MT720 (Transfer of Documentary Credit)

MT720 is one of the SWIFT (Society for Worldwide Interbank Financial Telecommunication) message standards, with the full name 'Transfer of Documentary Credit'. It is used in transferable documentary credit business. When the original beneficiary (first beneficiary) transfers part or all of the rights under a documentary credit to a second beneficiary, the transferring bank notifies the second beneficiary via an MT720 message. Use case: In intermediary trade, the intermediary, as the first beneficiary, transfers the credit to the actual supplier (second beneficiary) to earn the price difference. Notes: MT720 must be based on a credit expressly marked 'Transferable'; the transferring bank must act on the instructions of the first beneficiary, and the terms of the transferred credit (such as amount, unit price, expiry date, etc.) must not exceed those of the original credit; transfer may be made only once (unless partial transfer is permitted under the original credit). Difference from MT700 (Issue of a Documentary Credit): MT700 is issued by the issuing bank to open a credit, while MT720 is used by the transferring bank to transfer a credit; the message formats and purposes are different. It is also different from MT707 (Amendment to a Documentary Credit): MT707 is used to amend credit terms, while MT720 is used for transfer. Foreign trade practitioners should note: the MT720 message will clearly set out the details of the transferred credit, and the second beneficiary should check them carefully to protect its own rights and interests.