Confirmed or Unconfirmed? Decoding MT 710 and Confirmation Fields

Intro

In trade finance practice, LC confirmations can sometimes get tricky—especially when MT 710 is involved, and the fields seem to give mixed signals. One reader sent in a great case about an MT 710 with “adding our confirmation” in Field 40B, but “without” in Field 49. Let’s walk through the logic step by step.

________

Question

Dear Mr. Old Man,

I have a question that needs your expert opinion.

We received MT 710 from Bank C with the following details:

• Field 40B – Form of Documentary Credit: IRREVOCABLE ADDING OUR CONFIRMATION
• Field 52A – Issuing Bank: BANK I
• Field 41A – Available with … by: BANK C BY NEGOTIATION
• Field 49 – Confirmation Instructions: WITHOUT

Is this a confirmed or unconfirmed LC?

Should the documents be presented to the issuing bank (Bank I), bypassing Bank C?

Thank you very much.

Best regards,

L.

_______

Answer

Hi L.,

Thank you for your question. Here’s my response:

1. Nature of MT 710

MT 710, as its name suggests—“Advice of a Third Bank’s or a Non-Bank Issuer’s Documentary Credit”—is an advice of a documentary credit sent by an advising bank, which has received the LC from the issuing bank or another advising bank. It is often used when the LC passes through more than one advising bank before reaching the beneficiary.

2. Confirmation under Field 40B and Field 49

According to SWIFT standards, Field 40B of MT 710 indicates the form of the credit and whether the sender is adding its confirmation.

• Since Field 40B states “IRREVOCABLE ADDING OUR CONFIRMATION”, it means the sender of the MT 710 (Bank C) has added its confirmation.
• Field 49 showing “WITHOUT” means that your bank (the receiver) is not being asked to add its own confirmation.

Therefore, the LC is confirmed—because Bank C has expressly confirmed it.

3. Where to present documents

Under UCP 600, sub-article 6 (a), a credit available with a nominated bank is also available with the issuing bank. This means the beneficiary could present documents directly to the issuing bank (Bank I).

However, since the LC has been confirmed by Bank C, the prudent course is to present documents to Bank C (the confirming bank). That way, the beneficiary enjoys the protection of confirmation, insulating them from issuing bank risk or country risk.

If, in the unlikely event, Bank C failed to honour, the beneficiary could still claim payment from the issuing bank.

Conclusion:

This LC is a confirmed LC, confirmed by Bank C. While documents could be presented to the issuing bank, the safer and more practical option is to present to Bank C as the confirming bank.

Kind regards,

Mr. Old Man