LC SWIFT Format: Field 40A (Form of Documentary Credit)

The second field in MT700/701 is field 40A. This is also a mandatory field where it must present and must be expressly stated to indicate the form of the Documentary Credit or LC. This field must contain one of the following codes:

IRREVOC TRANS STANDBY – The standby letter of credit is irrevocable and transferable

IRREVOCABLE – The documentary credit is irrevocable

IRREVOCABLE STANDBY – The standby documentary credit is irrevocable

IRREVOCABLE TRANSFERABLE – The documentary credit is irrevocable and transferable

REVOCABLE – The documentary credit is revocable

REVOCABLE STANDBY – The standby documentary credit is revocable

REVOCABLE TRANSFERABLE – The documentary credit is revocable and transferable

Article 3 of UCP600 stated that “…a credit is irrevocable even if there is no indication to that effect”.

This article says that, if none of the above codes are expressly indicated in field 40A of the SWIFT format, the LC is deemed irrevocable. Since field 40A is a mandatory field, it is a practice by banks worldwide to expressly indicate a code under this field. Article 3 of UCP600 is merely discouraging the practice of issuing a revocable LC to protect the interest of the seller. But this does not however, prohibits the practice of issuing a revocable LC. By virtue of article 1 which says, “…they are binding on all parties thereto unless expressly modified or excluded by the credit”.

This article allows both parties to modify or exclude some or part of the articles where a revocable LC may be an option.

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