UNDERSTANDING RULE OF TRADE, LETTER OF CREDIT, DOCUMENTARY COLLECTION AND BANK GUARANTEE AND HOW TO MITIGATE THE RISK

TRAINING OBJECTIVE FOR UNDERSTANDING RULE OF TRADE, LETTER OF CREDIT, DOCUMENTARY COLLECTION AND BANK GUARANTEE AND HOW TO MITIGATE THE RISK

The training program was design with the following key objectives of learning to the participants:-

• To provide learning and knowledge experience to participants on the various type of payment method for import and export trade
• Develop full awareness to participant on the various type of Letter of Credit and the risk associated with each type
• Develop full awareness to participant on Documentary Collection and risk associated with the payment method
• Develop full awareness to participant on payment using Bank Guarantee and risk associated with the payment method
• Compare the various payment method listed in the training program

COURSE OBJECTIVES

By the end of the 2-day interactive session, the learning curve achieve will enable the following:-

• IDENTIFY the RISK of each type of payment and collection method
• UNDERSTAND the various payment mode available for international trade
• UNDERSTAND the advantage and disadvantage of each type of payment and collection mode
• IMPLEMENT best practices for international trade when dealing with payment and collection.

METHODOLOGY

This training will involve the following area to enhance learning:

• Power point presentation
• Case studies / Brain storming session
• Discussion on subject of learning
• Facilitating by trainer to enhance understanding of subject matter
• Notes will be provided
• Exercise to evaluate participants understanding

PARTICIPANTS GROUP

This training program is highly recommended for employees in purchasing, sales and marketing and logistics and other operational areas.

COURSE CONTENT

Module 1 – Challenges of International Trade (3 hour)

Training Content

• Buyer and Seller Obligation, Risk and Cost
• Title holder and Risk Transfer
• Incoterms Rules
• Type of Payment method available
• Type of Trade Financing – Forfaiting, Factoring, Letter of Credit, Documentary Collection and Bank Guarantee
• Quiz

Module 2 – Letter of Credit (LC) – 3 hours

Training Content

• What is Letter of Credit
• Rule Governing Letter of Credit
• Parties in Letter of Credit
• Revocable Letter of Credit
• Irrevocable Letter of Credit
• Type of Letter of Credit
• Red Clause Letter of Credit
• Claim, payment verification, discrepancies management
• Why letter of credit is popular
• Managing Risk with Letter of Credit
• Quiz

Module 3 – Documentary Collection (2.5 hour)

• Type of Documentary Collection
• Rule Governing Documentary Collection
• Managing Risk with Documentary Collection
• Documentary collection versus Letter of Credit
• Quiz

Module 4 – Bank Guarantee (BG) (1.5 hour)

• What is a Bank Guarantee
• Rule Governing Bank Guarantee
• Bank Guarantee Procedure and Purpose
• Type of Bank Guarantee
• Bank Guarantee versus Letter of Credit
• Managing Risk associated with Bank Guarantee
• Quiz

Module 5 – Risk Mitigation (3 hour)

• Type of Risk
• Mitigation on Cyber Security
• Fraud in International Payment system
• Quiz