Issue of a Documentary Credit
Field-by-Field Guide for Exporters and Importers
The SWIFT MT 700 is the standardised inter-bank message format used globally to issue Documentary Letters of Credit. Understanding its fields allows exporters to correctly interpret an LC received from a buyer's bank and identify conditions that need to be reviewed or amended before production begins. This guide covers every MT 700 field with practical guidance from an exporter's perspective.
Part 1 — MT 700 Structure Overview
The SWIFT MT 700 message is divided into sequences. The principal fields used in a documentary credit are in Sequence B (documentary credit details). Banks transmit the MT 700 to the Advising Bank in the Beneficiary's country, which then notifies the Beneficiary (the exporter).
Key MT 700 field tags:
Part 2 — Soft Clauses — Identify and Reject
A "soft clause" is a condition in the LC that gives the Applicant (buyer) control over whether payment can be triggered — effectively allowing the buyer to refuse payment even for conforming documents. Soft clauses make the LC valueless as a payment security. Common examples:
"This LC is operative only upon receipt by the Issuing Bank of a signed approval letter from the Applicant." — Reject.
"Shipment is subject to approval of the Applicant prior to loading." — Reject.
"Inspection certificate must be countersigned by the Applicant." — Reject.
"Goods must be approved by [named buyer representative] before shipment." — Reject.
"LC becomes effective only upon issuance of import licence by the Applicant's government." — Reject unless the import licence is genuinely a third-party regulatory requirement outside both parties' control.
Any LC containing a soft clause should be returned for amendment before production commences. A soft clause transforms an LC into an open account transaction with additional paperwork — it provides no payment security.
Part 3 — MT 700 Review Checklist
Doc 42 — SWIFT MT 700 Field-by-Field Guide — Neutral Template
| Tag | Field Name | Description and What to Check |
|---|---|---|
| :27: | Sequence of Total | Shows the message number in a series (e.g. 1/1 for a single message, 1/2 and 2/2 for a two-part message). Ensure you have received all parts. |
| :40A: | Form of Documentary Credit | Must read "IRREVOCABLE." Any other form (e.g. revocable) is unacceptable. Under UCP 600, all credits are irrevocable unless stated otherwise — but always verify. |
| :20: | Documentary Credit Number | The LC reference number assigned by the Issuing Bank. Quote this on all correspondence, documents, and SWIFT messages related to this LC. |
| :31C: | Date of Issue | The date the Issuing Bank issued the LC. The LC is effective from this date. |
| :40E: | Applicable Rules | Must read "UCP LATEST VERSION" or "UCP 600." Confirm the applicable ruleset before accepting the LC. |
| :31D: | Date and Place of Expiry | The final date and location for document presentation. Format: YYMMDD followed by the city/country. Expiry in India (at the Advising/Confirming Bank in India) is strongly preferred for Indian exporters — it protects against courier delays. |
| :50: | Applicant | The buyer's full legal name and address. This must match the "Applicant" on all documents that reference the buyer. |
| :59: | Beneficiary | The exporter's full legal name and address. Check this against your company registration exactly — any mismatch (e.g. "Ltd" vs "Limited") is a discrepancy on the invoice. |
| :32B: | Currency Code and Amount | The LC currency (e.g. USD, EUR) and the maximum amount. Check this covers the full invoice value including any freight/insurance if CIF. Note any tolerance indicated in field 39A. |
| :39A: | Percentage Credit Amount Tolerance | States a +/- tolerance on the LC amount and quantity (e.g. "10/10" means +/-10%). If blank, UCP 600 Article 30 applies: 5% tolerance on amount is allowed if quantity is not stated in units. If quantity is stated in units (pieces, cartons), tolerance is zero unless stated. |
| :41A/D: | Available With... By... | Specifies which bank the LC is available with and the method of payment: BY PAYMENT (at sight), BY ACCEPTANCE (draft accepted), BY NEGOTIATION (documents purchased), BY DEFERRED PAYMENT (specific date). "Available with any bank by negotiation" gives the most flexibility. |
| :42C: | Drafts at... | States the usance period if payment is by draft (e.g. "AT SIGHT," "90 DAYS AFTER BILL OF LADING DATE," "60 DAYS AFTER SIGHT"). Determines when payment will be received. |
| :42D: | Drawee | The bank on which the draft is drawn. Must be a bank named in the LC. |
| :43P: | Partial Shipments | "ALLOWED" or "PROHIBITED." If shipments will be made in multiple lots, partial shipments must be allowed. Confirm with freight forwarder before accepting the LC. |
| :43T: | Transshipment | "ALLOWED" or "PROHIBITED." India-EU shipments often involve transshipment (e.g. via Colombo or Port Klang). Confirm your routing with the freight forwarder. If transshipment is required but prohibited, request an amendment immediately. |
