Notice. This page is educational and informational in nature. Nothing here constitutes financial, legal, or investment advice. If you believe you have been approached as part of a fraudulent scheme, contact your bank and relevant law enforcement immediately.
What to Do When a Supplier Requires an MT799 Proof of Funds
A supplier asking you for an MT799 proof of funds is almost never a standard commercial requirement. In the vast majority of cases it is either a misunderstanding of what instrument they actually need, or it is the opening move in a fraudulent advance fee scheme. Before you do anything else — stop, read this guide, and verify the counterparty independently before sending any money or bank instructions.
The MT799 is one of the most misused and misunderstood terms in trade finance. It appears constantly in online commodity trading forums, in unsolicited supplier approaches, and in the mandates of brokers offering access to crude oil, gold, and other commodities at below-market prices. In almost every one of these contexts it is being described incorrectly, used as bait for an advance fee scheme, or both.
This does not mean that every person asking about MT799 is involved in a fraud. Many buyers who ask about it have been told by a broker or intermediary that they need one, without understanding what it is or why. This guide is written for both audiences: the buyer who has received a genuine but unusual request from a supplier, and the buyer who is beginning to suspect that the deal they are in is not what it appeared to be.
What MT799 Actually Is
SWIFT — the Society for Worldwide Interbank Financial Telecommunication — operates the global messaging network that banks use to communicate with each other on financial transactions. SWIFT messages are categorised by type, with each type code specifying the purpose and format of the message.
MT799 is a free-format message in SWIFT category 7, which covers documentary credits and guarantees. The key word is free-format — unlike standardised message types such as MT700 (issue of a documentary credit) or MT760 (issue of a guarantee or standby LC), the MT799 has no fixed structure. It is essentially a blank-page bank-to-bank communication for matters not covered by a more specific message type.
Its legitimate uses are narrow:
- Pre-advice between banks ahead of a formal LC or guarantee issuance — one bank notifying another that a formal instrument is forthcoming.
- General administrative correspondence between bank back offices on an existing transaction.
- In large, institutional commodity transactions, occasional use to confirm that funds are in place before a formal trade instrument is issued — but always bank to bank, never from a buyer directly to a supplier.
What MT799 is not: it is not a payment, not a guarantee, not a letter of credit, not a proof of funds document that a supplier can present to their bank to draw against, and not an instrument that provides any financial security to the recipient. A buyer who sends an MT799 to a supplier has communicated something to the supplier's bank. They have not committed to pay, not transferred any funds, and not created any legal obligation.
MT799 vs Other SWIFT Instruments: What Each One Actually Does
A significant part of the confusion around MT799 stems from conflation with other SWIFT message types that do create financial obligations. This table clarifies the key differences.
| SWIFT Type | Purpose | Creates Payment Obligation? | Provides Security to Recipient? | Issued By |
|---|---|---|---|---|
| MT700 | Issue of a documentary letter of credit. The primary instrument for trade payment security. | Yes — bank commits to pay on compliant documents | Yes — full payment security against compliant presentation | Issuing bank to advising/nominated bank |
| MT760 | Issue of a bank guarantee or standby letter of credit. | Yes — bank guarantee or SBLC is a binding payment obligation | Yes — beneficiary can draw on compliant demand | Issuing bank to receiving bank |
| MT700 / MT710 | Issue or transfer of a documentary credit. | Yes | Yes | Bank to bank |
| MT799 | Free-format bank-to-bank communication. Pre-advice, administrative correspondence, general queries. | No — creates no payment obligation of any kind | No — provides no financial security to any party | Bank to bank only — not buyer to supplier |
| MT103 | Single customer credit transfer — a wire payment instruction. | Yes — initiates an actual fund transfer | Limited — funds transfer, not a guarantee instrument | Sending bank to receiving bank |
The practical implication is clear. If a supplier needs genuine payment security before shipping goods, the appropriate instrument is an MT700 letter of credit or an MT760 bank guarantee — both of which create a binding bank payment obligation. An MT799 creates nothing of the sort. Any supplier or broker claiming that an MT799 provides payment security or acts as a proof of funds that justifies releasing goods is either misinformed or deliberately misleading.
How the MT799 Advance Fee Scheme Works
The MT799 is a central prop in one of the most prevalent advance fee fraud schemes in the commodity and trade finance space. The scheme targets buyers who are trying to source commodities — crude oil, gold, LNG, agricultural products — often at prices described as significantly below market, from sellers who are presented as having large, urgent quantities available.
