OUR, SHA and BEN Charge Codes
OUR, SHA and BEN are instructions describing how bank charges should be allocated between sender and beneficiary. OUR generally places charges on the sender, SHA shares them and BEN places them on the beneficiary, although actual deductions can still depend on the route and institutions.
Also called: OUR · SHA · BEN · charge bearer codes
Every SWIFT customer transfer carries a charge-bearer instruction. Under OUR, the sender asks for all charges, including those of the beneficiary bank and intermediaries, to be billed to the sender. Under SHA, the sender pays its own bank's fees and the beneficiary bears the rest. Under BEN, all charges are deducted from the transferred amount. The code tells each bank in the chain how to treat its fee.
In trade payments the choice matters because suppliers expect to receive the invoiced amount. SHA is the most common default, which often leaves the supplier slightly short after intermediary and receiving-bank fees. OUR is meant to deliver the full amount, but the sender may face separate charges afterwards, and some routes still deduct fees in transit. BEN is rarely suitable for paying an invoice in full.
When an invoice must be settled exactly, agree with the supplier in advance who bears bank charges, choose the code that matches, and ask the sending provider whether OUR is honored end to end on the route. If a supplier reports a short payment, the charge code and the deductions shown on the tracking or confirmation are the first things to check. Intermediary banks are the most common source of unexpected deductions.
In practice
The code is an instruction, not a guarantee. Actual deductions depend on the route and on the practices of each bank involved, so a payment sent as OUR can occasionally still arrive short.
Example
A buyer must pay an invoice of exactly $30,000. Sent as SHA, the supplier receives $29,960 after $40 of deductions in transit and at the receiving bank. Sent as OUR, the supplier is credited $30,000 and the buyer is billed the $40 separately by its own bank.
See also
- Short-Paid PaymentA short-paid payment occurs when the beneficiary receives less than the amount expected under the invoice or instruction. The difference may result from bank charges, intermediary deductions, unexpected conversion or an incorrect charge code.
- Intermediary BankAn intermediary bank sits between the sending bank and beneficiary bank when they lack a direct settlement relationship. It may process, screen, convert or deduct charges from the payment as it passes through the correspondent chain.
- Beneficiary BankThe beneficiary bank is the financial institution that holds the account intended to receive a payment. It may review the beneficiary, currency, payment purpose and supporting documents before making funds available.
- FX SpreadStrictly, the FX spread is the bid/ask spread: the gap between the price at which a currency can be bought and the price at which it can be sold at the same moment. It is a property of the market and of liquidity in that pair.