Various ICC Publications and the dates they are effective from

Below are the list of various ICC Publications and the dates they are effective from:

URC 522 - 1 Jan 1996 (26 articles)

ISP 98 - 1 Jan 1999 (10 rules)

UCP 600 -  1 Jul 2007 (39 articles)

URR 725 - 1 Oct 2008 (17 articles)

URDG 758 - 1 July 2010 (35 articles)

URF 800 - 1 Jan 2013 (14 articles)

DOCDEX 872 - 1 May 2015

ISBP 745 - Jul 2013

Documentary Collection under URC 522

Documentary Collection is governed by the Uniform Rules for Collection, ICC Publication No. 522 commonly known as URC522.

  

Types of documentary collection:

DP (Documents against payment) Documents are released to the buyer on payment of the bill

DA (Documents against acceptance) Documents are released to the buyer after he accepts the bill of exchange  and provides an undertaking to pay the bill on the due date.

Parties involved in documentary collection:

Seller (also known as Drawer/Exporter/Principal): The seller ships the goods and submits the documents to his bank with instructions for collection of payment.

Remitting bank: This bank is the seller’s bank. The remitting bank sends the documents to the buyer’s bank (Collecting/Presenting bank)

Collecting bank: This bank is any bank other than the remitting bank which is involved in the collection process. A collecting bank forwards the documents and collection instructions to the Presenting bank.  In case this bank presents the documents directly to the buyer, then it also becomes the Presenting bank.

Presenting bank:  This bank is the buyer’s bank. As per definition provided by URC 522, this is also a collecting bank. The presenting bank presents the documents to the buyer for payment or acceptance depending on the collection instruction.

Please note, in most cases the collecting bank also acts as the presenting bank.

Buyer (also known as Drawee/Importer): The buyer pays the bill in case of a sight bill or accepts the bill of exchange in case of a usance bill. The buyers receives the documents on payment/acceptance from the Presenting bank.

Incoterms 2010 explained in simple words

Incoterms stands for International commercial terms. These are a set of rules published by the International Chamber of Commerce (ICC) which defines the responsibilities of buyers and sellers for delivery of goods in international trade. The latest incoterms rules were published in 2010 and these rules are known as Incoterms 2010.

There are 11 types of incoterms. These can be divided into two categories:

Incoterms used for sea/inland waterway transport – FAS, FOB, CFR, CIF

Incoterms used for any mode of transport – EXW, FCA, CPT, CIP, DAT, DAP, DDP

Let’s discuss each of these rules in a way that you can remember them easily.

Sea/Inland waterway transport

FAS: 

FOB: 

CFR: 

CIF: Cost, Insurance and Freight

The seller pays for cost of carriage, insurance and freight till the port of destination.

Any mode of transport

EXW: Ex Works

FCA: Free Carrier

CPT: Carriage Paid To

CIP:  Carriage And Insurance Paid To

CIP is the same as CIF except the fact that CIP can be used for any mode of transport. The seller pays for cost of carriage, and insurance till the port of destination.

DAT: Delivered At Terminal

DAP: Delivered At Place

DDP: Delivered Duty Paid

You may refer the below link for the full text of Incoterms 2010 rules.

http://store.iccwbo.org/

Foreign bank charges in MT103 - BEN, SHA, OUR

International wire transfers are executed via standard message format MT103 in the SWIFT messagin platform. In this article, we’ll discuss the different options available for foreign bank charges.

Please get familiar with the below terms which will be used in our below discussion.

Remitter: one who is initiating a foreign remittance

Beneficiary: one to whom the funds is being remitted

Remitter's bank: the bank where the applicant holds an account and from where the MT103 is being sent

Beneficiary's bank: the bank where the beneficiary holds an account and where the funds will finally be credited

There are 3 types of foreign bank charges – BEN, SHA and OUR.

Let’s discuss these in details below:

1. BEN

When BEN is selected, all the charges related to the remittance is borne by the beneficiary.

For example, if the remittance is for USD 100.00 and the charges of the remitter's bank is USD 5.00, then this amount will be deducted from the remittance amount. The amount mentioned in the MT103 will be USD 95.00

2. SHA

When SHA is selected, the remitter's bank charges are born by the applicant and the beneficiary's bank charges are borne by the beneficiary. The beneficiary bank deducts its charges before providing credit to the beneficiary.

For example, if the remittance is for USD 100.00 and the charges of the remitter's bank is USD 5.00, then this amount will be separately recovered from the remitter. The amount mentioned in the MT103 will be USD 100.00

3. OUR

When OUR is selected, all the charges related to the remittance is borne by the remitter. In this case, the beneficiary received full amount.

For example, if the remittance is for USD 100.00 and the charges of the remitter's bank is USD 5.00, then this amount will be separately recovered from the remitter. The amount mentioned in the MT103 will be USD 100.00 In addition to this the charges of the beneficiary's bank is also recovered from the remitter. This is recovered at a later date when the claim is received from the beneficiary's bank.