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Can you summarize 22 CFR Part 201, Subpart H?
RULES AND PROCEDURES APPLICABLE TO COMMODITY TRANSACTIONS FINANCED BY USAID > Rights and Responsibilities of Banks
Short Summary
This document, part of the Code of Federal Regulations, specifically the Rules and Procedures Applicable to Commodity Transactions Financed by USAID, outlines the rights and responsibilities of banks when making payments under a letter of credit. The bank is responsible for obtaining specified documents and examining them to ensure compliance with requirements. The documents must indicate the shipment, source, and destination of commodities, and describe them accurately. The bank is not required to make payment for discounts and commissions unless disclosed in the documents. Certifications and other required information must also be included. The bank should not accept the original Supplier’s Certificate or Commodity Approval Application unless properly signed. The document does not mention any exemptions or penalties. This document sets forth the limitations on the responsibilities of banks in relation to issuing, advising, or confirming letters of credit and making payments under letters of credit or otherwise. The document states that any document submitted by a bank to USAID in support of a claim for reimbursement shall be considered sufficient if it meets the required criteria and has been accepted by the bank in good faith. The bank’s right to reimbursement will not be affected by incomplete documents or noncompliance with any provisions. The bank is not responsible for the truth or accuracy of any information or statement contained in the submitted documents. The bank’s acceptance of a document in good faith and its delivery to USAID will be considered compliance with the document’s provisions. The bank’s right of reimbursement will not be affected if payment is made to a person other than the supplier, as long as the bank has complied with all other requirements. The bank is expected to maintain procedures reflecting any special conditions advised by USAID for transactions with particular suppliers. The bank is not responsible for compliance with implementing documents other than the letter of commitment. In addition to the documents required for reimbursement, a bank shall retain in its files for a period of at least 3 years and shall make available to USAID promptly upon request a copy of any of the following documents which may pertain to a USAID-financed transaction: (a) Each letter of credit issued, confirmed, or advised by it, together with any extension or modification thereof; (b) Payment instructions received from the approved applicant; (c) Each application and agreement relating to such letter of credit or instructions for payment, together with any extension or modification thereof; (d) A detailed advice of the interest, commissions, expenses, or other items charged by it in connection with each such letter of credit or payment instructions. If USAID directs that the delivery of commodities be terminated, orders that title to commodities be vested in it, or modifies any implementing document concerning the disposition of documents, USAID shall give written notice thereof to the banks holding applicable letters of commitment and shall instruct each bank with regard to the disposition of documents. Each such bank shall be relieved of any liability whatsoever to the approved applicant for anything done or omitted to be done under instruction of USAID. Notwithstanding the foregoing, a bank shall comply with the instructions of USAID only to the extent that it may do so without impairing or affecting any irrevocable obligation to any person or organization except an approved applicant, and in the event the bank shall incur any costs, expenses, or liabilities, including any liability to the approved applicant, it shall be repaid and reimbursed by USAID in respect thereof.
Whom does it apply to?
Banks
What does it govern?
Rights and responsibilities of banks with regard to reimbursement under a letter of commitment opened pursuant to a USAID request
What are exemptions?
Exemptions are not mentioned.
What are the Penalties?
No penalties are mentioned.
Jurisdiction
U.S. Federal Government