International Trade Finance
This intensive 2 day course has been tailored for professionals in banking, commerce and trade and industry who need to gain a closer understanding of International Trade Finance.
The course provides a comprehensive foundation of all aspects of International Trade Finance in a global context covering the key concepts, practices and current developments.
This course will be of special interest to banking and commercial professionals, who wish to expand their knowledge base, enhance their expertise and advance their careers into the international trade finance arena.
What Will You Learn
By the end of this course you will have a sound understanding of:
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Main Topics Covered During This Training
Who Should Attend
The course will be of value to professionals in the following areas:
International Trade Finance - 2 Day Course Programme
Introduction to Trade Finance
- Why international trade finance is important
- The building blocks of International Trade
- What is different about international financial management?
- Foreign Exchange risk
- Multinational enterprises and their types
The International Monetary System
- A brief history of international financial systems
- Floating exchange rates
- European Monetary Union
- Exchange rate systems
- Fixed rates
- Managed floats
- Aspects of the ideal system
- The impossible “Trinity”
- Fixed vs floating rates
Introduction to Structured Trade Finance
- Using collateral to manage credit risk
- Why Structured Finance matters
- Principles of collateralized finance
- Secured Vs Structured Finance
Trade Finance Instruments
This section introduces the basics of trade finance. We discuss how traditional techniques of pre- and post-shipment finance relate to financing forms such as forfaiting, countertrade, structured finance, Islamic finance, securitization etc.
- Typical forms of international trade & commodity finance
- International trade finance and trade payments
- Tools of international trade finance (covering both pre-shipment and post-shipment finance)
- Pre-shipment finance Instruments (such as bank overdrafts, term loans, credit lines, foreign currency denominated trade facilities, open local or international Letters of Credit, Leasing or hire/purchase arrangements, Guarantees)
- Post-shipment finance Instruments (such as credit, draft negotiation, discounting, Letters of Credit, Documentary Collections)
- Integrating pre- and post-shipment finance
Case Study: Using trade paper to finance domestic grain trade.
Sources of Trade Finance
- We examine various sources of finance for international trade including:
- Supplier’s credit
- Banks – local & international
- Buyer’s credit
- Export credit agencies
- Multilateral financial institutions
- Investment management companies
- Types of syndication
- The loan syndication process
- Advantages of loan syndication
Operating Examples of Various Trade Finance Instruments
- We examine detailed working examples of a range of Trade Finance Instruments. This includes:
- Short-term pre-shipment financing (L/C-Based)
- Medium-term pre-shipment financing with no bank guarantee (contract-based)
- Construction financing for overseas plants in combination with an export credit agency
- Account receivable-based financing
- Structured commodity financing
International Trade Payment Instruments
- The underlying problems of international trade
- Trade payment mechanisms and risk
- Risks for exporter/seller of the different payment terms
- Payment mechanism choices
We examine each instrument in depth; what it is, how it works, when one should use it, the advantages and disadvantages of each as well as the risks
- Open account
- Real instrument or just a marketing ploy?
- Payment/ cash in advance
- Disadvantages to the exporter/ seller
- Documentary collections
- The role of banks
- Detailed expose of the Documentary Collection process including detailed flow charts
- Documentary collection variations
- Documentary credits:
- Documentary Credit process in detail
- Banks and Documentary credits
- Letter of Credit fraud
- Country credit lines
- The role that documents play
- Problems caused by improper documents
- Master Agreements and their uses
- Shipper’s Indemnities
- Revolving Letter of Credit
- Letter of Credit costs
- Stand-By Letters of Credit as a payment instrument
International Payment Systems
- How international payments are made
- The purpose of a payment system
- International payments characteristics
- The payment process
Payments in US Dollars – CHIPS
We explore the CHIPS dollar payment system it terms of its day-to-day operations and settlements
- A survey of correspondent banking, what it is, its operations and how payments are settled
- CLS and its role in settling international trade payments
- Foreign exchange risk
- How CLS operates
Supply Chain Finance
- Supply Chain Finance - What it is
- Buyer/ supplier payment dynamics
- Payment terms and risk
- Supply Chain finance in international trade
- The challenges of the Letter of Credit
- Trade settlement risk
- Unbalanced trade terms
Supply Chain Finance example
- Funding options
- Funding variations and new developments
- Supply Chain Finance Vs Traditional methods
- Pre-Export financing
- Inventory financing
- Post-Export financing
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