WHAT'S NEW?

FINANCIAL MARKET COURSES

Trade Finance

Courses In This Course

International trade involves commercial transactions between buyers and sellers in different countries. One of the primary challenges in cross-border trade is ascertaining a method of payment that is acceptable to both importers and exporters. Historically, documentary forms of payment such as letters of credit and documentary collections were favored. While still used, these methods of payment are now less popular than trading on open account terms. The problem with the latter is that it exposes exporters to significant risk.

 

Other issues associated with international trade include access to pre-export finance in order for sellers to fulfil their customers’ orders, and the availability of security instruments such as guarantees and export credit insurance to reduce the uncertainty associated with trading across borders.

Objectives

In this course, you will explore:

The fundamentals of trade finance, including the risks involved

The use of open account terms in international trade

The basics of documentary collections and documentary credits (letters of credit)

The different types of letter of credit

Learner Profile

This course is designed for financial market professionals who need to better understand the fundamentals of international trade finance, including the various methods of payment available.

  •    TRADE FINANCE - AN INTRODUCTION

    Overview

    Many of the products we buy and consume on a daily basis are traded internationally. In some cases, these items will have been transported half-way across the world before arriving in our shopping baskets. However, cross-border transactions present a number of potential difficulties for the parties – importers (buyers) and exporters (sellers) – involved. In addition to dealing with the practical problems arising from the movement of, and payment for, goods from one country to another, importers and exporters are simultaneously subject to numerous risks related to differing legislation, customs, and practices in these countries.

     

    This course provides an overview of international trade finance, including the main risks associated with cross-border trade, the various payment methods used by importers/exporters, the key commercial documents, and the role of banks in international trade.

    Course Duration

    75 mins

    Prerequisite Knowledge

    Financial Markets – An Introduction

    FIND OUT MORE

  •    OPEN ACCOUNT TRADING

    Overview

    With the growth in both the volume and value of global trade, there has been a significant shift away from the use of traditional trade instruments such as letters of credit. The majority of international trade now takes place on open account terms, where an exporter ships goods to the importer without receiving cash or any other legally binding undertaking at or before the time of delivery.

     

    This course looks at open account trading, how it works, the risks it poses for exporters, and how they might go about reducing their exposure to some of those risks. The course also describes the role of SWIFT’s Trade Services Utility (TSU) in open account trading.

    Course Duration

    50 mins

    Prerequisite Knowledge

    Trade Finance – An Introduction

    FIND OUT MORE

  •    DOCUMENTARY COLLECTIONS

    Overview

    Documentary collection is a service provided by banks to sellers (exporters) involved in international trade. To some extent, you can think of a documentary collection as an international ‘cash on delivery’ method of payment. The buyer either pays for goods at delivery or gives an undertaking to pay for them in the future by signing an enclosed draft or bill of exchange. However, there are a couple of crucial distinctions between a typical cash on delivery transaction and a documentary collection.

     

    This course describes how documentary collections work, distinguishes the different types, outlines the role of the parties involved, and lists the benefits and drawbacks of this method of payment. It also explains the Uniform Rules for Collections (URC), the internationally recognized rules covering collection operations for documentary collections.

    Course Duration

    50 mins

    Prerequisite Knowledge

    Trade Finance – An Introduction

    FIND OUT MORE

  •    LETTERS OF CREDIT - AN INTRODUCTION

    Overview

    Letters of credit – or documentary credits – have long been used as a method of payment in international trade. In simple terms, a letter of credit (L/C) is a guarantee of payment by the importer's bank to the exporter, if certain terms and conditions stipulated are met. In essence, a L/C substitutes the credit of the bank for that of the buyer for the purpose of facilitating trade.

     

    This course describes the basics of letters of credit and how they work. It also outlines their benefits and drawbacks as a trade finance instrument, and describes their risks from the point of view of importers, exporters, and participating banks.

    Course Duration

    50 mins

    Prerequisite Knowledge

    Documentary Collections

    FIND OUT MORE

  •    LETTERS OF CREDIT - TYPES

    Overview

    Not every trade that involves a letter of credit is the same. Over the years, a number of different types have been used to suit particular circumstances that traders face when transacting across borders. This course describes the various forms that letters of credit can take on and outlines the key distinguishing features between the different types.

