MT799 is a message that is sent between banks; with the aim of showing funds or proof of deposits. It is important to note that it is not used as a method of transferring funds or an undertaking to do the same. It is a type of inter-bank message that is used on the SWIFT system so that financial institutions can correspond freely.
What is difference between MT799 Swift and MT760 Swift?
These types of message are sometimes referred to as “free format messages”. One of the main differences between the types of messages is the exchange of a BKE authenticator used in a MT799; so a test key is coded into the messages sent and received.
An MT999 is very similar, but there is no test code and so the message is unauthenticated; so having less value unless the message is confirmed. Sometimes the chosen form of communication is the SWIFT MT760 message, when the SWIFT MT-799 could be a satisfactory bank conformation. It is important to note that this message type will be sent prior to the signing of agreements and instruments are issued. However, it is important to note that for a SWIFT MT-799 to be sent, many financial institutions will have a minimum size of account or transaction required.
The process of an MT-799 is that it is usually received by the funder of the seller; then that recipient institution will normally send a proof of product to the buyer’s financial institution. The trade will then progress.
Payment is the usually made through a wire payment (MT-103) or documentary letter of credit.
How do I start the MT799 process?
Banks do not like issuing these automated messages (MT-799s), as they fear being liable for the cost of the trade. There is usually a requirement for the bank’s client to post a specific level of collateral.
What information is required by the financial institution?
A funder will need to know the name of the advising bank. However, they will request more granular detail, such as the LC Number and LC Amount. This will also include the tenor or length of the draft. This will be alongside the latest date of shipment. The company that is liable for the confirmation fee needs to be known; along with information on what the products is, location, port, unloading location and whether the LC is restricted for negotiation or not.
Are these communications used widely?
It is estimated that the swift system has over eight thousand financial institutions where they send and receive financial statements. The MT799 and MT760 swift are both the most widely used. They are usually used just for corresponding between banks and on larger transactions. An Mt799 is a notification tool and is also usually transmitted before an MT760; it is only when the MT760 is sent that the bank ring fences specific funds for a transaction.