Fundamentals of International Trade Finance

The International Trade Finance training consists of lectures, case studies and discussions. It is presumed that participants attending training have a basic knowledge of international trade.

Introduction

• Trainer/Delegates
• Course Objectives
• Course Topics:
  • Foundations of Trade
  • Methods of International Trade
  • Trade Documents
  • Incoterms
  • Key Trade Products/Methods
  • Trade Documents Examination
  • Trade Based Financial Crimes

Foundations of Trade

• International Trade:
  • Background of International Trade
  • How International Trade Functions – Elements of a Typical Trade Cycle
• Inherent Risks in International Trade:
  • Importer’s Risks
  • Exporter’s Risks
  • Financial Crime Risk
  • Country Risks
  • Bank Risks
• Attractions of Trade Finance to Banks:
  • Revenue
  • Cross Selling Opportunities
  • Low Risk
  • Capital Efficient
  • Easy to Monitor
• Benefits of Trade Finance to Businesses:
  • Securing Trade Transactions
  • Negotiating Better Terms
  • Transparency of Rights and Obligations

Trade Documents

• Importance of Trade Documents
• Principal Trade Documents
  • Bill of Lading
  • Airway Bill
  • Bill of Exchange
  • Pro-forma Invoice
  • Commercial Invoice
  • Insurance Policy
  • Certificate of Origin
  • Packing List
  • Forwarding Agent’s Receipt
  • Rail, Road Consignment Notes/Truck Receipt
  • Multimodal Transport Document

Incoterms

• Definition and Purpose
• Structure of Incoterms
  • Incoterms for all Modes of Transport
  • Incoterms for Sea and Inland Waterway Transport Only

 Key Trade Methods/Products

• Documentary Collections are considered in this section of our international trade finance fundamental course:
  • Principal Parties in Collections
  • Roles and Responsibilities of Banks in Collections
  • Explanations of Salient Terms/Documents
    • Bills of Exchange
      • Parties to a Bill of Exchange
      • Sight
      • Usance
      • Clean Bills of Exchange
      • Acceptance of Bills of Exchange
  • Negotiability of Bills of Exchange
  • Discounting Bills of Exchange
  • Avalization
  • Protest of Bill of Exchange
  • Risks in Documentary Collections to Importers and Exporters
  • Trade Finance training includes two case studies:
    • Based on the contractual terms between the buyer and seller, Gamma Bank advises the seller to consider using Documentary Collections as the payment method
    • Roles and responsibilities of ABC Bank (Remitting Bank) and XYZ Bank (Collecting Bank) in an export transaction using Documentary Collections under URC 522
• Documentary Credits/Letters of Credit
  • Parties to a Letter of Credit and their Responsibilities
  • Advantages and Disadvantages of Letters of Credit to Exporters and Importers
  • Contracts in a Letter of Credit
  • Workability of a Letter of Credit
  • Cycle of Letters of Credit – Sight and Usance
  • Explanation of Salient Terms/Documents
    • Sight
    • Usance
    • DC Advised
    • DC Confirmations
    • DC Availability – by Negotiation, Payment and Acceptance is covered in this international trade and finance course
  • Types of Letters of Credit
    • Revolving Letter of Credit
    • Red Clause Letter of Credit
    • Transferable Letter of Credit
      • Mechanism of Transferable LC
    • Back-to-Back Letter of Credit
      • Mechanism of Back-to-Back LC
    • Stand-by Letter of Credit
    • Third Port Letter of Credit
    • Local Letter of Credit
  • Case Study
    • Based on the contractual terms between the buyer and seller, PQR Bank advises the buyer to consider using a Letter of Credit as the payment method
    • ABC Bank offers Stand-By LC as an alternative for a recurring sale of goods every month over a one-year period
• Guarantees:
  •  Types
    • Tender/Bid Bond
    • Performance Bond
    • Advance Payment Guarantee
    • Retention Bond
    • Counter Guarantees
    • Warranties
  • Trade finance training covers the format and wording of Guarantees
    • Demand for Payment – an essential feature
  • Renewal of Guarantee and/or Demand for Payment
  • Expiry and Return of Guarantees

Trade Documents Examination

• Buyer’s Responsibilities
• Seller’s Responsibilities
• Bank’s Responsibilities
• Adherence to UCP 600:
  • Presentation of Documents
    • Examination of Documents regarding Article 14
  • International Standard Banking Practices (ISBP) General Principles
  • Examination Processes/Rules for:
    • Dates
    • Drafts/Bills of Exchange
    • Transport Documents – Bill of Lading/Airway Bill
    • Invoices
    • Insurance
    • Certificate of Origin
    • Packing List
• Non-Compliant Documents:
  • Letters of Credit
  • Bills of Exchange
  • Invoice
  • Bill of Lading
• International trade finance training considers a further three Case Studies:
  • XYZ Bank as the issuing bank considering refusal of payment under a Letter of Credit where the goods have been lost at sea
  • ABC Bank as the issuing bank considering the refusal of payment under a Letter of Credit on the grounds that the terms of the LC amendment were not complied with by the seller
  • Use and interpretation of UCP 600 Article 14 in a situation where the Issuing Bank and Negotiating Bank contest the compliance of Article 14 terms