The scheme follows a consistent sequence. Understanding the pattern is the most effective protection against it.
- The Initial Approach The buyer receives an unsolicited approach — through LinkedIn, WhatsApp, email, or a broker introduction — from a seller claiming to have a large quantity of a commodity available at a price below prevailing market rates. The seller may present themselves as a government entity, a state oil company, a mining company, or a well-connected private trader. They have professional-looking documentation: an FCO (full corporate offer), an ICPO (irrevocable corporate purchase order) template, and a procedure document describing the transaction steps.
- The Procedure Document The seller sends a transaction procedure that specifies the steps required to close the deal. Somewhere in this procedure — usually as step one or step two — the buyer is required to instruct their bank to send an MT799 to the seller's bank confirming that the buyer has sufficient funds available to complete the purchase. The procedure is described as "standard" and as the same process used by major oil companies and trading houses.
- The Bank Problem When the buyer approaches their bank to send the MT799, the bank either refuses (because they have no relationship with the receiving bank, because the request is unusual, or because compliance has flagged the counterparty) or the buyer is told by the seller's representative that the MT799 must be sent in a specific format that their bank is not familiar with. Either way, a problem materialises.
- The First Fee A solution is offered. A third-party compliance company, a correspondent banking specialist, or a "trade finance facilitator" can resolve the bank problem for a fee — typically described as a due diligence fee, a compliance processing fee, or a SWIFT transmission fee. The fee is usually modest relative to the deal size: $2,000 to $10,000 on a purported $50 million transaction. The buyer pays. The problem is not resolved.
- The Escalation Each fee payment generates a new obstacle requiring a new fee. The seller's bank requires a blocking fee. The escrow account needs to be funded. A government tax clearance certificate is required. An insurance bond must be posted. The fees escalate in size and urgency. At each stage the deal is described as almost complete, the commodity is described as ready to ship, and the next payment is described as the final requirement. It never is.
- The Exit After extracting as much money as the buyer is willing to send, the seller becomes unresponsive. Contact details stop working. The company that was presented so professionally is either non-existent, a shell with no assets, or a legitimate-sounding name that cannot be traced to a real registered entity. The commodity is never delivered. The fees are never returned.
Red Flags: When an MT799 Request Is Not Legitimate
Each of the following is a material warning sign that the MT799 request you have received is part of a scheme rather than a genuine commercial requirement. The more of these that apply simultaneously, the more certain you can be.
- The supplier approached you unsolicited — through LinkedIn, WhatsApp, email, or a broker you do not know — with a commodity offer at a price materially below market.
- The transaction procedure uses terminology like FCO, ICPO, NCNDA, IMFPA, LOI, RWA, or BCL in a way that is formulaic and interchangeable across deals — these are the standard vocabulary of commodity fraud schemes.
- The seller describes the MT799 requirement as "standard procedure" or "what all major oil companies do." Major commodity traders do not use MT799 as a buyer proof-of-funds instrument in their standard transaction procedures.
- You are being asked to send the MT799 to a bank in a jurisdiction that has no obvious connection to the commodity, the seller, or the transaction.
- The seller's bank account details or the receiving bank for the MT799 change during the process — a common sign of money-laundering infrastructure being rotated.
- You have been asked to pay any fee before the MT799 is sent, before the LC is issued, or before any formal financial instrument is in place. Legitimate trade finance does not work this way.
- The seller cannot provide independently verifiable evidence of their commodity inventory — a verifiable SGS inspection report, a confirmed storage receipt from a named terminal, or a bill of lading from a prior shipment.
- When you ask your own bank to send the MT799, they express confusion about the request, cannot identify the receiving bank on SWIFT, or flag the instruction as unusual. Your bank's hesitation is not a compliance problem to be resolved with a fee. It is the correct response to an unusual instruction.
- A broker or intermediary claims they can send the MT799 on your behalf without bank involvement. SWIFT messages can only be sent by SWIFT member banks. This claim is false.
- The deal timeline is described as urgent and the price or allocation is described as expiring imminently. Artificial urgency is a standard pressure tactic in advance fee fraud.
What a Legitimate Supplier Actually Needs and How to Provide It
A genuine supplier who needs confirmation of your financial capacity before proceeding with a large or first order has legitimate reasons for wanting that assurance. The way to address that need is not through an MT799 — it is through standard commercial instruments that are well-understood, cost-effective, and do not require your bank to send a free-format message to an unknown counterparty.
