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A little about Swift MT 760 and MT 799 in Trading Processes

If you have been in the private placement business for a while, you probably know that there are plenty of acronyms associated with trade programs. As someone new to the business, you may hear phrases like: “MTN”, “BG”, “SBLC”, “PPP”, “DTC”, “CIS”, “POF”, and say, “what the heck are they talking about”?  Well, though it is good to know private placement lingo, cool sounding terms do NOT close deals. If you want to protect yourself and succeed in private placement, you MUST understand the 2 most important acronyms of all, the “MT 760” and “MT 799”.

Whether you are a client, broker, consultant, or even just a beginner, the MT 760 and MT 799 are two terms that are critical to learn inside and out!.  Many times, if you speak to brokers who claim to have trade programs, you can tell if their investment is real by asking just one question, “Explain the MT 760 and MT 799, what are the risks and fees?” If you get an answer that sounds similar to the explanation we give below, then you may want to dig a little deeper! If you don’t, recognize that these people are less educated than they claim, and may not be the best option. First things first, let’s explain the definition and application of these terms in the modern day private placement business.

The MT 799 is a swift message used between banks to communicate in written form, and is usually referred to as “pre-advice”.  For example, Bank “A” may send a MT 799 to Bank “B” stating: “We confirm “XXX” amount on deposit and are ready to block this amount via MT 760 in favor of account “XXX” at your bank.  Please confirm readiness and receipt.” Typically, the MT 799 will be needed directly before the MT 760 is issued, and there may be small fees.  Despite what most brokers may claim, the MT 799 is NOT used as collateral,and can NOT be used to enter a private placement program.  Now that we know about the MT 799, let’s take a look at it’s cousin, the Swift MT 760.

The MT 760 is a swift message used to block funds in favor of someone other than the owner, collateralizing the asset via this message, while allowing for loans and liens against it.  For example, most private placements require the investor to send a MT 760 to the trader’s account, allowing the trader to use this swift as a collateral guarantee for their bank.   Again, despite what many brokers may claim, this is NOT everything you need to know about the MT 760. Now that you do know the definitions and applications, let’s cover the key points no one ever brings up about the MT 760: the FEES, and the RISKS…

First and foremost, the fees for blocking a large amount of funds via MT 760 can be more than you would expect. In most cases, your bank will charge 1-2% of the value being blocked for this service.  For example, on a 100M bank instrument this can be 1-2M that the owner must come out of their pocket with, unless they have a special relationship with their bank. You may say to yourself, “Wow, that is a lot to spend on fees for something I’m not sure will work”! Well, even more importantly, let’s take a look at the risks if you did move forward.

If you complete the MT 760 and pay the fees, you should observe everything very closely from that point on.  Once the MT 760 has hit the account of the trader, the line of credit should become available within 72 hours.  At that time, the trader should be able to make their first bank instrument purchase, and give you a DEFINITE TIMELINE for your first profit disbursement.  You may say, “Why do I need to watch this process so closely?”  Well, here is the part that most brokers don’t tell their clients…

When blocked in someone’s favor, the MT 760 collateralizes assets in the form of a swift guarantee, and by doing so, allows the beneficiary to draw credit against it.  This means, if the loan to the “trader” was defaulted on, the bank would seize the collateral and you would be out of your money! Though this scenario is possible, I would consider it rare for two reasons…  In today’s world, no bank will loan Millions of dollars to someone they haven’t vetted, no matter what collateral is on hand.  Second, the MT 760 is quite rare, and this usually draws attention to the beneficiary of the swift.

In summary, the MT 760 can be safe, or it can blow up in your face.  As always, the key is having a real trader and most importantly, getting your payments as scheduled.  If the trader makes a statement about yields and a time line, they must ALWAYS keep in line with their promises.  Over the THOUSANDS of transactions we have been involved in, the only ones that have closed have been smooth from the start, with NO hiccups.

Remember, both RISK and FEES are a part of blocking funds via MT 760!!!!
 In addition, by understanding the MT 760 and MT 799, you can clear out the TIME WASTING brokers from your network, and work MORE EFFICIENTLY towards your goals.

