New rules regarding reimbursement under commercial letters of credit - Good for bankers, not so good for everyone else

Rules to be known as ICC Publication 525 clarify Article 19 of the recently revised UCP 400 (now 500) regarding reimbursements under letter of credit transactions. Corporate profitability from export sales and the performance of credit managers and cash managers will be negatively impacted by these...

Full description

Saved in:
Bibliographic Details
Published inBusiness credit Vol. 97; no. 3; p. 25
Main Author Long, Robert B
Format Magazine Article
LanguageEnglish
Published New York National Association of Credit Management 01.03.1995
Subjects
Banking industry
Banks
Beneficiaries
Cash flow
Cash management
Compensation
Exports
International banking
Letters of credit
Proposals
Regulation
Reimbursement
United States > US
Online AccessGet full text

Cover

More Information
Summary:Rules to be known as ICC Publication 525 clarify Article 19 of the recently revised UCP 400 (now 500) regarding reimbursements under letter of credit transactions. Corporate profitability from export sales and the performance of credit managers and cash managers will be negatively impacted by these rules as they are now being proposed. Although the rules currently under discussion do, for the first time, establish operating performance standards that banks must adhere to when reimbursing under letters of credit, the rules provide too much latitude on the part of the banks in reimbursing under letters of credit. The net result will be added expense, added managerial time spent in seeking reimbursement under letters of credit with the reimbursing bank, and lost cash flow.
ISSN:0897-0181