Page 19 – Letter of Credit Consultancy Services

MT 720 Transfer of a Documentary Credit

Ozgur Eker (CDCS) MT 720 Transfer of a Documentary Credit, Swift Messages 7 October 20186 April 2019MT 720 Transfer of a Documentary Credit, Swift, Swift Messages

Swift is a provider of secure message platform for financial institutions mainly for banks.

Swift messages are being sent and received by banks in encrypted forms. As a result swift messages are accepted as a valid and reliable way of communication between banks.

For example, an issuing bank sends a swift message to an advising bank in order to inform issuance of a documentary credit. Similarly the advising bank sends its acknowledgement via a swift message.

Swift messages play a key role not only in letters of credit but also other payment methods in international trade such as cash in advance payment, documentary collections, open accounts and bank payment obligations.

What is MT 720 Transfer of a Documentary Credit?

MT 720 is a special swift message type that is used with transferable letters of credit only.

MT 720 swift message is used by the transferring bank to advise the transfer of the documentary credit, to the bank advising credit to the second beneficiary.

It is used to advise the second beneficiary about the terms and conditions of the transferred documentary credit, or part thereof.

On below table you can find explanations regarding the fields used under MT 720 swift messages.

You can also reach individual pages of each field by clicking the corresponding links.

MT 720 Transfer of a Documentary Credit

Status	Tag	Field Name
M	27	Sequence of Total
M	40B	Form of Documentary Credit
M	20	Transferring Bank's Reference
M	21	Documentary Credit Number
O	31C	Date of Issue
M	40E	Applicable Rules
M	31D	Date and Place of Expiry
O	52a	Issuing Bank of the Original Documentary Credit
O	50B	Non-Bank Issuer of the Original Documentary Credit
O	51a	Applicant Bank
M	50	First Beneficiary
M	59	Second Beneficiary
M	32B	Currency Code, Amount
O	39A	Percentage Credit Amount Tolerance
O	39B	Maximum Credit Amount
O	39C	Additional Amounts Covered
M	41a	Available With ... By ...
O	42C	Drafts at ...
O	42a	Drawee
O	42M	Mixed Payment Details
O	42P	Deferred Payment Details
O	43P	Partial Shipments
O	43T	Transshipment
O	44A	Place of Taking in Charge/Dispatch from .../ Place of Receipt
O	44E	Port of Loading/Airport of Departure
O	44F	Port of Discharge/Airport of Destination
O	44B	Place of Final Destination/For Transportation to.../ Place of Delivery
O	44C	Latest Date of Shipment
O	44D	Shipment Period
O	45A	Description of Goods and/or Services
O	46A	Documents Required
O	47A	Additional Conditions
O	71B	Charges
O	48	Period for Presentation
M	49	Confirmation Instructions
O	78	Instructions to the Paying/Accepting/Negotiating Bank
O	57a	'Advise Through' Bank
O	72	Sender to Receiver Information
		O : Optinal M : Mandatory

MT 720 Transfer of a Documentary Credit Rules

When the documentary credit message exceeds the maximum input message length, additional documentary credit information should be transmitted via one or more MT 721s.
Unless otherwise specified, a documentary credit advised to the beneficiary or another advising bank based on a SWIFT message constitutes an operative credit instrument.
For freely negotiable documentary credits, the Receiver must add sentences to the effect that:
The advice to the beneficiary must be presented at each negotiation.
The negotiating bank must note each negotiation on that advice.
To avoid misunderstandings, where possible, banks are to use Bank Identifier Codes rather than expressions such as ourselves ,yourselves ,us, or you.
If this message is used to transfer a non-bank issued documentary credit, field 50B must be present.
The transferring bank must transfer the documentary credit, including all its details, in a way that is clear and unambiguous to the beneficiary.

MT 720 Network Validated Rules

C1 Either field 39A or 39B, but not both, may be present
C2 When used, fields 42C and 42a must both be present
C3 Either fields 42C and 42a together, or field 42M alone, or field 42P alone may be present. No other combination of these fields is allowed.
C4 Either field 44C or 44D, but not both, may be present
C5 Either field 52a “Issuing Bank” or field 50B “Non-Bank Issuer”, but not both, must be present.