Let’s face it, very few people know as much as you do after reading this article. Use it to your advantage to qualify the private placement investments you come across, and it will make life a lot easier.  Ask yourself, if someone can’t explain the MT 760 and MT 799 in thorough detail, do you think they have ever closed a deal?  Then ask yourself, do I want to risk Millions with someone that has NEVER been successful?  It’s not hard to see, education is the key!
This Article submitted by InsideTrade LLC Staff.


Risk Management

We underline our risk management as a central part of our strategic management. All our business processes methodically address the risks attaching to our partners activities with the goal of achieving sustained benefit within each activity and across the portfolio of all their activities during cooperating with our company.

 Our strategy to minimize market price risk, evade from payment risks and ghost companies. We are aiming to exploit market opportunities on a limited risk with best results.

 CASPIOIL advises its clients in the use of the entire spectrum of negotiating tools and techniques to purchase commodity derivatives. CASPIOIL’s risk management expertise enables its clients to value and exploit market opportunities in conjunction with their physical energy activities and shipping operations in order to maximize profitability. We also provide some arranges for the transfer of such risks to financial institutions including commercial banks and insurance companies

Turkey Will Play Strategically Big Role in Energy Transaction II.

Turkey Will Play Strategically Big Role in Energy Transaction II.

I divided my article into 5 parts; in first part I mentioned about importance of the Middle East and briefly determined socio-economically position of this geography. Lets first try to understand problems of these countries then we will investigate, economical growth, demographic importance, strategies of all countries in the future and then we will describe European economy position and a bridge between the Middle East and Europe.

So why the problem in the Middle East still existing and has not been solved yet? I think that we have to separate into two main issues. One of them is very known problem which occurred after Second World War by establishing Israel in the middle of the Middle East and Palestinian Dram.

More conflict is caused over the status of Israel, especially in their aggressive military actions used to subjugate much of ancestral Palestinian land contrary to the UN Partition Act of 1948, which split the Palestinian/Israeli Territory into roughly 2 equal parts. The Israeli, for their part, argue that they need to protect and defend own nation and political, social and economical pressures to Palestine people tenses other Arabic countries.

The second issue is too many different demographical nations and religious sects or denominations are living very close to each other. From dozens of Muslim sects or denominations we can say that several from them by their popularity Sunnite, Shiite, Batiite(cabalists), Alavi, Haricii and many of small sects. Conflicts between them are the biggest problem in The Middle East. To combine them into one society and into one relic is very hard. All of them have different mentality against to life and religion, and expecting from government courtesy and neutrality against their faith and religious belief. In non-development and non-democratic country rulers and dictators dictate to citizens by their own opinion. They do what majority want, not plurality.

 All these create problems in the country. To resolve these problems can be only by democratization of these countries, democratic rules and democratically live their religion as they want to live with total respect to each other. By economical growth people are getting ability to compare their countries with another countries and willingness to live in total democratic place pressures rulers to be changed. By developed economy many problems will be resolved and these states will quickly grow up and take the important place in global economy.

Rustam Magamat   

SWIFT MT799 and The Banking Procedure

Many of global traders are using the most accepted financial instruments. This instruments are very complex and not easy to understand by comparing them with others. Here a copact information about  MT(Message Text)799


The MT-799 is a free format SWIFT message type in which a banking institution confirm‍s that funds are in place to cover a potential trade.

This can, on occasion, be used as an irrevocable undertaking, depending on the language used in the MT-799, but is not a promise to pay or any form of bank guarantee in its standard format.The function of the MT-799 is simply to assure the seller that the buyer does have the necessary funds to complete the trade.

What does the SWIFT MT-799 option provide?

An account with the SWIFT MT-799 capability allows bank-to-bank SWIFT electronic verification for Proof of Funds in compliance with the SWIFT Category 7 “Treasury Markets & Syndication” message types.

Often there is a misconception that a particular circumstance requires a SWIFT MT760message, when in fact, the SWIFT MT-799 format provides the required bank confirmation for the application. There is a $1 million minimum account size for a SWIFT MT-799, and additional costs apply.

