MT760

This is a Swift class 7: Bank Guarantee and Letter of Credit procedure, Procedure 60: Blocked unds! The Course of "ction #hen $our Bank %ssues "n MT&760: When an MT-760 is issued, the issuing bank puts a hold on the client's funds, blocking the client from using them. The funds are then at the disposal of the person the MT-760 was issued in fa or of. !or this reason it is not wise to issue an MT-760 before being absolutel" certain as this can mean a large financial loss for absolutel" no gain. #n some cases, unscrupulous traders will use the MT-760 to open a line of credit, which the" then default on, lea ing the issuer of the MT760 liable. #hat " MT&760 Looks Like: #t is important to remember that an MT-760 is actuall" an interbank communication, so one ne er reall" sees an MT-760. $ou ma" need a special account to be able to use this procedure. The Cost of " MT&760: The cost of an MT-760 aries greatl" from bank to bank. %e aware howe er, that due to the amount of risk in ol ed for a bank in guaranteeing pa"ment, a MT-760 is normall" fairl" e&pensi e, with the usual bank fee for issuing a MT-760 being between 0.'( and ).'( of the total alue of the funds blocked. Potential of 'e(otiation )nce " MT&760 is Sent: *nce a MT-760 has been issued, it is not negotiable. !or this reason, man" traders prefer a +etter of ,redit, which is negotiable and can be amended in response to unforeseen changes in circumstances, such as a dela"ed shipping schedule, lower production than anticipated, and other such e ents. *ow $ou Get " MT&760: - MT-760 can be obtained from a bank on the international .W#!T bank network. /owe er not all 0. banks are on this network, so "ou ma" ha e to change bank. - law"er, pri ate banker, e1uit" funds cannot be on on .wift, onl" banks.

.o no broker or financial institution other than a bank can help "ou with blocking funds. The banks underwrites the blocked funds with the funds in the client's account, and if this is not full"

funded, the" will make other banks 2confir+2 their guarantee, spreading the risk.
Read more: http://wiki.answers.com/Q/What_is_MT760#ixzz 6Wt!07"w

MT 700
#t is ... #ss$e o% a &oc$mentar' (redit . This messa)e is sent *' the iss$in) *ank to the ad+isin) *ank. #t is $sed to indicate the terms and conditions o% a doc$mentar' credit which has *een ori)inated *' the ,ender -iss$in) *ank.. Read more: http://wiki.answers.com/Q/What_is_mt700#ixzz 6W+/!%$0

,wi%t MT 700 is $sed when certain 0ank instit$tions aro$nd the wor1d are $na*1e or $nwi11in) to +eri%' acco$nt ho1ders %$nds $sin) the ,wi%t MT 760. ,$ch is the case at the present time with the 0ank o% (hina. 2 MT700 is the ,W#3T %ormat %or a &oc$mentar' 4etter o% (redit5 *$t it is a1so possi*1e to iss$e a ,tand*' 4etter o% (redit $sin) the same ,W#3T messa)e t'pe. ,imi1ar1'5 a MT760 is the ,W#3T %ormat %or a 6$arantee5 *$t a)ain 'o$ co$1d send a ,tand*' 4etter o% (redit $sin) the same ,W#3T messa)e t'pe.