Professional Post. Prepared September 2025. Documentary credits reference UCP 600. Reimbursement can reference URR 725. Confirm terms with your bank.
MT700 DLC Issuance: What Matters and How to Get It Right
MT700 is the SWIFT message used to issue a documentary letter of credit. If the draft is loose or contradictory, you invite discrepancies, delays and blocked payments. The remedy is straightforward: write each field to be operable, test it against your sailing calendar, and align it with how funds will be collected or discounted.
What MT700 Does
Creates the LC: parties, amount, expiry, rules, document list, shipment terms, and availability (sight or usance).
Who’s Involved
Applicant, issuing bank, beneficiary, advising bank. A confirming bank may add its independent undertaking.
Why Precision Matters
One field can block payment. Treat fields as code: exact text, no contradictions, practical dates.
Rulebook
Commercial LCs under UCP 600. Add URR 725 if a reimbursing bank is used.
Core MT700 Fields That Matter
| Field | Name | What to Lock Down |
|---|---|---|
| 40A | Form of Doc Credit | Irrevocable. “CONFIRM” if you require confirmation. |
| 20 | Credit Number | Unique reference. Keep consistent across amendments. |
| 31C / 31D | Date / Place of Expiry | Expiry where you will present. Dates workable with sailing and the presentation window. |
| 50 | Applicant | Legal name matching contract and KYC. |
| 59 | Beneficiary | Exact name/address matching invoices and transport docs. |
| 32B | Currency / Amount | Set tolerances only if needed. Avoid clashes with quantity/price. |
| 41A | Available With/By | Nominate the bank and method (payment/acceptance/negotiation). Align with discounting. |
| 42C | Drafts at | Sight or defined usance (e.g., 90 days from B/L). UPAS needs precise wording. |
| 42A / 42M | Drawing/Accepting Bank | Name who pays/accepts. Remove ambiguity. |
| 44A/B/E/F | Places/Ports/Latest Ship/Terms | Incoterm, load/discharge, partials, transshipment, realistic latest shipment. |
| 45A | Description of Goods | Concise and consistent with contract and invoices. |
| 46A | Documents Required | Invoice, transport, inspection/COI, insurance (per Incoterm), COO. No contradictions. |
| 47A | Additional Conditions | Keep objective. Avoid buyer approvals and “soft” conditions. |
| 71B | Charges | State who pays confirmation, discount, reimbursement and advising fees. |
| 48 | Presentation Period | 21 days after shipment unless set otherwise to fit transit. |
| 49 | Confirmation | “CONFIRM” if required; “MAY ADD” if optional. Be explicit. |
| 53A/54A/57A/72 | Reimbursing/Advise/Instructions | Name reimbursing bank (URR 725), advise-through, and clean operational instructions only. |
Planning to discount? Align 41A, 42C and 42A with the confirming or nominated bank’s process before issuance.
Common Discrepancies That Delay Payment
Date Collisions
Latest shipment after expiry, or a presentation window that cannot be met. Fix the calendar first; then issue.
Document Mismatch
Goods description differs across invoice/B/L/COI; inconsistent weights or HS codes; insurance not aligned with Incoterm.
Soft Clauses
Conditions that depend on buyer approvals or later amendments. Replace with objective, checkable requirements.
Issuance Control Checklist
Draft Review
Mark up the MT700 draft pre-issuance. Lock rules, banks, places and dates. Remove vague language.
Document Map
One-page map of each 46A document, issuer and timing. Identify source, signatory, and handover point. No gaps.
Reimbursement
Nominate reimbursing bank; include URR 725 where used. Confirm cut-offs and currencies with the paying bank.
Sanctions / KYC
Screen all parties, routes and vessels. Keep evidence. Avoid restricted ports and counterparties.
Confirmation & Fees
State “CONFIRM” in 49 when required. Set place of expiry. Allocate confirmation/discount/advising costs in 71B.
Execution Process
1) Contract & Application
Sales terms agreed. Buyer files LC application with confirmation and reimbursement instructions.
2) Draft MT700
Issuing bank circulates draft. Parties mark up fields, dates and document set. Confirmer sounded early.
3) Issue & Advise
MT700 sent over SWIFT. Advising bank authenticates; confirmer adds confirmation if agreed.
4) Ship, Present, Pay
Ship, present a clean set, resolve small points quickly, receive funds or discount on the confirmer’s undertaking.
FAQs
Is MT700 the only message used?
MT700 issues the LC. MT707 handles amendments. Reimbursement flows can involve MT740/742 with a reimbursing bank.
Do we need confirmation?
Add confirmation when issuer or country risk is a concern, or you plan to discount on sharper terms. State “CONFIRM” in 49 and align 41A/42C.
Can we structure UPAS?
Yes. Usance to the buyer with availability at sight for the seller via the confirmer. Wording must be exact and agreed by the banks.
What if dates slip?
Amend with MT707 early. Extend latest shipment and expiry rather than relying on tolerances to bridge delays.
Who pays bank fees?
Specify in 71B who pays confirmation, discount, reimbursement and advising charges to avoid disputes at presentation.
Have a Draft MT700 to Review?
Send the draft LC text and trade pack. We will mark it up, align confirmation and reimbursement, and set the path to clean presentation and timely funds.
Start NowDisclaimer. General guidance only. Final terms depend on bank policy, sanctions/KYC outcomes, LC wording and logistics.
