Understanding MT199 and MT799: Can They Prove Product Existence?

In international trade finance, SWIFT messages like MT199 and MT799 are commonly used for bank-to-bank communication. These tools help confirm financial details, such as the availability of funds or arrangements for a transaction. However, they are often misunderstood—and sometimes misused. A key point to clarify: MT199 and MT799 do not serve as proof of products or guarantee the quality, existence, or shipment of goods.

Here’s what you need to know about these SWIFT messages, their limitations, and how to protect yourself from potential scams.

What Are MT199 and MT799?

• MT199: A free-format SWIFT message used for general communication between banks. It might include clarifications, instructions, or updates related to a financial transaction.
• MT799: Another free-format message, often used as a pre-advice or confirmation of intent before issuing formal financial instruments like a letter of credit or bank guarantee.

These messages are purely financial tools. They facilitate communication about money, not merchandise. They do not—and cannot—verify the physical existence or condition of goods in a trade deal.

Can a Bank Issue an MT199 or MT799 for Proof of Products?

No. Banks do not use MT199 or MT799 to prove the existence, quality, or shipment of products. These messages are not designed for that purpose. If someone claims an MT199 or MT799 serves as “proof of goods,” this is misleading and could indicate a scam. Legitimate proof of products comes from documents like bills of lading, inspection certificates, or photos of goods at loading—none of which are part of a SWIFT message.

Red Flags: Spotting Scams Involving MT199 and MT799

Fraudsters often exploit the complexity of SWIFT messages to deceive buyers. Watch for these warning signs:

• Misuse of MT199 or MT799: Scammers may claim these messages prove goods exist or have been shipped, creating a false sense of security.
• Requests for Advance Payments: Be wary if a seller demands upfront fees or payments based solely on an MT199 or MT799, without verifiable evidence of goods.
• Lack of Transparency: If the seller avoids direct communication or refuses to provide tangible proof—like shipping documents or inspection reports—it’s a red flag.
• Unverified Parties: If the buyer, seller, or bank involved is unknown or cannot be independently confirmed, proceed with caution.

How to Protect Yourself

To ensure a safe transaction, follow these steps:

1. Verify Independently: Contact the issuing bank directly to confirm the authenticity of the MT199 or MT799 and the details of the transaction. Don’t rely on documents provided by the seller alone.
2. Demand Proof of Goods: Request concrete evidence, such as:
   • Shipping documents (e.g., bill of lading)
   • Inspection certificates from trusted firms (e.g., SGS, Bureau Veritas)
   • Photos or videos of the goods at loading or in storage
3. Use Secure Payment Methods: Consider an escrow service or letter of credit to hold funds until the goods are delivered and verified.
4. Seek Expert Advice: If you suspect fraud or aren’t sure about the deal, consult a trade finance expert or legal advisor before committing.

The Bottom Line

MT199 and MT799 are valuable tools for financial communication, but they are not substitutes for proof of products. Misrepresenting their purpose is a common tactic in trade scams. Always exercise due diligence in international transactions—verify the goods, the parties, and the payment process independently. By staying informed and cautious, you can protect your business from costly fraud.

Have questions about a specific trade deal? Contact us for tailored guidance. info@ametheus.com