The MT-799 is usually issued before a contract is signed and before a letter of credit or bank guarantee is issued. After the MT-799 has been received by the seller’s bank, it is then normally the responsibility of the seller’s bank to send a POP (proof of product) to the buyer’s bank, at which point the trade continues towards commencement.

The actual payment method commonly used is a documentary letter of credit or an MT-103 (wire transfer), which the seller presents to the issuing or confirm‍ing bank along with shipping documents. Once the bank confirm‍s the documents, the seller is then paid.

An alternative method is to use a bank guarantee in place of a letter of credit. It is normally at the seller’s discretion which method of payment is used.

How Do I Issue An MT-799 Swift Message

The short answer is that you don’t. Approach your bank, and make an arrangement with them to have an MT-799 wired to the seller’s bank. Some banks are reluctant to issue MT-799’s, as these make them liable for the full cost of the trade, which can sometimes be in the millions.

A bank will normally not issue an MT-799 without some form of collateral to secure their own interests, so be prepared to put up a hefty amount of collateral.

 What Does A MT-799 Look Like?

An MT-799 is an automated message sent electronically from one bank to another, so you won’t really ’see’ an MT-799 at all. The paperwork associated with an MT-799 will vary from bank to bank, though most banks follow a similar format.

What Information Do I Need To Send A MT-799?

You will need the following information to send an MT-799.

  • Name of the advising bank.
  • LC Number.
  • LC Amount.
  • Tenor of Draft.
  • Latest shipment date.
  • Person or entity liable for confirmation fee.
  • Whether the LC is restricted for negotiation or not.
  • • A description of the merchandise.
  • • Port and/or country where product will be loaded.
  • • Port and/or country where product will be unloaded.

Oil and Refineries

Oil and Refineries

The debate is raging in full swing: the dearth of new refineries in the US. Many are surprised to see the continued increase in oil prices despite the surge in domestic oil production. Could refineries be the missing element in the equation, they wonder. ‘Why not just build new refineries and scale down the price of oil,’ our readers continue to ask us. Yes, it’s a fact- no new refinery has been built in the US in the past three decades. The last refinery constructed in the US at Garyville, Louisiana was way back in 1976. So, the question is reiterated as the point is so obvious: new refineries. But then, there aren’t any easy three reasons, nor is the dimension only four.

First though, let’s take a look at the prevailing price of oil. According to a AAA fuel gauge report, the national average for a gallon of gasoline is $3.62 – more than 13 cents from the previous week and 24 cents more than a month ago. After the fall in May and June, gasoline prices have increased gradually for the last seven weeks, adding pain to the already pained consumer. Is this because of dwindling oil reserves? Well, of late domestic oil production has increased by fourteen percent in the last 12 months. According to government sources, the oil production in the country hit the highest ‘quarterly level’ in almost a decade (for the first three months of this year). And, US produces 55 percent of the oil consumed in the country, mainly due to production spikes in Texas and North Dakota.

Clearly there is oil, so shouldn’t the oil price decrease? After all, the more the commodity, often, lesser is the prices. Put it that way, the present oil prices do sound ominous. It’s not as if higher demand has hiked the oil prices. On the contrary, demand for oil has been decreasing with fuel efficient cars and ethanol blended gasoline. This July, crude oil demand in the U.S. dipped to its lowest in four years on the back of average economic growth in the country, according to the American Petroleum Institute. The demand for gasoline fell 3.8 percent this July with consumption down 1.1 percent. After the peak in 2007, demand for gasoline has been sluggish. That is, despite increase in the price of crude, demand for gasoline is at record low. So, the speculation does gain force – are lack of refineries hampering the fall in the price of oil? North Dakota produces more than 600,000 barrel/month but has only one refinery in Mandan. An element of bafflement does linger to see the country producing substantial oil and yet importing refined products.

