What is a 'Unilateral Transfer'

A unilateral transfer is a one-way transfer of money, goods, or services from one country to another. The prefix "uni" means one. In a unilateral transfer, one party is making a transfer to the other party. They are not receiving anything back from the other party. Unilateral transfers often involve gifts to governments, foreign aid or any transaction where one party is promising to deliver and then delivering payments or items to another country, population or government without receiving anything in return. This can be contrasted with a bilateral transfer. The prefix "bi" means two. A bilateral transfer involves two parties exchanging goods, money or services.

BREAKING DOWN 'Unilateral Transfer'

Unilateral transfers are included in the current account of a nation's balance of payments. They are distinct from international trade, which would be a bilateral transfer since two parties are involved in a trade. Unilateral transfers encompass things such as humanitarian aid and payments made by immigrants to their former country of residence.

Example of a Unilateral Transfer

For example, when the U.N. sends humanitarian aid to North Korea in the form of food this is a unilateral transfer. The people or government of North Korea are not sending anything back to the U.N. This is certainly not considered international trade. To contrast, a bilateral transfer or trade agreement with another country would involve one country sending goods in exchange for another country's goods.

RELATED TERMS
  1. Current Transfers

    Current transfers are current account transaction in which a ...
  2. Transfer

    A change in ownership of an asset, or a movement of funds and/or ...
  3. Book Transfer

    A book transfer is the transfer of funds from one deposit account ...
  4. Wire Transfer

    A wire transfer is an electronic transfer of funds across a network ...
  5. Uniform Transfer Tax

    A combination of federal estate taxes and federal gift taxes. ...
  6. Transfer Payment

    Transfer payments, in the United States, are payments made to ...
Related Articles
  1. Investing

    5 Money Transfer Tips For Foreign Workers

    If you are working in the U.S. as a foreign worker, here are some tips for sending money back home.
  2. Personal Finance

    The Credit Card Balance Transfer Trap

    Before you transfer a balance to a credit card with a lower interest rate, understand how it affects new purchases and other fine-print traps that can cost you.
  3. Small Business

    Moneygram Vs. PayPal Vs. Xoom: Who has the Lowest Fees?

    Learn about the different fees associated with leading transfer services PayPal, MoneyGram and Xoom and the types of services that each company provides.
  4. Tech

    Best Ways to Send Money to the Phillipines

    When you need to send funds to friends or family in Metro Manila or elsewhere in the Philippines, these four services make it fast and simple.
  5. Taxes

    4 Ways To Minimize Estate Taxes

    These four strategies will ensure that most of your money goes to your loved ones, and not to the government.
  6. Insights

    What Are the Different Types of Foreign Aid?

    Foreign aid can take many forms and may involve governments and private-sector contributors. Some efforts are more effective than others.
  7. Tech

    The World Will Soon Use Bitcoin to Send Money Home

    New players are constantly challenging the dominant, conventional mechanism of payment transfers that existed before bitcoin and blockchain arrived.
  8. Personal Finance

    Sending Money: MoneyGram vs. Western Union (WU, MGI)

    Comparing the differences between the services – and the fees.
  9. Personal Finance

    Do This Before You Switch Financial Advisors

    If you want to switch your financial advisor, take these 4 steps first.
  10. Insights

    Exploring the Current Account in the Balance of Payments

    Learn how a country's current account balance reflects the country's economic health.
RELATED FAQS
  1. What transactions are included in a country's balance of payments?

    Learn about the many types of transactions that are recorded in a country's balance of payments, including the current, capital ... Read Answer >>
  2. Paying off debt with a balance transfer

    Learn the best situation in which to do a balance transfer, enabling you to pay off your credit card debt more quickly while ... Read Answer >>
  3. How do you make working capital adjustments in transfer pricing?

    Understand how working capital adjustments are applicable to transfer pricing. Learn about the arm's length standard and ... Read Answer >>
Hot Definitions
  1. Quick Ratio

    The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets.
  2. Leverage

    Leverage results from using borrowed capital as a source of funding when investing to expand the firm's asset base and generate ...
  3. Financial Risk

    Financial risk is the possibility that shareholders will lose money when investing in a company if its cash flow fails to ...
  4. Enterprise Value (EV)

    Enterprise Value (EV) is a measure of a company's total value, often used as a more comprehensive alternative to equity market ...
  5. Relative Strength Index - RSI

    Relative Strength Indicator (RSI) is a technical momentum indicator that compares the magnitude of recent gains to recent ...
  6. Dividend

    A dividend is a distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.
Trading Center