|Unit 4.4- Funds Remittance|
SWIFT (Society for Worldwide Interbrain Financial Telecommunication) is a computer-based standardized message writing system that connects worldwide participating banks, primarily for the purpose of communicating payment information. When an issuing bank instructs an advising bank by an authenticated teletransmission to advise a documentary credit or an amendment to a credit, the teletransmission will be considered to be the operative instrument. This is called SWIFT.
- Most documentary credits are transmitted electronically either by telex or through the SWIFT interbank telecommunication system. When documentary credits are transmitted in this way the telecommunication itself becomes the actual documentary credit or “operative instrument.” Should the issuing bank send a mail confirmation, the advising bank is under no obligation to compare the two instruments to ensure that they are identical.
- Sometimes, an issuing bank will send a brief telex/SWIFT message to the advising bank to let the bank know the "brief details" of the documentary credit and to advise that "full or complete" details will follow by mail. The issuing bank must send the actual documentary credit by mail without delay. The "pre-advice" is not the operative instrument. Once an issuing bank has issued a pre-advice, it must issue the operative instrument without delay unless the pre-advice indicates that the issuing bank may choose not to issue the credit. Should the latter happen, the "beneficiary" should exercise extreme caution before taking any action to begin production or otherwise act as if the credit were on its way.
- If a bank uses an advising bank to have the documentary credit advised to the beneficiary, it must also use the services of the same bank for advising an amendment(s).