Trade Finance
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Description and objective: Role of Banks in International Trade and Methods of Settlement
Overview of banks involvement
Advantages/disadvantages to importer, exporter and banks in the main methods of settlement
Export/Import Documentary Collections
Relationship between Principal and Remitting Banker
Relationship between Correspondent Banks (agency arrangements)
Legal and practical issues regarding the duties of the remitting bank
Liability of the banks involved
Conditions for release of documents
Conditions for transfer of funds
Difficult areas of risk:
Use of Letters of Trust/Letters of Hypothecation
Procedures for Protest and underlying risks
Complexities of the Uniform Rules for Collection ICC 522
Documentary Letters of Credit - Introduction
Banker/customer relationship
Risk factors when issuing letters of credit
The autonomy of letter of credit operations (independence principle)
Contract between applicant and issuing bank - reducing risk
Legal opinion on contractual issues
Instructions to issue/amend credits
The importance of the application form (legal issues)
Front-end electronic systems (bank/applicant)
Workability of the credit
Key characteristics of Transport Documents & UCP 500 provisions
Marine/Ocean Bills of Lading
Charter party bill of lading
Multimodal Transport Document -
Air Transport Document
Road, Rail or Inland Waterway Transport Documents
Insurance Policy/Certificate
Examination of Documents
The standard for examination of documents
Key elements of the main articles of UCP 500
Processing non-compliant documents as issuing bank
Processing non-compliant documents as Nominated/Confirming Bank
Risks arising from non-adherence to UCP 500
Legal cases and ICC Banking Commission opinions
Bankers duties and rights
Analysing irregularities in documents
Fraudulent documents
Case studies on difficult issues affecting payment and rejection of
documents
Instructions to Advise Credits
Obligations and Risks associated with the Advising Bank
The use of the Bill of Exchange in Letters of Credit
Fraudulent Credits
Application of the Uniform Rules for Bank-to-Bank Reimbursement
ICC 525
Rationale
Concerns
Familiarisation of articles, including: types, parties, issuance,
documents and presentation
Related Issues
Release of goods connected with credits against indemnities issued or
countersigned by banks
Assignment of proceeds
Case studies based on opinions of the London Banks Documentary
Credits Committee
DC-Pro and DOCDEX - the ICC's documentary credit dispute resolution
system
Specialised Letters or Credit
Standby letters of credit and the International Standby Practices (ISP
98)
Transferable
Back-to-back
Red clause credits
Revolving & reinstatement credits
Contract Bonds and Guarantees
Types of guarantees
Risk assessment
Wording of guarantees
International banking practices
Uniform rules for demand guarantees
Problem claims and insurance against unfair calling.
Expiry and cancellation
Case studies
The Need for Financing International Trade (outside of letters of
credit)
Working Capital
Finding new markets
Trading with confidence.
Short Term Export Finance
Short Term Credit linked to Credit Risk Insurance
Medium and Long Term Financing
Risk Assessment and Types of Collateral
Identification
Assessment of risk
Measurement techniques for risk assessment
Forfaiting
Background and explanation
Classic forfaiting
Potential for deploying forfaiting product/service to meet client
requirement and need
Supplier Credit:
Types and method
Assessment
Measurement and management of risk
Lines of Credit:
Establishing
Defining
Monitoring and matching client requirements to need
Identification and management of risk
The Nature and Management of Foreign Exchange Risks in Trade
Finance
What is meant by foreign exchange exposure?
Techniques for managing the foreign exchange risks
Formalities and procedural matters
Bank attitudes to marking spot and forward exchange limits
HOW YOU WILL BENEFIT
This seminar will provide participants with a greater understanding of the products, procedures, legal aspects and risks in international trade. Those who complete the course will be able to discuss in detail the various methods of settlement and their benefits, identify customer needs and recommend appropriate product solutions, assess various risks to both bank and customer in international trade transactions and also identify ways of mitigating that risk.
Contact Redcliffe Training Associates
| Phone | +44 (0)20 7631 2090 When calling be sure to mention Training Pages
| Fax | +44 (0)20 7631 2060 |
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