RWA letter (“ready, willing and able”): what it commits, and what it does not

What is an RWA letter?

An RWA letter states that its author is “ready, willing and able” to carry out a transaction: to buy goods, to sign a contract or, in the version most often seen, to have a bank issue an instrument such as a standby letter of credit or a bank guarantee. It usually names the counterparty, the transaction and an amount, and sometimes a validity period.

The letter is a statement of position. It tells the counterparty that the author intends to proceed and believes it has the means. It does not, on its own, transfer money, create a payment obligation or bind a bank.

Where does “ready, willing and able” come from?

The expression has a long history in real estate brokerage in common-law countries, notably the United States. A broker has traditionally been entitled to a commission once it produces a buyer who is ready, willing and able to buy on the seller’s terms: a buyer who wants to proceed and has the financial capacity to complete.

The phrase later spread to informal broker chains in commodities and so-called bank instruments, where RWA letters sit alongside other acronyms: LOI (letter of intent), ICPO (irrevocable corporate purchase order), FCO (full corporate offer), NCNDA (non-circumvention, non-disclosure agreement), POF (proof of funds) and SPA (sale and purchase agreement). In that setting the RWA often becomes a requested document in itself, sometimes for a fee, rather than a description of a buyer’s real position.

Company RWA vs bank RWA

The gap between the first two rows and the last three is the core of the topic. Banks commit through credit decisions and issued instruments, and they do so for their own clients after due diligence.

What is a “bank RWA via MT799”?

A common request is for the buyer’s bank to send an MT799 to the seller’s bank saying it is ready, willing and able to issue a standby or guarantee. MT799 is a free-format message: it carries text, and its effect depends entirely on that text and on the authority of the sender. Its format alone gives it no legal force. Our guide to SWIFT messages explains the difference between free-format and operative messages.

In practice, a bank that has not yet approved a facility has nothing to promise, and a bank that has approved one does not need an RWA: it issues the instrument, or for a documentary credit it may send a pre-advice. Banks rarely send RWA-type statements to unknown counterparties, and when they send a comfort message, it is commonly worded without engagement. An MT799 RWA is therefore not a guarantee, not a pre-advice of an SBLC, and not a proof of funds.

What does an RWA letter commit, and what does it not?

• It can show that the author takes the transaction seriously and has started preparing it.
• It can commit the author if it is drafted as a contractual undertaking and signed by someone authorised. Most RWA letters are not.
• It does not commit a bank to issue or fund, unless the bank itself has written a binding undertaking, which is unusual outside an approved facility.
• It does not evidence funds, block money or reserve credit.
• It cannot be “accepted” by the receiving bank in a way that creates an obligation for the sending bank.

Red flags around RWA letters

• A fee requested to produce, send or “activate” an RWA, payable upfront.
• A sequence promised as automatic: RWA, then MT760, then “monetization” or a “trading programme”.
• A bank RWA offered to you by a third party whose bank you have no relationship with.
• References to the “top 25 banks” or to forms “approved by the ICC”. The Federal Reserve and other US banking agencies have warned about instruments referencing non-existent ICC forms, such as “ICC 3034” or “ICC 3039” letters of credit.
• Claims that the Federal Reserve, the IMF or the ICC sanctions the programme. US authorities state that they do not.
• An NCNDA demanded before you are allowed to verify identities or contact the bank.

The SEC states that all “prime bank” investment programmes are fraudulent, and lists standby letters of credit and bank guarantees among the terms promoters use. See also our guide to trade finance fraud red flags.

What should you use instead?

To show you are a serious buyer: a signed purchase order or draft contract, a bank reference letter, and a clear proposal for how payment will be secured.

To show the bank will support you: a conditional approval from your bank, followed by agreed draft wording of the instrument. For trade, a documentary credit or a standby is the real commitment.

Example (illustrative): a Senegalese importer is asked by a sugar supplier for an “RWA from your bank”. Instead, the importer shares its bank’s draft documentary credit text, agreed with the supplier, and the bank issues the credit once the contract is signed. The supplier receives an undertaking rather than a statement of intent.

How Star Alliance helps

We do not issue or obtain RWA letters. We help importers, exporters and contractors move from intent to a real instrument: review of the transaction, preparation of the file and proposed wording, and coordination with the parties and the issuing institutions, which make the final decision. If you have received an RWA or a bank message and want it checked, see our verification service.

Frequently asked questions