Dates                                                                                

13-15 July 2010
8-10 November 2010
10-12 January 2011
9-11 May 2011
3-5 October 2011

Course Outline

This seminar will teach you about the various methods of settlement for import/export transactions and their benefits. It will explain the purpose of International Commercial Terms of Trade (INCOTERMS 2000) and their effect on a customer’s international trading activities.

Participants will learn how to identify customer needs and recommend appropriate product solutions, as well as assess various risks to both bank and customer in international trade transactions. They will also gain an ability to explain and identify ways of mitigating that risk and carry out the processes involved in documentary collections, documentary letters of credit and contract guarantees.

The course will also address the purpose and application of the various International Chamber of Commerce rules and practices, identify customer needs for finance of exports/imports and explain the features and benefits of each method.

Course Content

Role of Banks in International Trade Incoterms 2000 and Methods of Settlement
Overview of the banks involvement and, in particular, the advantages/disadvantages to Importer/Exporter in the use of Incoterms 2000 and in the main methods of settlement.

Key characteristics of Commercial Documents
Invoices
Marine/Ocean Bills of Lading
Title, negotiability and transfer
Control over goods
Delivery of goods
Charter party bill of lading
Multimodal Transport Document
Title/Negotiability/Transfer
Control over goods
Delivery of goods
Air Transport Document
Road, Rail or Inland Waterway Transport Documents
Insurance Policy/Certificate

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:
    • Partial payments
    • Avalising
    • Consignment of goods to banks
    • Release of goods on trust
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 600 provisions
Marine/Ocean Bills of Lading
• Title, negotiability and transfer
    • Control over goods
    • Delivery of goods
Charter party bill of lading
Multimodal Transport Document
    • Title/Negotiability/Transfer
    • Control over goods
    • Delivery of goods
Air Transport Document
Road, Rail or Inland Waterway Transport Documents
Insurance Policy/Certificate

Introduction to the International Chamber of Commerce UCP 600 Rules:
a structural comparison of UCP 600 and UCP 500;
the framework of the new UCP (articles 1-5);
structure and obligations under documentary credits;
standard for examination of documents; discrepant documents, waiver and notice;
the UCP transport articles;
transferable credits and other issues; and
changes at SWIFT for UCP 600

International Standard Banking Practice ISBP 681
What constitutes an “alteration” or “addition” to a document, when and how should these be authenticated?
How should documents be signed, if this is not explicitly stated in the credit?
How should one handle typing errors on documents regarding the name and address, different addresses of same company, etc.?
Must trade terms, such as Incoterms, appear on the invoice?
What is the “face” of a transport document and should a practitioner examine the reverse side to determine the name of carrier, description of the journey, etc.?
What is a full set of insurance documents, a copy vs. an original, endorsements, and the effective date?

Examination of documents
The standard for examination of documents
Key elements of the main articles of UCP 600
Processing non-compliant documents as issuing bank
Processing non-compliant documents as Nominated/Confirming Bank
Risks arising from non-adherence to UCP 600
Legal cases and ICC Banking Commission opinions
Bankers duties and rights
Analysing irregularities in documents
    • The current position on 'original' documents
Fraudulent documents
    • How banks and their customers become victims of documentary fraud
    • Are you financing trade or fraud?
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 725
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
    • Steamship guarantee/indemnities
    • Airway releases and delivery orders
    • Letters of Indemnity
    • Liabilities
    • The form of the Letter of Indemnity
    • Counter Indemnities
Assignment of Proceeds
Case studies based on opinions of the ICC and legal judgements

Specialised Letters or Credit
Standby Letters of Credit
Application of UCP 500
Transferable
Back-to-Back
Risks
Advanced worked example
Red Clause Credits
Revolving & Reinstatement Credits

Contract Bonds and Guarantees
Types of guarantees:
    • Tender/bid bonds
    • Performance bonds
    • Retention money guarantees
    • Advance payment guarantees
    • Maintenance guarantees
    • Bail bonds
    • General guarantees
    • Surety bonds
    • Indemnities/counter 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

IN ADDITION TO THE PUBLIC DATES ABOVE, THIS COURSE CAN ALSO BE TAILORED TO YOUR REQUIREMENTS AND DELIVERED IN-HOUSE FOR YOU.

PLEASE CIRCULATE THIS PDF AMONG YOUR COLLEAGUES!

IF YOU HAVE ANY QUESTIONS ABOUT THIS SEMINAR PLEASE WRITE TO US AT post@redcliffetraining.co.uk

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