Understanding MT 707: Amendment to a Documentary Credit [UPDATED 2024]

    • Themes
      • Trade

        Do you want to know how access to trade finance can increase your cross-border imports and exports? Explore our Trade Finance hub for practical tools.

        Treasury

        Are you a treasury or operations manager looking to mitigate the risks and efficiently manage your business’ cash flow? If so, check out our Treasury Management hub.

        Payments

        Whether you want updates from infrastructure support to cross-border transactions or clearing house operations to processing techniques, you can find all on our Payments hub.

        Letters of Credit

        Ready to to increase your imports / exports to guarantee the payment and delivery of goods? Find out more about LCs here.

        Shipping & Logistics

        Whether you’re transporting goods, or learning about supply chains, warehousing, transportation and packaging, we’ve got you covered.

        Incoterms

        Need to know which International Commerce Term is right for your needs? Explore our curated guides from shipping expert Bob Ronai.

        Sustainability

        Prioritising sustainable supply chains? Building inclusive trade? Working towards the UN’s 2030 SDGs? Read the latest on global sustainable standards vs green-washing here.

        Customs

        Heading into international markets? From the correct documentation to standardisation, here’s what you need to know for a streamlined customs clearance process.

        TradeTech

        TradeTech is rapidly evolving to help reduce some of the biggest challenges when it comes to trade. Keep up with these innovations here.

    •  

       

    • News & Insights
      • News

        The latest in Trade, Treasury & Payments - stay up to date on all the changes across the globe.

        Magazines

        The issues feature experts across the industry on the latest developments with specific themed and regional editions.

        Articles

        Insights by the industry, for the industry. These include thought leadership pieces, interview write ups and Q&As.

        Guides

        Working closely with industry experts and trade practitioners we provide inclusive educational guides to improve your technical knowledge and expertise in global trade.

        Research & Data

        We undertake qualitative and quantitative research across various verticals in trade, as well as create reports with industry association partners to provide in-depth analysis.

        Trade Finance Talks

        Subscribe to our market-leading updates on trade, treasury & payments. Join the TFG community of 160k+ monthly readers for unrivalled access in your inbox.

    • Media
      • Podcasts

        Welcome to Trade Finance Talks! On our series we hear from global experts in trade, treasury & payments.

        Shorts

        Enjoy our bite-sized video content for insights on-the-go with our short VoxPop & summary series.

        Webinars

        Experience the true nature of the TFG community through panel discussions on the latest developments - engage with questions.

        Videos

        Join us as we interview leaders in international trade, treasury, payments and more! Watch and learn.

    • Events
      • Partner Conferences

        We partner with industry conferences around the world to ensure that you don’t miss out on any event; in person or online, add to your calendar now.

        Women in Trade, Treasury & Payments

        Get involved in our most important campaign of the year, celebrating the achievements of women in our industry and promoting gender equity and equality.

        Awards

        Our excellence awards in trade, treasury, and payments are like no other. You can't sponsor them, and they're independently judged. They are the most sought-after industry accolades.

        Online Events

        Join our virtual webinars and community events. Catch up on-demand, right here on TFG.

    • Editions
    • Finance Products
      • Trade Finance

        Trade finance is a tool that can be used to unlock capital from a company’s existing stock, receivables, or purchase orders. Explore our hub for more.

        Invoice Finance

        A common form of business finance where funds are advanced against unpaid invoices prior to customer payment

        Supply Chain Finance

        Also known as SCF, this is a cash flow solution which helps businesses free up working capital trapped in global supply chains.

        Bills of Lading

        BoL, BL or B/L, is a legal document that provides multiple functions to make shipping more secure.

        Letters of Credit

        A payment instrument where the issuing bank guarantees payment to the seller on behalf of the buyer, provided the seller meets the specified terms and conditions.

        Stock Finance

        The release of working capital from stock, through lenders purchasing stock from a seller on behalf of the buyer.

        Factoring

        This allows a business to grow and unlock cash that is tied up in future income

        Receivables Finance

        A tool that businesses can use to free up working capital which is tied up in unpaid invoices.

        Purchase Order Finance

        This is commonly used for trading businesses that buy and sell; having suppliers and end buyers

    •  

       

    • Sectors
    • Case Studies
      • Informing today's market

        Financing tomorrow's trade

        Soft Commodities Trader

        Due to increased sales, a soft commodity trader required a receivables purchase facility for one of their large customers - purchased from Africa and sold to the US.

        Metals Trader

        Purchasing commodities from Africa, the US, and Europe and selling to Europe, a metals trader required a receivables finance facility for a book of their receivables/customers.

        Energy Trading Group

        An energy group, selling mainly into Europe, desired a receivables purchase facility to discount names, where they had increased sales and concentration.

        Clothing company

        Rather than waiting 90 days until payment was made, the company wanted to pay suppliers on the day that the title to goods transferred to them, meaning it could expand its range of suppliers and receive supplier discounts.

        Get Trade Finance

        Informing Today’s Market, Financing tomorrow’s Trade.

    • Get Trade Finance
  • About Us
  • Talk To Us

Understanding MT 707: Amendment to a Documentary Credit

Last updated on 21 Aug 2024
28 Feb 2024 . 3 min read
Mark Abrams
Mark heads up the trade finance offering at TFG where his team focuses on bringing in alternative structured finance to international trading companies.