The most widely used and best-understood instrument for providing payment assurance to a supplier. Your bank issues an LC confirming it will pay the supplier on presentation of specified shipping documents. The supplier has a bank-backed payment guarantee. You pay only when the goods have shipped and documents are compliant. This is what most genuine suppliers actually want when they say they want "proof of funds" — they want to know they will be paid, and an LC from a reputable bank gives them that certainty.
For situations where the supplier wants confirmation of your financial standing rather than a payment guarantee on a specific transaction, a bank comfort letter or bank reference from your issuing bank confirms that you are a customer in good standing with sufficient facilities to support the proposed transaction. This is a standard document that most banks will issue for established customers on request, without SWIFT involvement and without any margin deposit requirement.
For institutional or large-scale suppliers conducting due diligence on a new buyer relationship, providing a copy of your most recent audited financial statements is a normal and expected part of establishing a commercial relationship. A supplier who is satisfied by financial statements that demonstrate adequate liquidity and net worth does not need a SWIFT message.
For very large first transactions where both parties need protection — the supplier wants to know the buyer can pay, and the buyer wants to know the goods exist — an independent escrow arrangement through a reputable escrow agent can hold funds from the buyer until delivery is confirmed, at which point the escrow agent releases payment to the seller. This is a bilateral protection mechanism that does not require SWIFT messaging and protects both sides.
Where the supplier needs a formal, bankable assurance of the buyer's payment obligation — typically in large infrastructure procurement, construction contracts, or long-term supply agreements — a bank guarantee (MT760) provides an unconditional payment commitment from the buyer's bank. This is the appropriate instrument for genuine situations where MT799 is being wrongly requested. It creates real security; MT799 creates none.
A legitimate supplier doing due diligence on a new buyer will typically request trade references from existing suppliers, KYC documentation for the buying entity, and evidence of previous import or commodity purchase transactions. Providing a comprehensive KYC pack and trade references addresses the supplier's actual concern — that the buyer is a real, creditworthy commercial entity — without any bank messaging requirement.
What to Do Right Now: A Step-by-Step Response
If you have received an MT799 request from a supplier and are unsure how to proceed, work through the following before taking any further action or making any payments.
- Do not pay any fees. Do not transfer any money — not to the seller, not to a compliance company, not to a facilitator, not to an escrow agent you have not independently verified — until you have completed the steps below. Every fee payment in an advance fee scheme makes recovery harder and emboldens the fraudsters to escalate further.
- Verify the supplier independently. Search the company name in the business registry of the country where they claim to be registered. Find their phone number on the registry or on an independently verified website — not on the document they sent you. Call that number and ask to speak to the person you have been dealing with. If the number does not work, or the person does not exist at that company, stop immediately.
- Verify the commodity exists. Ask the supplier for an independent inspection report from SGS, Bureau Veritas, or another recognised inspection company confirming the commodity exists in the claimed quantity and location. Ask for the name and contact details of the terminal, warehouse, or storage facility where the goods are held. Call the facility directly and ask them to confirm the holding. A genuine seller will have no objection to this. A fraudulent one will create obstacles.
- Ask your bank about the MT799 request directly. Call your trade finance officer and describe the request. Ask them whether they have a SWIFT relationship with the receiving bank, whether the request is something they would normally process, and what their view is on the counterparty and transaction. Your bank's assessment of the request is one of the most reliable signals available to you.
- Ask the supplier why an LC is not sufficient. Tell the supplier that your bank can issue a documentary letter of credit in their favour as payment assurance, and ask why this is not acceptable. A genuine supplier will accept an LC from a reputable bank. A fraudulent scheme requires the MT799 specifically because the subsequent fee extraction depends on the MT799 procedure — an LC cannot be substituted.
- Consult a trade finance advisor or lawyer before proceeding. If the transaction is large enough to matter, it is large enough to warrant 30 minutes with an advisor who has seen this pattern before. The cost of the consultation is a fraction of the cost of the first fee payment in an advance fee scheme.
If you have already made fee payments as part of a transaction that now appears to be fraudulent, contact your bank immediately and ask them to attempt a recall of any wire transfers that have not yet been settled. File a report with the FBI Internet Crime Complaint Center (IC3) at ic3.gov. Contact your country's financial intelligence unit if you are outside the US. Recovery of funds is rare but faster action improves the chances. Do not make additional payments in an attempt to recover what you have already lost — this is exactly what the scheme operators anticipate and depend on.