MT 710 Advice of a Third Bank’s or a Non-Bank’s Documentary Credit

Ozgur Eker (CDCS) MT 710 Advice of a Third Bank's or a Non-Bank's Documentary Credit, Swift Messages 6 October 20186 April 2019MT 710 Advice of a Third Bank's or a Non-Bank's Documentary Credit, Swift, Swift Messages

Swift is a provider of secure message platform for financial institutions mainly for banks.

Swift messages are being sent and received by banks in encrypted forms. As a result swift messages are accepted as a valid and reliable way of communication between banks.

For example, an issuing bank sends a swift message to an advising bank in order to inform issuance of a documentary credit. Similarly the advising bank sends its acknowledgement via a swift message.

What is MT 710 Advice of a Third Bank’s or a Non-Bank’s Documentary Credit?

MT 710 is a special swift message type that is used by an advising bank, which has received a documentary credit from the issuing bank or the non-bank issuer, to the bank advising the beneficiary or another advising bank.

Advising banks use MT 710 Advice of a Third Bank’s or a Non-Bank’s Documentary Credit swift message type to advise the receiver about the terms and conditions of a documentary credit.

On below table you can find explanations regarding the fields used under MT 710 swift messages.

You can also reach individual pages of each field by clicking the corresponding links.

MT 710 Advice of a Third Bank’s or a Non-Bank’s Documentary Credit

Status	Tag	Field Name
M	27	Sequence of Total
M	40B	Form of Documentary Credit
M	20	Sender's Reference
M	21	Documentary Credit Number
O	23	Reference to Pre-Advice
O	31C	Date of Issue
M	40E	Applicable Rules
M	31D	Date and Place of Expiry
O	52a	Issuing Bank
O	50B	Non-Bank Issuer
O	51a	Applicant Bank
M	50	Applicant
M	59	Beneficiary
M	32B	Currency Code, Amount
O	39A	Percentage Credit Amount Tolerance
O	39B	Maximum Credit Amount
O	39C	Additional Amounts Covered
M	41a	Available With ... By ...
O	42C	Drafts at ...
O	42a	Drawee
O	42M	Mixed Payment Details
O	42P	Deferred Payment Details
O	43P	Partial Shipments
O	43T	Transshipment
O	44A	Place of Taking in Charge/Dispatch from .../ Place of Receipt
O	44E	Port of Loading/Airport of Departure
O	44F	Port of Discharge/Airport of Destination
O	44B	Place of Final Destination/For Transportation to.../ Place of Delivery
O	44C	Latest Date of Shipment
O	44D	Shipment Period
O	45A	Description of Goods and/or Services
O	46A	Documents Required
O	47A	Additional Conditions
O	71B	Charges
O	48	Period for Presentation
M	49	Confirmation Instructions
O	53a	Reimbursing Bank
O	78	Instructions to the Paying/Accepting/Negotiating Bank
O	57a	'Advise Through' Bank
O	72	Sender to Receiver Information
		O : Optinal M : Mandatory

MT 710 Advice of a Third Bank’s or a Non-Bank’s Documentary Credit Rules:

When the documentary credit message exceeds the maximum input message length, additional documentary credit information should be transmitted via one or more MT 711s. Up to three MT 711s may be sent in addition to the MT 710.
Unless otherwise specified, a documentary credit advised to the beneficiary or another advising bank based on a SWIFT message constitutes an operative credit instrument.
For freely negotiable documentary credits, if the Receiver does not further transmit the credit by another MT 710, it must add sentences to the effect that:
- The advice to the beneficiary must be presented at each negotiation.
- The negotiating bank must note each negotiation on that advice.
To avoid misunderstandings, where possible, banks are to use Bank Identifier Codes rather than expressions such as ourselves ,yourselves ,us, or you.
If this message is used to advise a non-bank issued documentary credit, field 50B must be present.
The advising bank must advise a documentary credit, including all its details, in a way that is clear and unambiguous to the beneficiary.