Access trade, receivables and supply chain finance

We assist companies to access trade and receivables finance through our relationships with 270+ banks, funds and alternative finance houses.

Get Started

Download our our free Letters of Credit guide

Letters-of-Credit
Download

ADVERTISEMENT

Contents

    The MT 707 plays a crucial role in the fluid dynamics of international trade finance, serving as a communication tool for amending the terms and conditions of a documentary credit. This guide aims to unpack the MT 707 format, shedding light on its users, purposes, potential challenges, and the advancements shaping its future use.

    The MT 707 message, utilised for amending a documentary credit, comprises various fields that facilitate precise modifications to the credit’s terms. Here’s a closer examination of its format specifications and some key fields:

    MT 707 format specifications

    • Scope: The MT 707 allows issuing banks to communicate amendments to advising banks, which can further relay these changes to other relevant parties. It is instrumental in updating the terms and conditions initially set forth by the documentary credit.
    • Functionality: This message type ensures that any changes, whether adding, modifying, or deleting terms, are clearly communicated and acknowledged by all involved parties.
    MT 707 Diagram - Information Flow

    SOURCE: SWIFT

    Key fields explained

    • 27 – Sequence of Total & 20 – Sender’s Reference & 21 – Receiver’s Reference: These fields ensure the amendment’s proper sequencing and provide unique identifiers for both the sender and receiver, facilitating accurate tracking and referencing of the amendment.
    • 31C – Date of Issue & 26E – Number of Amendment & 30 – Date of Amendment: Outline the original issuance date of the credit, the specific amendment sequence, and the date on which the amendment is made, crucial for historical tracking and validity of the changes.
    • 22A – Purpose of Message & 32B/33B – Increase/Decrease of Documentary Credit Amount: Identify the amendment’s intent and detail any adjustments in the credit amount, ensuring clear communication of the amendment’s nature and financial impact.
    • 59 – Beneficiary: Any changes to the beneficiary’s details are specified here, ensuring accurate identification.

    Network Validated Rules

    • C1: At least one field must be present after field 22A to validate the amendment’s content, ensuring that the amendment’s details are properly conveyed.
    • C2 & C3: Specify that either an increase or decrease in the documentary credit amount can be stated (but not both simultaneously) and that either field 50B (Non-Bank Issuer) or field 52a (Issuing Bank) must be present, enhancing clarity on the issuing entity and the amendment’s financial aspects.
    • C4: Dictates the exclusive presence of either the latest date of shipment (44C) or shipment period (44D), avoiding conflicting information on shipment timelines.

    Usage rules

    • Comprehensive amendments: When details exceed the MT 707’s capacity, additional information must be transmitted via MT 708 messages, allowing for an exhaustive presentation of changes.
    • Operative nature: The MT 707, along with any associated MT 708s, forms an integral part of the documentary credit, affirming the amendments as part of the binding terms unless specified otherwise.
    • Consistency and clarity: Amendments must be precisely defined to avoid repetition and ensure no conflicting information is presented across related messages.

    Who uses MT 707 and why?

    The users of MT707



    Banks and financial institutions across the globe employ the MT 707 for amending documentary credits in international trade. The issuing bank initiates amendments, which are then communicated to advising or transferring banks. This message type is pivotal for importers, exporters, and their financiers, ensuring that documentary credits accurately reflect the terms agreed upon by all parties involved.

    international trade

    Reasons for using MT707

    The primary function of an MT 707 is to adjust a documentary credit’s terms to align with changes in trade agreements or to correct errors. This flexibility is vital for adapting to evolving trade conditions, facilitating smooth transaction flows, and maintaining the integrity of trade financing operations. It allows parties to promptly address and implement necessary adjustments without needing to issue a new documentary credit.

    Potential issues and advancements

    Challenges with MT 707

    • Complexity and compliance: Amendments require meticulous attention to detail to ensure compliance with international trade laws and regulations, adding complexity to trade finance operations.
    • Operational risks: Incorrectly executed amendments can lead to disputes, delays, and financial losses, emphasising the need for accuracy and clarity.
    • Adaptation to changes: Rapidly changing trade environments and regulations demand agility and responsiveness from all parties, posing challenges in maintaining up-to-date amendments.

    Advancements impacting MT 707

    • Digitalisation and automation: The adoption of digital platforms and automation technologies promises to streamline the amendment process, reducing the potential for errors and enhancing efficiency.
    • Blockchain technology: Blockchain offers a secure and transparent framework for executing amendments, ensuring authenticity and non-repudiation while potentially reducing fraud risks.
    • Integration with electronic documentation: The move towards electronic documentation in trade finance can simplify the amendment process, allowing for quicker adjustments and better traceability.

    The structure of the MT 707 message is meticulously designed to cater to the dynamic needs of international trade finance, facilitating smooth and clear communication of amendments to documentary credits. Through its comprehensive format and strict validation rules, the MT 707 ensures that all parties remain informed and aligned on the terms of trade transactions.



    The MT 707 is indispensable in international trade finance, enabling parties to adapt documentary credits to changing circumstances efficiently. While challenges exist, technological advancements are paving the way for more streamlined, secure, and effective amendment processes, promising to enhance the agility and resilience of global trade operations.

    Speak to our trade finance team



    • More articles on SWIFT Messaging Types
    • Messaging Types Resources
    Latest
    A-Z Latest
    Back to Top