When dealing with Bank Guarantees (Demand Guarantees) and Letters of Credit (Documentary Letters of Credit), you may often hear someone discuss the use of SWIFT MT799.
The MT799 is a type of SWIFT message that banks use to securely communicate authenticated free format messages with other banks.
It is important to understand that the MT799 is not used for transferring funds or a promise to do so.
SWIFT MT799 messages are mostly used for showing proof of funds or proof of deposits.
Since the MT799 is free format, banks can easily send many various types of messages to other banks before funds, a guarantee, or letter of credit is sent via SWIFT.
Types of MT799 Messages
Banks have many uses for the MT799 message including:
Proof of Funds Letters (POF)
Ready Willing and Able Letters (RWA)
How Do I Use the SWIFT MT-799?
A bank with SWIFT MT-799 capability allows SWIFT electronic verification for proof of funds in compliance with the SWIFT Category 7 “Treasury Markets & Syndication” message types.
People often believe that in order to show proof of funds, they require a SWIFT MT760 message, but in reality, they simply need a SWIFT MT799 message.
More often than not, the MT799 is issued right before a contract is signed and/or before a letter of credit or bank guarantee is issued.
Once the MT799 has been received by the seller’s bank, the seller often sends the buyer a proof of product (POP) to show their capability in the contract as well.
How Can I Get A SWIFT MT-799 Message Issued?
Only a bank that has SWIFT capabilities can issue a MT799. You can try to use your personal bank, or you can use a Trade Finance Broker to provide you the service from their banks.
Banks normally will not issue a MT799 without some type of collateral.
If you don’t have the collateral at hand, you can utilize the services of a Trade Finance Broker as they can often provide you a MT799 without the use of your own collateral.
What Information Do I Need To Provide In Order To Send A MT799?
Here is the most common information needed to send a MT799:
Applicant’s name and contact information
Advising bank’s information
Beneficiary’s name and contact information
Validity of instrument
Copy of contract / pro forma invoice
Letter of Credit number
Letter of Credit amount
Letter of Credit draft
Latest shipment date