The MT-103 is a SWIFT payment instruction — a message sent by one bank to another to initiate a wire transfer. It is not, by itself, proof that any funds exist. Yet it has become the most commonly forged document in commodity trade fraud.
The fraud is simple: a buyer produces what appears to be an MT-103 confirming that funds have been dispatched to an escrow or transit account. The seller, believing the payment is in motion, releases the goods or ships the cargo. The MT-103 turns out to be fabricated. The goods are gone. The money never existed.
What a Real MT-103 Contains
A genuine SWIFT MT-103 includes specific field codes (Field 20: Transaction Reference, Field 32A: Value Date and Amount, Field 50: Ordering Customer, Field 59: Beneficiary). It is transmitted between correspondent banks over the SWIFT network — neither party to the trade ever sees the original message. What you receive is always a copy.
This is the fundamental vulnerability: you cannot independently verify a copy of an MT-103 without calling the issuing bank directly and confirming the transaction reference matches an actual payment instruction.
The MT-103/23 and Conditional Variants
More sophisticated frauds involve instruments purporting to be MT-103/23 (with third-party payment clauses) or MT-103 "one-way" arrangements where funds are claimed to be conditionally blocked pending delivery. These instruments do not exist in standard SWIFT nomenclature. Any broker presenting you with one should be treated as a fraud risk.
Verification Protocol
The only reliable way to verify a payment: call the compliance department of the named issuing bank, provide the transaction reference number, and ask them to confirm the payment instruction exists. Do not use contact details provided by the counterparty. Look up the bank independently.