When you transfer money to a foreign country, you will need to state BIC- and IBAN-codes. These codes make the international payment traffic a lot more efficient and cheap.
What is BIC?
Every bank has its own Bank Identifier Code (BIC). Because of this code, international payments end up with the right bank. The BIC is also referred to as SWIFT address or SWIFT code.
What is IBAN?
The International Bank Account Number (IBAN) identifies every account holder, bank and country of residence included. Thanks to the unique IBAN, banks are able to process a payment completely automatic - without additional information. It is therefore necessary that the account information on the invoice for business transactions show the right IBAN.
From January 1, 2007 onwards, BIC and IBAN are obligatory to mention for money transfers to countries within the European Economic Area (EEA). This is the effect of the European banking legislation. A correct IBAN and BIC can only be obtained through the (bank of the) recipient. Without the concerning IBAN and BIC, a foreign bank can reject your order and refund it with a deduction of extra costs.