INTRODUCTION FOR PRACTICAL INTERNATIONAL TRADE FINANCE
International trade finance is crucial for professionals who want to master the key knowledge, calculations and documentation needed in business and international trade.
The case study will provide you with “real-life” situations and allow you to apply the content and knowledge you have acquired during this course, specifically showcasing the logic and ease of trade finance products and which ones to use under various circumstances.
On completion of the course, participants will have developed a good foundational understanding of global trade and how companies settle their cross border commercial activities, basic needs are, identify the risks as well as financial instruments available to mitigate those risks.
LEARNING OBJECTIVE
On completion of the programme, participants will be able to:-
- Gain in-depth knowledge of International Trade Finance based on best practice from International Chamber of Commerce (ICC)
- Understand Trade Documentation and Payment Methods
- Master the Basics of Trade Financing Instruments such as Letters of Credit, Guarantees, and Collections
- Get an overview of ICC Incoterms 2020
- Apply the most relevant documents required to settle a commercial contract.
WHO SHOULD ATTEND
Entrepreneurs, business professionals, or professionals in managerial, senior and junior executive level who is involved in preparing, requesting and processing trade finance relating to their organization involved in international trade. This can be extended to general practitioners working in banks, corporates, or financial institutions in functions such as Relationship Management, Credit, Compliance with an interest in trade finance.
TRAINING METHODOLOGY
Where appropriate, activities will include the following:
- Lecture & Videos
- Faciliated Group Discussions & Spot Quiz
- Practical hands on learning activity using case studies
Note: Participants are required to bring laptop for excel exercises and powerpoint presentation
COURSE OUTLINE
The key content of the program includes the following:
MODULE 1: OVERVIEW, FLOW AND CONCEPTS
- Flow of international trade and sources of finance and how business settle payments for their settle their cross border commercial activities
- Common Terms associated with International Trade
- Understanding Risks in Trade Finance
- Trade Finance as Working Capital Management
- Identification and assessment of risks in international trade.
- Types of risks (e.g., commercial risk, political risk, exchange rate risk).
- Mitigation techniques for different types of risks.
- Role of insurance in trade finance
MODULE 2: TRADE FINANCE INSTRUMENTS AND PAYMENT METHODS
- Trade Finance Instruments and Structures for export finance, import finance and supply chain finance and forfaiting
- Classification of payment methods and factors which determine choice of payment
- Advance Payment, Escrow account and Open Account Methods
- Documentary Collections and Avalisation/Banker’s Acceptance Methods
- Deferred Payment Undertakings and Bank Guarantees
MODULE 3: DOCUMENTARY COLLECTION METHODS
- Process flow
- Roles and parties in collection methods
- Collection instruction by banks
- Responsibilities in the export/outward collection desk of a bank
- Responsibilities in the import/inward collection desk of a bank
- Job set up for import bills
MODULE 4: UNDERSTANDING LETTER OF CREDIT (LC)
- Definition, Process flow and roles of bank
- Types of Letters of Credit (Confirmed versus Unconfirmed, Real Clause, Creen Clause LC, Revolving Credits, Transferable LCs)
- Common terms associated with letter of credit.
- Learning activity: Drafting Letter of Credit
- Balance of Risk Between Exporter and Importer for different payment methods
MODULE 5: UNDERSTANDING BANK GUARANTEE (BG)
- Bank Guarantee – Definition and Process Flow
- Application: Types of BGs, nature, purpose and scenarios
- Validity of the BG Limit Vs Validity of an individual BG
- Comparison of Letter of Credit versus Bank Guarantee
MODULE 6: SAMPLES OF REAL-LIFE DOCUMENTATION
- Invoices/Certificates/Transport Docs/Insurance
- Incoterms® 2020 Overview
- Changes versus previous Incoterms
MODULE 7: REGULATORY FRAMEWORKS AND TRENDS RELATING TO INTERNATIONAL TRADE FINANCE WITH CASE STUDY APPLICATION
- What is Trade Based Money Laundering (TBML) ?
- What is the Financial Action Task Force (FATF) ?
- Digitalisation of trade finance
- What is sustainable trade finance?
- Case study Question, Answer and Presentation
