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Facilitating LC presentations over SWIFT

16/04/2020

Last year, SWIFT undertook a Proof of Value exercise with JPMorgan and DBS using FileAct and MT759 to help facilitate LC presentation, notify of the documents arrival, and link the documents to the associated LC. SWIFT believe that other customers might be able to use these tools to overcome hurdles they’re facing in these extraordinary times.

Fee free 

In recognition of the exceptional circumstances, SWIFT will support the trade community by providing FileAct and MT759 messages free of charge to help expedite LC document presentation for the next 6 months. These will enable banks and SWIFT-connected corporates to move LC documentation electronically, quickly, safely and reliably during pandemic restrictions. 

While SWIFT’s solution will not resolve all the complexities associated with digitizing trade, they hope that it will go some way to help.

Global reach and scale 

The SWIFT platform facilitates over 170 million FileActs per year across over 123 countries – with reach into more.

Thousands of BICs are subscribed to FileAct and for those that aren’t they can sign up for free using a form on SWIFT.com

Connecting the end to end transaction 

SWIFT advise use of the MT759 alongside FileAct to help the community to both notify of, and link, the documents associated with the Letter of Credit. 

Solution leverages existing security, resiliency and reliability 

Secure file transfer: authentication, confidentiality and built in integrity controls

Maximum file size: Up to 2 GB per exchanged file.

Role-based access control: allows participants to control who in their institution can access the application

Operational Efficiency: Store & Forward: the sender and the receiver can operate independently

The new implementation guide - for facilitating LC presentation over SWIFT -   has now been published on SWIFT Knowledge Centre:

https://www2.swift.com/knowledgecentre/products/SWIFT%20for%20Trade%20Finance

However, it is available to SWIFT customers only (i.e., log in required). 

SWIFT also has a directory listing the participants to the SWIFTNet service, which is available via www.swift.com

 


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Latest Question

We, as the issuing bank, requested the below document, under field 46A. “Insurance policy/certificate for 10.00 percent above CIF value payable to the order of Sampath bank PLC, covering institute cargo clauses (a), institute war clauses (cargo), institute strike clauses (cargo), transshipment risks marked premium paid claims payable in Colombo irrespective of percentage.” Insurance certificate is presented containing below wording on the face side of the document. “The settlement of loss and damage will be effected, unless otherwise provided, through the intermediary of Marsh SA/NV to whom all documents are to be forwarded for this purpose, and will collect the indemnity under deduction of a commission of one percent” Also, it indicates the LC conditions as a mirror image as follows under the heading of "letter of credit conditions" whereas insurance conditions are incorporated separately in the certificate: "covering institute cargo clauses (A), institute war clauses (cargo), institute strike clauses (cargo), transshipment risks marked premium paid claims payable in Colombo irrespective of percentage" Having considered the above clauses, we have quoted below discrepancies. 1) Insurance policy indicates a deductible of 1 pct instead of irrespective of percentage. 2) Insurance not marked premium paid Beneficiary’s bank disagrees with our discrepancy and raised below argument: “Insurance policy/certificate does not indicate a deductible of 1 pct irrespective of percentage on the face of the document and banks will not examine terms and condition in insurance document as per ISBP paragraph K22 and marked as premium paid under the LC conditions. Considering above, may we have your opinion on the discrepancy quoted by us and the counter argument raised by the beneficiary’s bank.