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Advanced Trade Finance & Special Customs Procedures

Confirming Bank

Also known as: Confirmation

A confirming bank is a bank, usually in the exporter's country, that adds its own binding undertaking to pay under a letter of credit on top of the issuing bank's, giving the beneficiary a second, local guarantee of payment. Confirmation is sought when the exporter is uneasy about the issuing bank's creditworthiness or the political and transfer risk of the buyer's country, and it means the exporter can look to a trusted local bank for payment against compliant documents. The added security comes at a cost, but for higher-risk markets it can be the difference that makes a sale possible.

The JFS takeLicensed customs broker · Filer 82G

You are usually the one paying for it. Your supplier asks for confirmation, the issuing bank charges for it, and the cost lands in your fees or quietly in the unit price. Refusing can be false economy — a supplier who cannot get your bank confirmed will ask for cash in advance instead.

Related terms

Letter of CreditA letter of credit is a written undertaking by a bank, issued at the request of a buyer, to pay a seller a defined amount provided the seller presents documents that strictly comply with the terms stated in the credit.UCP 600UCP 600 is the current set of internationally accepted rules, published by the International Chamber of Commerce, that governs how documentary letters of credit are issued, examined, and honored, providing the common framework that banks and traders worldwide rely upon.

Reviewed by a licensed customs broker. Definitions are general information, not legal or customs advice for a particular shipment. Duty rates, tariff programs and agency requirements change frequently.