Today I received an MT720 from Bank A. It is issued by Bank B but not confirmed by Bank A. The problem is that the second beneficiary located in another country and advise through bank in MT720 is Bank C in the same country with the second beneficiary. How can I advise this LC to Bank C? Which swift format is proper MT710 or else?
thanks for your helps
Hi friend, I undersood this scenario:
Bank B issued a transferable doc.credit fvg m/s xxx(first beneficiary), advised via Bank A (MT 700 )- Beneficiary instructed Bank A to transfer the L/c to second beneficiary via Bank C (MT 720). Unfortunately Bank A has not relationship with Bank C and must reach Bank C via Bank D.
IMHO Bank D must use MT 720 to advise L/c to the second beneficiary, amending and inserting all details necessary to give a non ambiguos information to the second beneficiary stating that it is only transmitting the message without any engagement and that the Bank A only, is responsable as per UCP 600 art 38 k.
Many banks need to have more correspondents to do international, but sometime it is very difficult to have Swift arrangements, so it is necessary to modify and to adjust the established rules, with some risks, I dare say.
Hoping to read other comments.
I thought MT720 to be sent by the banks who are authorized to transfer the LC to second beneficiary(ies).
If I use MT720, can I state the transfering bank in field 47A? (since 52A will show the issuing bank of the original DC).
Can MT710 do the same job by inserting proper explanations e.g. in field 47A?
I think the best way for you is to send by mail full copy of L/C to the second beneficiary's bank, the standard messages of SWIFT are not yet ready to face the imagination of L/C issuers and users. I read the usage rules of SWIFT messages:
-MT 710-Advice of a third bank's documentary credit, speaks about the sending by an advising bank of an L/C received from an issuing bank.
-MT 720-Transfer of a documentary credit -speaks about a message sent by the transferring bank to the bank advising the second beneficiary.
both can be used ,but I prefer MT 720 to indicate that the L/C has been already transferred.
As previous said you must inform the other bank about all details in order to give the latter a correct advice.
L/C : neverending problem?