The Irrevocable Reimbursement Undertaking (IRU) offered by ETC is a Payment Guarantee designed to ensure that the beneficiary, usually an exporter, will receive payment from the issuing bank if all conditions specified in the documentary credit (letter of credit) are met.
The type of risk participation under an IRU, proposed by ETC Export Trading Cooperation, is participation through an authenticated signature via interbank Swift messaging. Indeed, ETC is rated A3- (risk category 2 “low” according to the EU classification) by the European Securities and Markets Authority (ESMA) through an External Credit Assessment Institution (ECAI), in accordance with Regulation (EC) No. 1060/2009. This “Investment Grade” rating allows for risk weighting for regulatory purposes.
The shortage of correspondent banks and other financial institutions willing to take on African risk is now evident. This situation sometimes forces African issuing banks and their importer clients to give up. The volume of transactions delayed or canceled due to this situation constitutes a real obstacle to the development of African markets.
It is in this context that ETC – Export Trading & Cooperation offers African banks and their importer clients the IRU, an irrevocable payment guarantee. This means that as long as the conditions specified in the documentary credit are met, the seller is assured of receiving payment, thus reducing the risk of non-payment.
The Irrevocable Reimbursement Undertaking (IRU) is a guarantee primarily used in international trade. It is a commitment made by a Financial Institution (issuer) to irrevocably reimburse the amounts owed to another bank (often the beneficiary’s or supplier’s bank) in the context of a given transaction.
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PARTICIPANT : ETC – Export Trading & Cooperation |
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FORMULA : AGR = (AF/TR) + (IF/TR) + CF
LEGENDE :
