional Amount Due (Interest): $500
- Charges: $200
This detailed breakdown allows Bank B to process each component correctly.
“iv. must not be a copy of the claiming bank’s advice of payment, deferred payment, acceptance, or negotiation to the issuing bank;”
Explanation:
The reimbursement claim must be a distinct document and not merely a copy of the claiming bank’s communication to the issuing bank regarding payment, deferred payment, acceptance, or negotiation. This ensures that the reimbursing bank receives a formal and specific request for reimbursement.
Example:
Bank A, after negotiating documents, sends an advice to the issuing bank. The reimbursement claim sent to Bank B must be a separate document, specifically outlining the reimbursement request, and not just a copy of the advice sent to the issuing bank.
“v. must not include multiple reimbursement claims under one teletransmission or letter;”
Explanation:
A single teletransmission or letter must only contain one reimbursement claim. This avoids confusion and ensures that each claim is processed individually.
Example:
If Bank A has two separate reimbursement claims, one for $50,000 and another for $70,000, it must send these as two separate SWIFT messages or letters to Bank B, rather than combining them into one.
“vi. must, in the case of a reimbursement undertaking, comply with the terms and conditions of the reimbursement undertaking.”
Explanation:
If the reimbursement claim is made under a reimbursement undertaking, it must strictly adhere to the terms and conditions outlined in that undertaking. Failure to comply could lead to the rejection of the claim.
Example:
If a reimbursement undertaking specifies that the claim must be submitted within 10 days of shipment, Bank A must ensure that its claim adheres to this condition when submitting it to Bank B.
Clause b:
“When a time draft is to be drawn on the reimbursing bank, the claiming bank must forward the draft with the reimbursement claim to the reimbursing bank for processing, and include the following in its claim:
i. general description of the goods, services or performance;
ii. country of origin;
iii. place of destination or performance;
and if the transaction covers the shipment of merchandise,
iv. date of shipment;
v. place of shipment.”
Explanation:
When a time draft is involved, the claiming bank must include the draft with the reimbursement claim and provide specific details about the transaction. This includes a general description of the goods or services, the country of origin, the destination or place of performance, and for merchandise shipments, the date and place of shipment. These details help the reimbursing bank verify the legitimacy of the claim.
Example:
Bank A submits a time draft to Bank B with the following details:
- Goods: Electronics
- Country of Origin: Japan
- Place of Destination: New York, USA
- Date of Shipment: August 1, 2024
- Place of Shipment: Tokyo, Japan
This information helps Bank B process the time draft accurately.
Clause c:
“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.”
Explanation:
If the claiming bank fails to adhere to the provisions outlined in Article 10, the reimbursing bank is not liable for any consequences, such as non-acceptance or delays in processing the claim. This clause protects the reimbursing bank from potential errors or omissions made by the claiming bank.
Example:
If Bank A fails to provide the correct credit number in its claim, resulting in a processing delay, Bank B is not responsible for any issues that arise due to this delay.