There is colossal gap in the realm of production and refining capacity in the country. The refineries are churning at full capacity which makes them profitable, but on the downside there is no room for mistake. They have to deal with variable demand on one hand and higher costs of inputs on the other. Recently, Sunoco Inc. announced closure of its largest refinery leading to fears of fuel shortage and higher oil prices in the US. Fortunately, a deal with the Carlyle Group saved the day for Sunoco Inc. and the oil industry. But, the problems in the refining sector are far from over. Two refineries owned by Sunoco Inc. did close in the last eight months, which means a loss of nearly half the gasoline and other refined products in the East coast.

True, new technologies have increased the domestic oil production. For once, though, the infrastructure in the US has failed to catch up with the surging domestic oil production. Barges, rails and trucks, believe it or not, still transport crude. Naturally, the oil barely reaches the refineries and this mode of transport also makes oil more expensive for the consumer. How about pipelines? We know that imported oil is expensive. Still, the Marcus Hook refinery continued to import oil at $114 a barrel in 2011, even when the West Texas Intermediate crude traded lower. Why? Lack of pipelines, again. And with this paucity in pipelines, crude produced in the country isn’t reaching the refineries. Of course, the much hypedKeystone XL pipeline would connect Canada’s oil with refineries in the Gulf of Mexico and Houston, but that may take years.

Staying with refineries, the need for pipelines is more pronounced in the Gulf coast. The refineries in the Gulf coast contribute about 45 percent of the refining capacity, and 30 percent total crude oil production in the US. Of late, the imports have declined in the Gulf coast, thanks to drilling in the Eagle Ford Shale in Texas and Bakken shale in ND. Unsurprisingly, import of the more expensive light sweet Nigerian crude stood at 150,000 b/d in January, the lowest since 1996. (For the corresponding period, there’s decline in the import of Nigerian crude to the East coast too.) Yet, imagine the figure with more pipelines in the region. Yes, the crude from Eagle Ford from Texas has started to arrive in the Gulf coast. However, the crude is sweet light. Most of the refineries in the Gulf Coast are more sophisticated, designed to process heavy and more sour crude. As investment to refine the lighter sweet crude is expensive, the only option for the refineries is to blend the different crudes. The irony.

Meanwhile, woes of the refineries in the East coast continue. Two have already closed, and the rest of them are barely managing to scrap through. These refineries are dependent on imported crude as they don’t have easier access to cheaper West Texas Intermediate crude. Hence, they continue to import the expensive Brent crude. There are plans to transport oil from North Dakota to the East coast by rail, but when?

Although a continuation of the import story, the scene is slightly different in the Midwest. The refineries here are enjoying higher profits, credit to generous supplies from Canada and domestic oil. Imports from Canada reached 1.76 million barrels a day in the first quarter of 2012, an increase of almost 22 percent from last year (Source: EIA). Unsurprisingly, Canada is the largest supplier of crude to the US followed by Saudi Arabia.

Recently the Port Arthur refinery underwent expansion to almost double its daily capacity. So, why do refineries expand rather than build new ones? It’s easier because of the environmental regulations. The apparent lack of logic in not having refineries does get answered when you take the environment under consideration. Refineries gobble up water, not to mention vast tracts of land, and contribute loads of CO2 to the air, as well. So, environmental regulation tends to be hard for anyone interested in refineries. The EPA regulations are also strict on the sulfur content Light crude is easier to process, has lower sulfur content so it’s easier to get the environmental nod. Heavy sour crude, on the other side, has more sulfur and is more difficult to process. Sunoco Inc. is said to have lost $ 1 billion in the last three years, attempting to upgrade in accordance with the stricter EPA regulation.

Will the picture change? Everyone wants refineries, just is someone else’s backyard. The new EPA regulation for new refineries scheduled to be released this November has been deferred because of the Presidential elections. How is it going to pan out? Mitt Romney is all for more drilling. He wants to drill “virtually every part of U.S. lands and waters” but is silent on his take on refineries. For his part, Obama is for ‘energy independence’ but with his strict environmental laws, no refinery is going to come up anytime soon. The situation is precarious. The demand isn’t expected to rise anytime soon. EIA has lowered the forecast of oil consumption in 2012 and 2013.