MT 710 Network Validated Rules

C1 Either field 39A or 39B, but not both, may be present
C2 When used, fields 42C and 42a must both be present
C3 Either fields 42C and 42a together, or field 42M alone, or field 42P alone may be present. No other combination of these fields is allowed.
C4 Either field 44C or 44D, but not both, may be present
C5 Either field 52a “Issuing Bank” or field 50B “Non-Bank Issuer”, but not both, must be present

MT 707 Amendment to a Documentary Credit

Ozgur Eker (CDCS) MT 707 Amendment to a Documentary Credit, Swift Messages 6 October 20186 April 2019MT 707 Amendment to a Documentary Credit, Swift, Swift Messages

Swift is a provider of secure message platform for financial institutions mainly for banks.

Swift messages are being sent and received by banks in encrypted forms. As a result swift messages are accepted as a valid and reliable way of communication between banks.

For example, an issuing bank sends a swift message to an advising bank in order to inform issuance of a documentary credit. Similarly the advising bank sends its acknowledgement via a swift message.

What is MT 707 Amendment to a Documentary Credit in Trade Finance?

MT 707 is a special swift message type that is used by issuing banks or advising banks when sending an amendment to a documentary credit.

An issuing bank or an advising bank uses MT 707 Amendment to a Documentary Credit swift message type to inform the receiver about amendment or amendments to the terms and conditions of a documentary credit.

The amendment is to be considered as part of the documentary credit, unless the MT 707 is used to convey only brief details of the amendment, details of which are to follow.

On below table you can find explanations regarding the fields used under MT 707 swift messages.

You can also reach individual pages of each field by clicking the corresponding links.

MT 707 Amendment to a Documentary Credit

Status	Tag	Field Name
M	20	Sender's Reference
M	21	Receiver's Reference
O	23	Issuing Bank's Reference
O	52a	Issuing Bank
O	31C	Date of Issue
O	30	Date of Amendment
O	26E	Number of Amendment
M	59	Beneficiary (before this amendment)
O	31E	New Date of Expiry
O	32B	Increase of Documentary Credit Amount
O	33B	Decrease of Documentary Credit Amount
O	34B	New Documentary Credit Amount After Amendment
O	39A	Percentage Credit Amount Tolerance
O	39B	Maximum Credit Amount
O	39C	Additional Amounts Covered
O	44A	Place of Taking in Charge/Dispatch from .../ Place of Receipt
O	44E	Port of Loading/Airport of Departure
O	44F	Port of Discharge/Airport of Destination
O	44B	Place of Final Destination/For Transportation to.../ Place of Delivery
O	44C	Latest Date of Shipment
O	44D	Shipment Period
O	79	Narrative
O	72	Sender to Receiver Information
		O : Optinal M : Mandatory

MT 707 Amendment to a Documentary Credit Rules

Terms and conditions which are not mentioned in the amendment message remain unchanged.
The cancellation of a documentary credit takes the form of an amendment. The MT 707 must therefore be used.
There are specific fields for amendments to the date of expiry and for loading on board/ dispatch/ taking in charge, and for increases or decreases in the amount of the documentary credit. All other amendments must be specified in field 79.
If the amendment contains reimbursement instructions which were not previously indicated in the original credit and unless otherwise specified, reimbursements under the documentary credit issued are, if applicable, subject to the Uniform Rules for Bank-to-Bank Reimbursements under documentary credits, International Chamber of Commerce, Paris, France, which are in effect on the date of issue. The advising bank, ie, the Receiver of the message, should,where applicable, inform the nominated bank when the reimbursement is subject to ICC URR. In case of a freely negotiable credit this should be done by informing the beneficiary.
If either field 32B or 33B is present, field 34B must also be present.
If field 34B is present, either field 32B or 33B must also be present.
If field 23 is present, field 52a must also be present.
Either field 39A or 39B, but not both, may be present.
Either field 44C or 44D, but not both, may be present.
At least one of the fields 31E, 32B, 33B, 34B, 39A, 39B, 39C, 44A, 44E, 44F, 44B, 44C, 44D, 79 or 72 must be present.
The currency code in the amount fields 32B, 33B, and 34B must be the same.

