Do all Financial Facilities Require the use of a MT799?
A MT 799 is a SWIFT message type. Swift is a financial messaging platform and is short for Society for Worldwide Interbank Financial Telecommunications. It’s used by banks and financial institutions throughout the world.
SWIFT have three central hubs. Virginia USA, Belgium and here in Switzerland there is one located in Zurich. SWIFT provides a dedicated secure messaging service. Banks can send fully authenticated; security protected financial messages to each other. They provide full validation and verification on each and every message.
We must also remember that SWIFT has 11,000 members in over 250 countries. Therefore, SWIFT will be delivering a massive number of messages per day. Figures up to March 2021 show an average daily figure of 42.5 million financial messages. Somewhere in all these messages are MT799’s.
What is a MT799?
A MT (Message Type) 799 is designated as a free flow message. It is not used to send bank transfers, block funds, payment assurances or trade securities or currencies. It is a simple advising message.
However, a MT 799 (free format message concerning MT7xx fields) can be used for many different purposes concerning URDG transactions. It is however primarily used as a pre-advice for bank instruments.
A MT 799 is utilised between banks to advise the arrival of Bank Guarantees, Documentary Letters of Credit and Standby Letters of Credit. The receiving bank will advise their client of the impending arrival of a bank instrument.
For information purposes a MT760 is used to transmit a Bank Guarantee and may be also used for Standby Letters of Credit. Letter of Credit however are remitted on MT700 and MT701 fields.
MT799 and Financial Facilities
As we have discovered, a MT799 can be involved with Demand Guarantees and Letters of Credit. A bank client may have a Documentary Letter of Credit or Bank Guarantee facility. The client will obviously wish to send these instruments in favour of a company at another bank.
There are many different financial facilities that a bank can offer to their clients. But not all financial facilities require advising to other banks or financial institutions. An MT799 is used for communication between the banks where the enquiry is in ‘free-format’ i.e., does not relate to a specific request accommodated for in other MT7xx fields.