Swift Codes, Bank Identifier Codes, And Iban Numbers All Assist International Commerce

By Author: Scott McCown
Total Articles: 33
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In the initial days of international trade a merchant, from whatever country and trading in whatever commodity had to be in possession of sufficient merchandise or acceptable currency to cover the value of whatever he was purchasing in a foreign land. Famous stories of traders trading baubles for jewels and alcohol and guns for riches. Notorious of course was a British policy of forcing the sale of opium to the Chinese in exchange for rice, tea and silk.

Undoubtedly some rogue traders did get rich this way but by far the majority earned their fortunes by solid and honest trade, exchanging items of from their own nation but in demand elsewhere for items of value in their own countries but fairly inexpensive over there. Tea was a case in point where the Tea crop in Ceylon (Now Sri Lanka) and China was plentiful but in high demand in London and those clipper ships like the "Cutty Sark" now on display in Greenwich, United Kingdom, were amply rewarded if they were the first back to London from China loaded with fresh tea.

But the important issue is that when a ship sets sail all bills are paid. This is obvious as the ...
... seller would find it extremely difficult to get paid in another country no matter what promises he had received.

In fact grain sailing ships were still making a run to Australia in the early part of the 20th Century. But by that time the telegraph and a banking system had been developing and the Letter of Credit, drawn on an upstanding and reputable bank had become an acceptable medium of exchange.

Letters of Credit are still used today with all sorts of conditions; Effectively in International transactions the LC is a promise that the seller will be paid by the buyers bank provided conditions are met such as the good being loaded, or when sight of an independent verification that the goods match the description on the LC, or before they are released in Bond in the destination port.

But irrespective Financial institutions are now involved. The ISO (International Standards Organization) established an agreed code to define all International Banks. This is initially the SWIFT code or Band Identity Code which effectively and rapidly identifies a Bank. It uses a set code identify a bank and each one can be checked online. The SWIFT code has a Bank Identifier and the first four letters, the following 2 are the country code and this is followed by a 2 digit location code, then lastly a 3 digit code for a branch code.

With many of the codes for the SWIFT or BIC similar many individuals now have an IBAN number or International Bank Account Number. This allows rapid transfer of money across national borders.

If you are making or likely to make an international financial transfer then you will find the Bank Swift Code absolutely essential to know. Similarly the IBAN is a number that enables you to transfer funds directly to a bank account in another country.

The Bank Swift Code allows an immediate identification of a bank and is extensively used in international transactions.