MT 705 Pre-Advice of a Documentary Credit

Ozgur Eker (CDCS) MT 705 Pre-Advice of a Documentary Credit, Swift Messages 6 October 20186 April 2019MT 705 Pre-Advice of a Documentary Credit, Swift, Swift Messages

Swift is a provider of secure message platform for financial institutions mainly for banks.

Swift messages are being sent and received by banks in encrypted forms. As a result swift messages are accepted as a valid and reliable way of communication between banks.

For example, an issuing bank sends a swift message to an advising bank in order to inform issuance of a documentary credit. Similarly the advising bank sends its acknowledgement via a swift message.

What is MT 705 Pre-Advice of a Documentary Credit in Trade Finance?

MT 705 is a special swift message type that is used by issuing banks when issuing a pre-advice of a letter of credit.

An issuing bank sends the terms and conditions of the documentary credit briefly with a MT 705 Pre-Advice of a Documentary Credit swift message type.

The pre-advice is not an operative instrument.

As a result the issuing bank, which has sent the pre-advice, must also send a MT 700 Issue of a Documentary Credit to inform the full terms and conditions of the documentary credit without delay.

On below table you can find explanations regarding the fields used under MT 705 swift messages.

You can also reach individual pages of each field by clicking the corresponding links.

MT 705 Pre-Advice of a Documentary Credit

Status	Tag	Field Name
M	27	Sequence of Total
M	40A	Form of Documentary Credit
M	20	Documentary Credit Number
M	31D	Date and Place of Expiry
M	50	Applicant
M	59	Beneficiary
M	32B	Currency Code, Amount
O	39A	Percentage Credit Amount Tolerance
O	39B	Maximum Credit Amount
O	39C	Additional Amounts Covered
M	41a	Available With ... By ...
O	44A	Place of Taking in Charge/Dispatch from .../ Place of Receipt
O	44E	Port of Loading/Airport of Departure
O	44F	Port of Discharge/Airport of Destination
O	44B	Place of Final Destination/For Transportation to.../ Place of Delivery
O	44C	Latest Date of Shipment
O	44D	Shipment Period
O	45A	Description of Goods and/or Services
O	57a	'Advise Through' Bank
O	79	Narrative
O	72	Sender to Receiver Information
		O : Optinal M : Mandatory

MT 705 Pre-Advice of a Documentary Credit Rules

This message is sent by the issuing bank to the advising bank.
It is a brief advice of a documentary credit, the full details of which will follow.
The pre-advice is not an operative credit instrument. Unless otherwise stated, the issuing bank must forward the operative credit instrument, ie, MT 700 Issue of a Documentary credit, without delay.

What Does Current Letter of Credit Rules Say About Pre-Advice of a Documentary Credit?

Teletransmitted and Pre-Advised Credits and Amendments

a. An authenticated teletransmission of a credit or amendment will be deemed to be the operative credit or amendment, and any subsequent mail confirmation shall be disregarded.

If a teletransmission states “full details to follow” (or words of similar effect), or states that the mail confirmation is to be the operative credit or amendment, then the teletransmission will not be deemed to be the operative credit or amendment. The issuing bank must then issue the operative credit or amendment without delay in terms not inconsistent with the teletransmission.

b. A preliminary advice of the issuance of a credit or amendment (“pre-advice”) shall only be sent if the issuing bank is prepared to issue the operative credit or amendment. An issuing bank that sends a pre-advice is irrevocably committed to issue the operative credit or amendment, without delay, in terms not inconsistent with the pre-advice.

