Reimbursement Authorization

[ahmad]

Dear All,

Can a issuing bank cancel the reimbursement authorization with or without the notice to nominated/advising bank any time to the reimbursing bank who has not yet issed the reimbursement undertaking and is ready to reimburse to a claiming bank.
please clarify as per URR 725.

Thanks

[danohng]

looking at your query - presume that issuing bank has issued an irrevocable RA to the reimbursing bank and reimbursing bank has yet to issue its reimbursement undertaking.

As per URR 725 article 8 - cancellation of the RA will require the issuing bank to provide the nominated bank or advising bank with a new reimbursement instruction.

and as per URR 725 article 9(h)(i) - an irrevocable RA cannot be cancelled without the agreement of the reimbursing bank.

Hope that will help.. any comment is welcome.

[ahmad]

Thanks danohng.