The difference between SWIFT messaging types: MT799 and MT760 [UPDATED 2023]

The SWIFT MT 799 is a free format SWIFT messaging type that banks use securely communicate information regarding bank guarantees (demand guarantees) and letters of credit (documentary letters of credit).

The MT799 is not a message with the aim of showing funds or proof of deposits. 

As per SWIFT guidance, MT799 should only be used when there is no other appropriate MT7xx Message type to use in the specific business scenario, and where possible, an MT759 should be used instead of an MT799.

Find out more about SWIFT MT 799 here.

Please note, there is an important distinction between Standby Letters of Credits / Demand Guarantees and Documentary Credits, in terms of SWIFT Messaging.

MT760s can be used for Issuing and Advising a Demand Guarantee or Standby letter of Credit. An MT760 can be used to request the Issuance of Guarantee, but only the requested Issue of a Local Undertaking in connection with the Issuance of a Counter-Undertaking or Counter-Counter Undertaking.

If the bank is using an MT760 to Issue a Guarantee or Standby LC the bank will have credit risk exposure on the Applicant/Obligor associated with the contingent liability.  Unless cash collateral is taken it is unlikely that funds will be “ring-fenced.”

This is documented in the MT760 scope in SWIFT’s Message Reference Guide.

Find out more about SWIFT MT 760 here.

It might be easy to confuse the term SWIFT MT 760 and the SWIFT MT 799, but the messaging types are quite different.

That said, the messages are sent in the same mode, by banks, within the same industry, but there are a number of differences.

MT760 and MT799 are just 2 of over 20 SWIFT “Category 7” (Documentary Credits and Guarantees/Standby Letters of Credit). Banks frequently send and receive many of these different Messages every day.

The MT799 is a Free Format Message used in relation to Documentary Credits and Guarantees/Standby Letters of Credit.

These messaging types conform to the message type used in the SWIFT Documentary Credits and Guarantees/Standby Letters of Credit.”.

SWIFT is a communication service that acts as a messenger between banks and other financial institutions.

The service uses consistently formatted codes to identify its more than 11,000 member institutions, making it easy for members to transmit information to other member institutions.

For example, imagine a scenario where a Canadian company with an account at a TD Bank branch in Ottawa needs to pay an invoice to a German supplier with an account at a Deutsche Bank branch in Berlin. 

In order to make this payment, the Canadian company only needs to provide TD Bank with the SWIFT code for the supplier’s bank in Berlin and the supplier’s account number with that bank. 

Now, as long as TD Bank and Deustchebank have a commercial relationship, this payment can easily be made from one institution to the other.

This is just one example of the more than 220 message types that are grouped together into nine different categories.

A SWIFT MT message consists of the following blocks or segments:
{1:} Basic Header Block
{2:} Application Header Block
{3:} User Header Block
{4:} Text Block
{5:} Trailer Block

The SWIFT system has over 11,000 financial institutions that send and receive financial statements.

The MT 799 and MT 760 are the most widely used SWIFT messaging types and they are usually used just for corresponding between banks and on larger transactions.

The Incoterms are a series of pre-defined commercial terms designed to help prevent confusion in foreign trade contracts by clarifying the obligations of buyers and sellers. 

While they are in heavy use today, their origin dates back to the early 20th century.