MT 700 Swift Message Field Specifications

Ozgur Eker (CDCS) MT 700 Issue of a Documentary Credit, Swift Messages 5 October 20186 February 2025MT 700 Issue of a Documentary Credit, Swift, Swift Messages

Swift is a provider of secure message platform for financial institutions mainly for banks.

Swift messages are being sent and received by banks in encrypted forms. As a result swift messages are accepted as a valid and reliable way of communication between banks.

For example, an issuing bank sends a swift message to an advising bank in order to inform issuance of a documentary credit. Similarly the advising bank sends its acknowledgement via a swift message.

Swift Messages in Letters of Credit

Ozgur Eker (CDCS) Featured, Swift Messages 5 October 20182 July 2023Swift, Swift Messages

SWIFT is the short form of “Society for Worldwide Interbank Financial Telecommunication”.

Swift defines its role in international financial transactions on its website as follows.

“Our role is two-fold. We provide the proprietary communications platform, products and services that allow our customers to connect and exchange financial information securely and reliably. We also act as the catalyst that brings the financial community together to work collaboratively to shape market practice, define standards and consider solutions to issues of mutual interest.”

In simple terms swift has two main roles in international financial transactions,

firstly, SWIFT provides a secure, fast, and reliable communication platform with which financial institutions can communicate with each other.
secondly, SWIFT establishes standard message formats which can be used in its platform.

Today banks use SWIFT platform to communicate with each other, for example when sending a wire transfer, issuing a letter of credit, advising a discrepancy message etc.

Specifically, swift message types related to the letters of credit and bank guarantees are classified under Category 7 as shown below.

Category 7-Documentary Credits and Guarantees

Part 1-Documentary Credits

Part 2-Guarantees

760 Guarantee
767 Guarantee Amendment
768 Acknowledgement of a Guarantee Message
769 Advice of Reduction or Release

Part 3-Common Group

790 Advice of Charges,
791 Request for Payment of Charges, Interest and Other Expenses
792 Request for Cancellation
795 Queries
796 Answers
798 Proprietary Message
799 Free Format Message

Usage Examples:

MT700 Issue of a Documentary Credit message type should be used when issuing a letter of credit
MT 734 Advice of a Refusal message type should be used when sending a refusal message.

PS: MT means Message Type.

Field 72: Sender to Receiver Information

Ozgur Eker (CDCS) MT 700 Issue of a Documentary Credit, Swift Messages 4 October 20186 April 2019Field 72: Sender to Receiver Information, MT 700 Issue of a Documentary Credit, Swift, Swift Messages

What is Field 72: Sender to Receiver Information?

Field 72: Sender to Receiver Information is a field in MT 700 swift message type that specifies additional information for the Receiver.

This is an optional field.

MT 700
Field 72: Sender to Receiver Information:
DEFINITION
This field specifies additional information for the Receiver

CODES
One or more of the following codes may be used:

PHONBEN Please advise/contact beneficiary by phone.
TELEBEN Please advise the beneficiary by the most efficient means of telecommunication.

USAGE RULES

Any code must be between slashes and must appear at the beginning of a line.
Narrative text must not begin with a slash and, if used, must begin on a new line and be the last information in the field.

Field 57a: Advise Through Bank

Ozgur Eker (CDCS) MT 700 Issue of a Documentary Credit, Swift Messages 4 October 20186 April 2019Field 57a: Advise Through Bank, MT 700 Issue of a Documentary Credit, Swift, Swift Messages

What is Field 57a: Advise Through Bank?

Field 57a: ‘Advise Through’ Bank is a field in MT 700 swift message type that identifies the bank, if different from the Receiver, through which the documentary credit is to be advised/confirmed to the beneficiary.

This is an optional field.

According to current letter of credit rules;

advising bank means the bank that advises the credit at the request of the issuing bank.
a credit and any amendment may be advised to a beneficiary through an advising bank. An advising bank that is not a confirming bank advises the credit and any amendment without any undertaking to honour or negotiate.
an advising bank may utilize the services of another bank (“second advising bank”) to advise the credit and any amendment to the beneficiary. A bank utilizing the services of an advising bank or second advising bank to advise a credit must use the same bank to advise any amendment thereto.
if a bank is requested to advise a credit or amendment but elects not to do so, it must so inform, without delay, the bank from which the credit, amendment or advice has been received.