Any destruction due to accidents (like the recent fires), weather conditions, and maintenance would affect the supply with immediate effect. For instance, the recent fire in the Chevron refinery at Richmond, California disrupted almost 16% of the supply in the region. Abundant reserves, yet prone to import fluctuations- which country would want to continue in this position?

If the refineries aren’t taken care of, the dream of cheaper crude would continue to be a dream. That would be sad with the present domestic resources.


Turkey Will Play Strategically Big Role in Energy Transaction I.

Turkey Will Play Strategically Big Role in Energy Transaction I.

We can’t say what will happen in the future but we can predict it by investigating history of past and current positions of Turkey Republic in the Middle East and Europe as well. In the past we all know that Turkey as ‘’Republic Country’’ was built from Ottoman Empire’s leftover. We can also say that the only one empire had so many countries encompassed in the world. I want to show you the map of Turkey Republic and Ottoman Empire. It will help us investigate geographically Turkey position in map and other countries around Turkey.


Here on map you can easily see highly strategic position of Turkey in the Middle East. Middle East is the only one place in our earth that has very hard place with lots of problems; political, demographical, education, health and many other problems, making this geography chronically disaster. This is totally true but Middle East is known not only because of this disasters. We also know that Middle East holds more than 61% of total energy resources in our world. If we include hangover countries of Ottoman Empire some of which are located in North Africa and other Turkish republics in Central Asia like; Kazakhstan, Uzbekistan, Turkmenistan, Azerbaijan, and part of Russian Federation. With following countries Turkey has more than 75% of global energy around its geography.


In first part in my article I made you understand the geographical importance of Middle East. We discussed about its chronicle problems etc. In second part I’ll try to explain you development rates of Middle East and economical problems to explore and export this resources to its consumers.

Rustam Magamat

CEO/ ITCO Global

BP to the Rescue for Midwest Drivers

BP to the Rescue for Midwest Drivers

British energy company BP said this week it was nearly finished with upgrades to its Whiting oil refinery in northwest Indiana. Its largest refinery in the United States, the British supermajor said the upgrades have returned the facility to its full design capacity. The company said the facility provides enough fuel to markets in the Midwest to meet the daily gasoline demands of nearly half a million passenger vehicles. That in turn may help with regional supply issues and drive gasoline prices down for Midwest consumers.

BP said the construction of upgrades to the refinery is more than 95 percent complete. The rest of the work should be finished by the end of the year, though a new crude oil processing unit brought on line this week “has returned the refinery to its nameplate processing capability of 413,000 barrels per day.”

The company said the timing of the development comes as North American oil production gains are pushing foreign imports to record lows. BP said the Whiting facility already provides the U.S. Midwest with enough gasoline to keep 430,000 passenger vehicles and 22,000 commercial trucks on the road each day. Whiting can process U.S. and Canadian crude oil.

The upgrade is good news for consumers in the region. The U.S. Energy Department reported last week that planned and unplanned refinery issues in the region meant gasoline inventories were lower than average, meaning pain at the pump for American commuters. Regional consumers were paying record prices for a gallon of regular unleaded gasoline, with drivers in downtown Chicago paying 20 percent more for gasoline last month against the national average.  While some areas are reporting prices are on the rise again, it’s likely a response to the upcoming Independence Day holiday in the United States. Oil prices on the international market, meanwhile, are increasing because of the unrest in Egypt, meaning there will be some trickle-down pain for retail gasoline consumers.

The U.S. Energy Department said refineries in the Midwest don’t have the capacity to meet regional demand for gasoline. This is especially the case during the so-called summer driving season, when American families hit the road for vacation. Lower-than-expected production from the Whiting refinery only added to the regional gasoline stress, meaning the U.S. Midwest typically had gasoline prices higher than the rest of the country. According to motor group AAA, however, the region is now in the bottom tier in terms of gasoline prices, where the pain at the pump is about 2 percent less than the national average.

The Energy Department last month said it expected U.S. gasoline prices to average $3.53 per gallon for the season.  OPEC said in June that inventories were adequate though its update next week is likely to be an indicator of things to come. For now, however, U.S. motorists headed out for holiday this week can brief at least a temporary sigh of relief.

By. Daniel J. Graeber of