    Course Duration

    50 mins

    Prerequisite Knowledge

    Letters of Credit – An Introduction

    FIND OUT MORE

  •    UCP 600

    Overview

    Letters of credit, or documentary credits, are designed to reduce the payment risks and costs to buyers and sellers in international trade. For cross-border transactions, it is important that the same standards apply when it comes to the issuance of documentary credits. The International Chamber of Commerce (ICC) has established guidelines in order to mitigate risks arising from discrepancies in the definitions, obligations, and roles of the different parties involved in letters of credit. These guidelines are known as the Uniform Customs and Practice for Documentary Credits (UCP). The current version of these guidelines is UCP 600.

     

    This course provides the background to the development of UCP 600 and describes how documentary credits are structured according to the ICC guidelines. The basic principles and processes are covered, as are the roles of the parties involved in documentary credit transactions.

    Course Duration

    50 mins

    Prerequisite Knowledge

    Letters of Credit – An Introduction

    FIND OUT MORE

  •    EXPORT FINANCE

    Overview

    International trade presents a spectrum of risk, relating to uncertainty over the timing of payments between an exporter and an importer. Furthermore, in an increasingly globalized marketplace exporters must offer competitive sales terms to their customers. This includes payment terms that strike an appropriate balance between the risks of international trade.

     

    This course looks at how exporters can offer flexible payment terms that strike a balance between their interests and those of importers. It builds on knowledge of basic trade finance tools (such as letters of credit) by exploring trade finance techniques that mitigate the risk of nonpayment and also provide funds to solve cash flow problems that can arise for exporters offering more flexible credit terms.

    Course Duration

    75 mins

    Prerequisite Knowledge

    Trade Finance – An Overview

    FIND OUT MORE

  •    STRUCTURED TRADE FINANCE

    Overview

    The nature and complexity of international trade has changed dramatically over the past generation or so. Emerging markets now play the most dynamic role in international trade and are the focus of global supply chain development. As large-scale projects and global supply chains reach deeper into emerging markets, the risk of nonperformance and nonpayment increases.

     

    These prevailing trends in international trade have created the need for financing solutions that are more robust and can mitigate most of the risks associated with complex trade initiatives involving riskier emerging markets. Structured trade finance has emerged to support these initiatives by addressing risks related to the performance or completion of a transaction, rather than more traditional reliance on the financial soundness of the parties to a transaction.

     

    This course describes the concept of structured trade finance in detail and how it differs from traditional trade finance. You will also learn about the different types of structured trade finance solutions and the role of the different lending institutions involved.

    Course Duration

    60 mins

    Prerequisite Knowledge

    Export Finance

    FIND OUT MORE

  •    TRADE FINANCE SECURITY

    Overview

    International trade transactions can give rise to significant risks and complexities, including non-payment risk and cash flow uncertainties. In large-scale projects, these risks are often increased. This makes it necessary to consider instruments that can better secure transactions.

     

    Trade finance security is the collective term for risk mitigation instruments which are particularly suited to large-scale international projects. This course focuses on bank guarantees or bonds, standby letters of credit, and demand guarantees, which are the most common risk mitigation tools in this area. These instruments can help to reduce cash flow uncertainty, non-payment risk, and non-performance risk.

    Course Duration

    60 mins

    Prerequisite Knowledge

    Export Finance

    FIND OUT MORE

  •    INCOTERMS 2010

    Overview

    Selecting the appropriate rules for carriage, customs clearance, and transport insurance is an important factor in international trade. It is crucial that the costs and risks, as well as the tasks assigned to each party, are clearly communicated. Disputes can easily arise if trading partners have a different understanding of who is incurring costs for insurance and carriage or who is arranging which part of the transportation process.

     

    The International Chamber of Commerce (ICC) has published rules, called ‘Incoterms’, which govern the delivery and the transportation of goods. These terms have gained widespread commercial and legal acceptance across the globe. This course provides an overview of the latest version of these rules (Incoterms 2010), including their application and practical use.

    Course Duration

    50 mins

    Prerequisite Knowledge

    Trade Finance – An Introduction

    FIND OUT MORE

Support

Accreditations

General: info@intuition.com

Accounts: ar@intuition.com

http://support.intuition.com

Intuition engages with over 30 accreditation bodies to ensure Know-How can be used for CPE credits. If your organization needs CPE from a body not listed below, contact us and we will endeavour to have them included.

© Copyright 2016 by Intuition. All Rights Reserved.