The Narrow Cases Where MT799 Is Used Legitimately
In the interest of completeness, there are genuine commercial contexts in which an MT799 is used appropriately. These are all characterised by the message being sent between banks — never directly between a buyer and a supplier — and by the transaction involving institutional counterparties who have an established banking relationship.
- Bank pre-advice of a forthcoming LC. Before a large LC is formally issued, the issuing bank may send an MT799 to the advising or confirming bank as a pre-advice, notifying them that an MT700 will follow. This is a bank-to-bank communication that the buyer does not initiate directly.
- Institutional commodity transactions between major trading houses. In very large, structured commodity transactions between institutional traders with established banking relationships on both sides, an MT799 may be used at the outset to confirm fund availability before the formal trade instruments are put in place. This is rare, highly specific to institutional-scale deals, and always managed through banking relationships rather than through a buyer instructing their bank based on a supplier's procedure document.
- Administrative correspondence on existing transactions. Banks use MT799 for back-office queries on active trade finance transactions — querying a document discrepancy, confirming an extension, or exchanging information on an LC that is already in place. The buyer is not involved in initiating these messages.
None of these contexts involve a supplier in a standard commercial trade telling a buyer they need to send an MT799 as a condition of releasing goods or confirming an allocation. If you have been told this is standard practice, it is not.
Frequently Asked Questions
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MT799 is a free-format SWIFT message type used for bank-to-bank communication on matters not covered by other standardised message types. It is used primarily for pre-advice of a forthcoming LC or guarantee, for general correspondence between bank back offices, and occasionally to confirm fund availability before a formal instrument is issued in large institutional transactions. It is not a payment instrument, not a guarantee, and not a letter of credit. It creates no payment obligation and provides no financial security to any party.
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Legitimate MT799 usage is narrow and always involves communication between banks rather than between a buyer and a supplier. In a commercial trade context, a supplier asking a buyer to instruct their bank to send an MT799 as a condition of releasing an allocation or confirming a deal is not standard practice. If you have been told this is what major commodity traders do routinely, it is not accurate. A genuine supplier who needs payment assurance will accept a documentary letter of credit.
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Fraudulent suppliers use the MT799 requirement for two reasons: to confirm that the buyer has funds available before escalating the scheme, and to create a sequence of fee requirements that begins with a modest compliance or processing fee and escalates as each payment unlocks the next obstacle. The MT799 is central to the scheme because it sounds technical and legitimate to buyers unfamiliar with SWIFT, and because the procedure document built around it creates a convincing appearance of standard trade practice.
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MT760 is the SWIFT message type used to issue a bank guarantee or standby letter of credit — a formal, binding financial instrument that creates a payment obligation enforceable by the beneficiary. MT799 is a free-format message used for general bank-to-bank correspondence that creates no payment obligation and provides no financial security. The two are frequently confused or deliberately conflated in commodity fraud schemes, where the MT799 is described as having the same effect as an MT760 or as a prerequisite for one.
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First, do not pay any fees. Then verify the supplier independently through official business registries. Ask why a documentary LC is not sufficient as payment assurance — a genuine supplier will accept one. Consult your trade finance bank directly about the request. Ask for independently verifiable evidence that the commodity exists in the claimed quantity and location. If any of these steps reveal inconsistencies, stop and do not proceed.
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No. MT799 messages are transmitted between banks on the SWIFT interbank network. Only SWIFT member financial institutions can send and receive SWIFT messages. Any broker, intermediary, or individual claiming they can transmit a SWIFT message on your behalf is either describing something that is not a SWIFT message, or is involved in a fraudulent scheme. Do not pay any fees to any non-bank entity for SWIFT transmission services.
If you are trying to structure a genuine commodity purchase or trade finance transaction and need help identifying the right instruments and counterparties, submit your mandate for a structured intake review. We work with legitimate buyers and sellers on real trade finance transactions and can quickly assess whether a deal you have been presented with matches the profile of a genuine commercial opportunity.
Get StartedDisclosure. FG Capital Advisors is not a bank or direct provider of SWIFT messaging services. This guide is for educational purposes only. If you believe you have been targeted by a fraudulent trade finance scheme, contact your bank and relevant law enforcement immediately. Nothing on this page constitutes legal, financial, or investment advice.
