MT 799 – PROOF OF FUNDS

QUESTION

Dear Duc Nguyen Huu

Sincere greetings!

How are you Bank Master?

There is currently a new seller who requires the buyer to provide proof of any bank-to-bank funds.

The buyer said that due to MT799/199, the entire payment needs to be deposited in the bank. Large companies have no problem due to their strong funds, but small and medium-sized companies will be worried.

If the seller does not have the goods by then, the buyer will be forced to freeze funds for 1-3 months.

Master,

The seller said that the buyer’s bank only needs to provide any proof of funds to the seller’s bank, and MT799/199 is not necessarily required.

So, I would like to know what proof of funds the buyer can ask the bank to provide? And the buyer’s funds will not be frozen.

Thank you for your support and help.

Best regards ️

Tang Lee

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ANSWER

Hi,

In international trade, when the seller doubts the buyer’s ability to pay, he may want to get confirmation from the buyer’s bank that the buyer has funds available in his account to pay (proof of funds), and the bank may use MT 799 or a letter to confirm the proof of funds.

The bank only confirms the proof of funds when the buyer has funds available in his account and the bank can block the funds.

In practice, proof of funds is rarely required in international trade. If the seller doubts the buyer’s ability to pay, he may choose a more secure payment method, such as prepayment or a letter of credit.

Best regards,

Mr. Old Man