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The Following Blog Post Was Made On:
The Idea of SWIFT MT798
The bad thing about a long layover at an airport is "Its Boring". The good thing is, you can sit back and relax and write for your blog :)
So, we were discussing how technology is having greater impact on International Trade documentation compared to the rules and laws. Whether you have realized it or not, you in fact already know a good part of it. Take the example of SWIFT. When we read the history of LC, we see people carrying the original, signed paper LC in their briefcase. After that we had the era of telex and now we have the SWIFT. Now if you please agree with me, jumping from Paper to Telex to SWIFT affects our daily life (or daily trade life?!) more than jumping from UCP400 to UCP500 To UCP600. If you work for a bank and don't agree with me, it ok. Let us put aside that debate for now. Let's discuss another thing that is silently affecting how we deal with intentional trade.
In international trade, we know SWIFT as a very "Bank to Bank" thing. May be some corporate are using them but for treasury purpose only. But there is another thing that is out there for quite a while but very recently thriving - MT798.
MT798 is a corporate to bank communication infrastructure where a corporate can securely exchange trade finance messages with its bank. Now if you are looking at the SWIFT handbook for Category 7, it could be very confusing since all it says,
"See Category n - Common Group Messages, Chapter n98 Proprietary Message for details concerning this message type."
But MT798 is not just one message. It is a cover for tens of other message standards that are specifically meant for Corporate to Bank communication. For example, MT774, 776, 745, 746 etc. are all considered as the sub-type of MT798. Each of these standards have their specific uses. For example, MT774 is used for advising of LC, MT745 is used for advising of guarantee and so on.
So why should we care about it? The answer should be the same as to why we prefer having bank to bank trade finance messages via SWIFT instead of paper or email, i.e. it's secure, first and above all authenticated. In combination with SWIFT FileAct, we can even exchange document. All these could save a lot of time which is very important in international trade.
In my next post, I will try to explain the MT798 structure and how it works. Till then, you take care and stay fine.