URC 522 Articles

As we have stated on our website if you see the LOI or BCL in the procedures you are wasting your time.  The best situation for the intermediary is to find the end supplier or principal and work the deal as we stated with the DCL. (This is primarily for bulk commodities). You can otherwise step back after sourcing the end buyer connect the end buyer to your source in return for protection in the deal. 

 

After you have the proper documentation in order it is time for collections.  You want to get paid on the guarantee of the presented IDCL.  The most widely used reference for collections is the ICC regulations URC 522.  The URC stands for Unified Rules for Collections. The URC's rules are of some concern to intermediaries because they govern the collection of the buyers' remittances on how one collects on getting paid and these regulations more or less reinforce the UCP (500 and 600) and detail how such payments are contractually required and are to be made.

 

The URC:  1) "Application of URC 522 applies to all collections as defined in article 2 where such rules are incorporated into the text of the 'collection instruction' referred to in article 4 and are binding on all parties thereto unless otherwise expressly agreed or contrary to the provisions of a national, state or  local law and/or regulation which cannot be departed from."  When the URC is referred to in a collection instrument, in a contractually binding situation between multiple parties, it directly applies to the direct collections  of payments in the mode specified on that collection instrument Incorporating URC rules into an offer or contract makes it binding on everyone (all parties) to obviously the buyer and seller. A bank is not irrevocably obligated to handle a particular payment collection or instruction relating to that payment collection. The reason this has to be considered is a bank can choose to handle a collection, or not to. If a bank elects, for any reason, not to handle a collection or any related instructions received by it; it must advise the party from whom it received the collection or the instructions by telecommunication or, if that is not possible, by other expeditious means, without delay. While banks are not obligated to handle a payment collection for a party, if it chooses, however, not to, it is required to inform the party sending  the collection instructions at once.

 

We are not going to into much more and bore you with procedures and regulations.  If you have the chance review URC 522 at your leisure.  One important aspect is you will soon realize the ICC gives little protection to intermediaries.

 

For more information please review Professional Commodity Training