| :44A: | Place of Taking in Charge / Dispatch From / Place of Receipt | For multimodal B/Ls: the place where the carrier takes charge of the goods. Check this matches your inland origin if applicable. |
| :44E: | Port of Loading / Airport of Departure | Must match your intended port of shipment exactly. "Mumbai, India" and "JNPT, Nhava Sheva, India" are different — verify with carrier. |
| :44F: | Port of Discharge / Airport of Destination | The port of arrival. Must match the buyer's intended discharge port. |
| :44B: | Place of Final Destination / For Transportation to... | Final destination beyond the port (for multimodal). May be stated as a city in the buyer's country. |
| :44C: | Latest Date of Shipment | The deadline for the B/L on-board date. This is one of the most critical fields. Calculate backward from this date to allow for production, packing, inspection, and booking. If insufficient time, request an amendment immediately. |
| :45A: | Description of Goods and/or Services | The description that must appear verbatim on the commercial invoice. This is the most-cited source of discrepancies. The invoice description must mirror this exactly — not abbreviated, not paraphrased. Read every word carefully. |
| :46A: | Documents Required | A complete list of all documents to be presented. Every document listed must be produced exactly as specified. Check each document requirement for achievability: (a) Who issues it? (b) When can it be obtained? (c) What must it state? Red flag any document that requires a third party's signature or statement that is outside your control. |
| :47A: | Additional Conditions | The most dangerous field. Any condition that is impossible to fulfil, outside the Beneficiary's control, or vague must be identified and amended before shipment. Common problem conditions: "Notify applicant 7 days before shipment" (LC cannot require notification to the applicant as a condition of payment); "Inspection by buyer's representative" (gives buyer control over payment); "Documents to be countersigned by applicant" (same problem). |
| :71B: | Charges | Specifies which party bears bank charges outside the issuing country. "ALL BANKING CHARGES OUTSIDE [COUNTRY] ARE FOR ACCOUNT OF BENEFICIARY" means the exporter pays advising, confirming, and negotiation fees. Negotiate "SHARED" where possible. |
| :48: | Period for Presentation | The number of days after the on-board date (or other trigger) within which documents must be presented. If blank, UCP 600 default of 21 calendar days applies. Confirm this is achievable given courier times and document preparation. |
| :49: | Confirmation Instructions | "CONFIRM" — The Advising Bank is instructed to add its own payment undertaking. "MAY ADD" — The Advising Bank may but is not required to confirm. "WITHOUT" — No confirmation. For Indian exporters, always request "CONFIRM" from a reputable Indian bank — it eliminates buyer country risk and Issuing Bank risk. |
| :53A/B: | Reimbursement Bank | The bank that will reimburse the Confirming/Negotiating Bank after payment to the Beneficiary. Should be a reputable correspondent of the Confirming Bank. Check with your Advising Bank. |
| :78: | Instructions to the Paying / Accepting / Negotiating Bank | Instructions to the Advising/Confirming Bank on how to claim reimbursement. Confirm with your bank that these instructions are operable. |
| :72: | Sender to Receiver Information | Free text from the Issuing Bank to the Advising Bank. May contain additional instructions or clarifications. Read carefully. |
| MT 700 Review Item | OK / Flag |
|---|---|
| :40A: Credit is irrevocable. | [ ] |
| :40E: Applicable rules are UCP 600. | [ ] |
| :31D: Expiry date is sufficient and location is in India. | [ ] |
| :50: Applicant name matches the buyer. | [ ] |
| :59: Beneficiary name and address match exactly. | [ ] |
| :32B: LC amount covers full invoice value. | [ ] |
| :39A: Tolerance stated and acceptable. | [ ] |
| :41: Available with a named bank or "any bank" — payment method confirmed. | [ ] |
| :42C: Usance period (if any) is acceptable. | [ ] |
| :43P: Partial shipments allowed (if needed). | [ ] |
| :43T: Transshipment allowed (if routing requires it). | [ ] |
| :44E: Port of loading matches intended port. | [ ] |
| :44F: Port of discharge matches buyer's port. | [ ] |
| :44C: Latest shipment date allows sufficient lead time. | [ ] |
| :45A: Goods description is achievable on the invoice verbatim. | [ ] |
| :46A: All documents listed are obtainable within the timeframe. | [ ] |
| :47A: No soft clauses. No impossible or third-party-dependent conditions. | [ ] |
| :48: Presentation period is achievable. | [ ] |
| :49: Confirmation instruction — "CONFIRM" from Indian bank obtained. | [ ] |
| :71B: Charges allocation understood and acceptable. | [ ] |
| Amendments required — identified and requested in writing. | [ ] |