MT 700
Field 57a: ‘Advise Through’ Bank:
DEFINITION
This field identifies the bank, if different from the Receiver, through which the documentary credit is to be advised/confirmed to the beneficiary.

Field 78: Instructions to the Paying/Accepting/Negotiating Bank

Ozgur Eker (CDCS) MT 700 Issue of a Documentary Credit, Swift Messages 4 October 20186 April 2019Field 78: Instructions to the Paying/Accepting/Negotiating Bank, MT 700 Issue of a Documentary Credit, Swift, Swift Messages

What is Field 78: Instructions to the Paying/Accepting/Negotiating Bank ?

Field 78: Instructions to the Paying/Accepting/Negotiating Bank is a field in MT 700 swift message type that specify instructions to the paying, accepting or negotiating bank. It may also indicate if pre-notification of a reimbursement claim or pre-debit notification to the issuing bank is required.

This is an optional field.

According to current letter of credit rules;

a bank utilizing the services of another bank for the purpose of giving effect to the instructions of the applicant does so for the account and at the risk of the applicant.
an issuing bank or advising bank assumes no liability or responsibility should the instructions it transmits to another bank not be carried out, even if it has taken the initiative in the choice of that other bank.
a bank instructing another bank to perform services is liable for any commissions, fees, costs or expenses (“charges”) incurred by that bank in connection with its instructions. If a credit states that charges are for the account of the beneficiary and charges cannot be collected or deducted from proceeds, the issuing bank remains liable for payment of charges.

MT 700
Field 78: Instructions to the Paying/Accepting/Negotiating Bank:
DEFINITION
This field specifies instructions to the paying, accepting or negotiating bank. It may also indicate if pre-notification of a reimbursement claim or pre-debit notification to the issuing bank is required.

USAGE RULES
When used to indicate pre-notification of a reimbursement claim or pre-debit notification to the issuing bank is required, the number and type, ie, banking or calendar, of days within which the issuing bank has to be notified should also be indicated.

Field 53a: Reimbursing Bank

Ozgur Eker (CDCS) MT 700 Issue of a Documentary Credit, Swift Messages 3 October 20186 April 2019Field 53a: Reimbursing Bank, MT 700 Issue of a Documentary Credit, Swift, Swift Messages

What is 53a: Reimbursing Bank?

Field 53a: Reimbursing Bank is a field in MT 700 swift message type that specify the name of the bank which has been authorized by the Sender to reimburse drawings under the documentary credit. This may be a branch of the Sender or the Receiver, or an entirely different bank.

This is an optional field.

According to current letter of credit rules;

if a credit states that reimbursement is to be obtained by a nominated bank (“claiming bank”) claiming on another party (“reimbursing bank”), the credit must state whether the reimbursement is subject to the ICC rules for bank-to- bank reimbursements in effect on the date of issuance of the credit or not.
a reimbursing bank’s charges are for the account of the issuing bank. However, if the charges are for the account of the beneficiary, it is the responsibility of an issuing bank to so indicate in the credit and in the reimbursement authorization.
If a reimbursing bank’s charges are for the account of the beneficiary, they shall be deducted from the amount due to a claiming bank when reimbursement is made.
If no reimbursement is made, the reimbursing bank’s charges remain the obligation of the issuing bank.

MT 700
Field 53a: Reimbursing Bank:
DEFINITION

This field specifies the name of the bank which has been authorised by the Sender to reimburse drawings under the documentary credit. This may be a branch of the Sender or the Receiver, or an entirely different bank.
USAGE RULES

With the exception of a credit valid for negotiation, if there is a single direct account relationship, in the currency of the credit, between the Sender and the Receiver, the absence of field 53a means that this account relationship will be used for reimbursement.