The introduction and analysis of SWIFT cover and serial payments in a previous article provided us with a good foundation to move further. We can now consider concrete examples of SWIFT MT103 202 cover payments, see which parties are involved and the content of the messages that they exchange.

In this article, we will perform a detailed analysis of a MT103 announcement sent by the debtor bank to the creditor bank. Let’s first look at the picture depicting the messages and the different parties.

On the picture, Input and output messages are highlighted to make you aware that the message sent, is not exactly the same received by the receiver. The output messages that SWIFT sends to the receiver, have slightly different formats (See block 1 and block 2 definitions) than input messages.

What you see on the picture is a payment that a company in France, customer of BNP Paribas in Paris, wants to send to another company in Spain, customer of Banco Santander in Madrid. The payment is in USD currency. Since BNP Paribas and Santander are not located in the USD currency zones, the funds transfer happens through their correspondent accounts opened with Banks in the USA. In this example, we assume that the correspondent of BNP Paribas is Wells Fargo and the correspondent of Santander is Bank of New York Mellon. In any case, BNP Paribas sends a combination of SWIFT MT103 202 Cover messages for the transfer.

[box type=”info” size=”large” style=”rounded”]Major Banks in general create subsidiaries in other currency zones that they use as correspondents. Santander for instance would use Santander New York instead of Bank of New York as correspondent.[/box]

The table below contains the fields that are transported in the MT103 announcement message. An additional column (comments) provides further explanation, so that it is easy to understand each field and what it is used for.

Explanation Format Comments Sender BNPAFRPP The Sender BIC appears in header block (Block 1) in the MT103 Input and in the application block (Block 2) in the MT103A Output. Message Type 103 The message type is the second field of the block 2. Receiver BSCHESMM The Receiver BIC appears in header block (Block 1) in the MT103A Output and in the application block (Block 2) in the MT103A Input. Unique End-to-end Transaction Reference 121:d85a7574-863a-494d-bfbe-4084bf7704e1 This reference is provided in the user block (Block 3) and transported end-to-end. Message text This introduces the Text block (block 4). All the fields below are in the text block of the MT103 Announcement message. The MT103 and the MT103 announcement contains exactly the same fields. Sender's Reference :20:103REF405775 It is mandatory and of format 16x. Bank Operation Code :23B:CRED It is mandatory and of format 4!c. Instruction Code :23E:PHOB/+34.91.397.6789 It is optional and of format : 4!c[/30x] (Instruction Code)(Additional Information) Code PHOB means Phone Beneficiary. With this code, the sender requests the beneficiary bank to advise/contact beneficiary/claimant by phone when the funds will be received. Value Date, Currency, Interbank Settled Amount :32A:180828USD367574,90 It is mandatory and of format: 6!n3!a15d (Date)(Currency)(Amount) Currency, Instructed Amount :33B:USD367574,90 Normally optional in the standard. It must be provided because country code of Sender is FR and country code of receiver is ES. See Rule C2. Format 3!a15d (Currency)(Amount) Ordering Customer :50F:/01234567890 1/Company France SAS 2/28 RUE DENIS PAPIN 3/FR/CRETEIL 94400 Ordering customer information is mandatory and can be provided in three different formats according to the options A, F and K. Option F is chosen in this case with format: 35x (Party Identifier) 4*(1!n/33x) (Number/Name and Address) Sender's Correspondent :53A:PNBPUS3N Correspondent of sender (BNP Paribas). Sender has an account in USD with PNBPUS3N. Receiver's Correspondent :54A:IRVTUS3N Correspondent of receiver (Santander). Receiver has an account in USD with IRVTUS3N. Beneficiary Customer :59:/ES6300491800132710387658 Company Spain S.A. Santa Hortensia 26-28 28002 MADRID SPAIN Beneficiary customer information is mandatory and can be provided in three different formats: No letter option, Option A and Option F. No letter option is chosen in this case with format: [/34x] (Account) here in IBAN format 4*35x (Name and Address) Details of Charges :71A:SHA It is mandatory and of format 3!a. It can take 3 values: BEN, OUR and SHA. SHA means charges are shared between Ordering and beneficiary customers. End of message text/trailer

Read this page on the SWIFT formatting rules and Character sets of MT Messages to get additional information and understand what 16x, 4!c and the format of the field options mean.

The first message in the combination (of SWIFT MT103 202 Cover) that is analyzed in detail below is the MT103 announcement.

As usual, there is a lot to say about this SWIFT MT103 announcement message. The following narratives and notes allow to get a deeper understanding of the message content.

The Sender (BNPAFRPP) is informing / announcing to the Receiver (BSCHESMM) that funds are coming for a specific customer. The funds will be credited on receiver’s USD account  with its correspondent IRVTUS3N.

The presence of the Tags 53A and 54A indicate that there is no account relationship in USD, the currency of the transaction, between sender and receiver.

Field 53A indicates the Bank which is to provide the funds to the Receiver on behalf of the Sender.

Field 54A is the receiver’s correspondent, the Bank that will receive the funds on behalf of the Receiver.

Sender’s correspondent bank does not have account relationship in USD with the Receiver (BSCHESMM), therefore, Receiver’s correspondent bank must be added to the chain (54A:IRVTUS3N).

There is no ordering institution (52A) in the message. So the ordering customer is customer of the Sender.

There is no account with institution (57A). It means that the Beneficiary customer account (:59:/ES6300491800132710387658) is hold by the receiver.

Details of charges (Tag 71A) is SHA. The charges are shared between Ordering and beneficiary customer. Sender pays charges to ordering bank. Beneficiary pays charges to receiving and other intermediary banks.

This ends our analysis of the MT103 Announcement. We made an important step. But that is just one message in the combination of SWIFT MT103 202 Cover. You certainly want to look at and analyze the MT202 COV message as well. That will be the subject of the next article.