I never encountered such a swift message like this, please note that we have issued MT700 and MT740, the Reimbursement bank later sent us the following mesage as quoted below
quote.
WE REFER TO YOUR ABOVE REFERENCE,
PLEASE NOTE WE HAVE RECEIVED THE FOLLOWING
MESSAGES FROM BANCO DE SABADELL SA (BSABESBB)
QUOTE
LC REF.xxxxx ISSUED BY BANK A
WITH DATE 15- 9-2008 THROUGH BANCO
SANTANDER, S.A. MADRID AND SENT TO US AS PER
MT-707 NO.1 AND 2 FOR AMOUNT OF: EUR.45.777,00 AT
SIGHT APPLICANT: BANK 1
BENEFICIARY: C
IN REFERENCE DOCUMENTARY CREDIT ABOVE MENTIONED,
YOUR ARE KINDLY REQUESTED TO ISSUE YOUR
IRREVOCABLE REIMBURSEMENT UNDERTAKING UNDER THIS
DOCUMENTARY CREDIT SUBJECT TO AND IN CCORDANCE
WITH ICC UNIFORM RULES FOR BANK-TO-BANK
REIMBURSEMENTS UNDER DOCUMENTARY CREDIT (URR525),
IN PARTICULAR WITH THE PROVISIONS ESTABLISHED IN
ARTICLE 9
IN CASE IF ANY PROBLEM WITH THIS I.R.U., PLS
CONTACT WITH US URGENTLY. THANK YOU VERY MUCH FOR
YOUR COOPERATION
UNQUOTE
IN VIEW OF ABOVE KINDLY SENT US THE FORMAL
REQUEST OF ISSUANCE OF IRU WITH FOLLOWING DETAILS
QUOTE
PLEASE SEND YOUR IRREVOCABLE UNDERTAKING TO OUR
REIMBURSEMENT AUTHORIZATION
1.(NAME OF ADVISING/CLAIMING BANK)
2.(L/C NUMBER)
3.(UNDERTAKING CURRENCY AND AMOUNT
4.LATEST DATE OF PRESENTATION OF CLAIM INCLUDE
TENOR IN CALCULATING THIS DATE
5.WHO WILL PAY SCB GERMANY GMBH UNDERTAKING FEES
Block 5:
{CHK:4C2FB935CFA4}{DLM:}
. (APPLICANT/BENEFICIARY)
6.WE AUTHORIZE YOU TO DEBIT OUR A/C HELD WITH YOU
UPON RECEIPT OF CLAIM.
8.IN THE EVENT OF REIMBURSEMENT CLAIM SENT
DIRECTLY TO ISB PAYMENT WILL BE EFFECTED THROUGH
STANDARD CHARTERED BANK (GERMANY) GMBH,FRANKFURT,
LC DEPT OTHERWISE YOU WILL RECOURSE ON THE ISB
FOR RECOVERY OF CHARGES.
THIS REIMBUSEMENT AUTHORIZATION IS SUBJECT TO
URR725.
YOUR PROMPT RESPONSE WILL BE HIGHLY APPRECIATED
REGARDS
LC DEPT - FFT
Please I must reply to them asap, just tell me what the hell is this, MT740 I assume is authorise toreimburse, then why they request such a undertaking.
I need to know what to reply and explain this case pls
Regards
More information is needed
Hello warlard,
After reading all of the information, I can only make some assumptions without additional information. Please let me know the following:
1. In the original MT 700, did you request that the letter of credit be confirmed?
2. In the original MT 740, did you issue it subject to the URR 525 or the URR 725 which came into effect on 01 October 2008?
If the answer for 1 above is yes and the answer for 2 above is no, here is what is possibly happening.
Banco De Sabadell SA will not confirm the letter of credit without the issuance of the reimbursing undertaking by Standard Chartered Bank. The first part of the message was a copy of a request from Banco De Sabadell to Standard Chartered Bank for the issuance of such reimbursement undertaking.
Since Standard Chartered Bank can not issue the reimbursement undertaking without your instructions, they are asking that you provide such instructions. Effectively you are cancelling the reimbursement authorization and asking Standard Chartered to issue their irrevocable reimbursement undertaking.
Please note that you may want to make sure that undertaking is subject to the URR 725, which details what information your instructions for the undertaking must contain.
I hope this helps you out.
LC Sam
THanks for answer The LC
THanks for answer
The LC is confirmed, and MT740 is under URR latest version. what I have done lately is the following:
I sent to Banco a swift message informing them that we have issued the normal MT740 which is considered authenticated and authorise to reimbursement swift message, I think this is enough dont you think.
And I sent to SCB - NY a swift telling them not to issue the reimbursement undertaking.
Now I await their reply, and we will see :)
After contacting them also,
After contacting them also, i dound the reason they required such an reimbursement undertaken, its coz we have confirmed lc with Banco sabadell, at the same time, we have no line with this bank and no BKE relation, thats why they requested this.
This is for ur information.
I am glad I could help out
Hi warlord,
I am glad it worked out.
Best regards,
LC Sam