Trade Based Financial Crimes

• Financial Crime Risk in Trade Finance
• Importance of Trade Based Know Your Customer (KYC)
• Trade-Based Financial Crime:
  • Money Laundering 
  • Terrorist Financing 
  • Sanctions
  • Tax Evasion
• Trade finance training considers other players in Trade Based Financial Crime:
  • Hawala Operators
  • Money Exchange Service Providers
  • Intermediaries/Professionals
• Trade Based ML/TF red flags
• Commercial Fraud and Collusion
• Case Study
• The case of Company Z undertaking over-invoicing as a means of money laundering and fraud provides an opportunity to identify typical red flags in an international trade transaction

At Redcliffe Training our International Trade Finance course is delivered by a highly experienced ex-banker with 30-plus years dedicated to the financial service industry. His impressive career includes 22 years with HSBC Bank Middle East where he worked from 1991 until 2013. Our specialist brings over 10 years of extensive experience in delivering training programs.

He began his professional career as a credit analyst at HSBC, subsequently growing into several senior Relationship Manager roles. Working in a global bank provided him a platform to establish all-round banking knowledge and skills. He developed a particular niche in all areas of Commercial Banking, with a high degree of specialisation in Corporate Lending, Credit Risk Analysis, Trade Finance, Relationship Management and Corporate Banking Products. Highlighting the knowledge he brings to trade finance training sessions. As a senior RM, he managed a portfolio of clients in various industries and of various sizes, including large corporates and sovereign entities, with a combined credit limit of USD 500M.

In 2008, our subject expert became a full-time trainer within HSBC, a role he continued until 2012 before pursuing independent financial consultancy and training delivery. Possessing excellent technical knowledge of an extensive range of commercial banking businesses and products; which combined with sound commercial orientation, communication, and people skills, ensures delivery of effective results-oriented learning.

Our trainer has a refreshing method of delivery. Keeping audiences interested and engaged, he delivers the message effectively. Alongside Redcliffe’s international trade finance course, he has delivered technical, product and behavioural sessions to a wide audience based on subjects such as Financial Analysis, Credit Risk Management, Managing Problem Loans, Writing Credit Proposals, Trade Finance, Anti-Money Laundering/Compliance, Project Finance, Islamic Finance, Sales and Negotiation Skills and Relationship Management.

Delivering courses in the wider GCC, MENA, Europe, Latin America and Asia Pacific regions has given our trade finance training expert an exposure to the various cultural and professional approaches to work. He has also completed trainer accreditation programmes in Hong Kong and the UAE.

Upon completion of international trade finance training,  participants will be able to:

• Explain the situations where Trade Finance should be on the agenda of corporates and banks
• Identify opportunities to market Trade Finance solutions
• Identify potential risks to banks and businesses
• Explain the features, benefits, risks and consequences of using key Trade Finance products
• Understand the key financial crime risks emanating from international trade

• International trade finance fundamental training is delivered by an expert with over 30 years of relevant industry experience. This means our course is led by a specialist who has put into practice all the knowledge he has accrued over three decades
• Course topics can be amended to suit the requirements of your team
• Training is delivered onsite, at an arranged time
• Sessions combine learning methods and include several relevant case studies for analysis and discussion
• Content has been designed and developed specifically for financial, legal and corporate professionals requiring a deeper understanding through trade finance training

Fundamentals of International Trade Finance training is a must-know for Credit and Risk Officers, Corporate Relationship Bankers, Transaction Banking Sales and Product Specialists. Professionals working in trade functions of banks and corporates will highly benefit from this course.

Sessions may also apply to finance, accountancy, legal and any advisers requiring a more comprehensive and deeper understanding of the subject.

Redcliffe Training’s International Trade and Finance course has been curated to provide attendees with an extensive overview of international trade finance through a contemporary lens.

International Trade Finance training is an important consideration for companies, irrespective of size. From small to medium and larger businesses that import and export, this course holds significant benefits.

Courtesy of this international trade finance course, participants can expect to gain practical insights covering a mixture of broad and nuanced topics.

Delivered over a single day, participants investigate trade finance to determine where on agendas this should appear. We will identify opportunities and solutions including any potential risks whilst ensuring participants solidify their knowledge through interactive case studies.