MT 700 is a specific type of message sent by the issuing bank to the advising bank to communicate the terms and conditions of a documentary credit.
In simpler terms, the MT 700 message serves as the formal notification of a letter of credit (LC) from the bank issuing the LC to the bank that will advise (and possibly confirm) the LC to the beneficiary. It is the standardized format for transmitting all the details needed for the advising bank to present the LC to the beneficiary.
Here's a breakdown of what it represents:
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Purpose: To indicate the terms and conditions of a documentary credit that the issuing bank has originated. (Based on provided reference)
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Sender: The issuing bank (the bank opening the letter of credit).
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Receiver: The advising bank (the bank that informs the beneficiary of the LC's existence).
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Content: Detailed information including:
- Parties involved (Applicant, Beneficiary, Issuing Bank, Advising Bank)
- Credit amount and currency
- Expiry date and place
- Presentation period
- Description of goods or services
- Documents required for presentation
- Terms of shipment
- Instructions for payment, acceptance, or negotiation
- Reimbursement instructions
Therefore, the MT 700 serves as the official document outlining the agreement between the involved parties, ensuring transparency and facilitating international trade.
