Shipments and Payments under Letters of Credit Contracts

SHIPMENTS AND PAYMENTS UNDER LETTER OF CREDIT CONTRACTS

Significant changes have been introduced under new International Chamber of Commerce (ICC) rules UCP 600, governing Letter of Credit Contracts, plus update to ISBP.

International Banks are also taking a hard line with certain Middle Eastern countries, where Export Edge has resolved major issues for our clients over the last 15 years.

Objectives

• To equip participants with the updated knowledge for Trade Finance operations for their company in an informed and effective manner;
• To equip participants with knowledge of essential banking payment processes that will enable their companies to exploit higher risk markets;
• To reduce complexity and time consumption on complicated banking issues;
• To increase participant’s process efficiency through minimising discrepancies on presentations to banks for payment;
• To utilize new process improvements for operational efficiency.

Upon completion of the course, participants will be able to understand:
• The structure and format of a letter of credit (L/C) and the relationships between L/Cs and the main documents, for example: Commercial and Transport documents, Bills of Exchange (Drafts) and other documentary requirements;
• Banking process and compliance requirements for Documentary Credit and Documentary Collection presentations.

COURSE OUTLINE

Financial Risks inherent to Exporting

The Currency Market and Exchange Rates
• Exchange Risk
• Forward Exchange Contracts

Credit Risk Management and payment analysis
• In advance, Banking or Open account terms
• Export Credit Insurance
• Guarantees

International Payment Criteria
• Clean Collections / Bills of Exchange
• Documentary Collections
• Documentary Letters of Credit
• Types of documentary credits

Letters of Credit (L/C’s)
• Understanding the Process
• Advantages and disadvantages of documentary credits
• Keywords in documentary credits

Negotiating L/C contracts
• Parties to the contract
• Key Management Responsibilities
• Role of Finance and Credit Management

Commercial Operations
• Customer Relationships
• Terms and Conditions under L/C's
• L/C applications to Banks

Documents under L/C’s
• Transport Documents
• Commercial Documents

Documentary Credit Cycle
• Planning and Organising the process
• Application, Issuance, Shipments,
• Presentations and Settlement

ICC - UCP 600 & ISBP 681 rules
• Documentary Credit conditions explained
• Practical application of UCP

Variations in Documentary Credits
• Functioning of the Documentary Credits
• Confirmations to L/C’s
• Transferable Documentary Credits
• Back to Back Documentary Credits
• Revolving Documentary Credits
• Making use of SWIFT Banking formats

In Practice
• Management of functional roles
• Communications internally and with third parties
• Forms of verbal and written communication
• Verification of Documentation
• Effective document generation
• Case studies

Procedures and Systems to improve company efficiency
• Operating Procedures & Progress check lists
• Problem Solving

Managing Time
• Managing Deadlines and Critical Timescales
• Measuring Financial Performance

More course details (PDF)
(contact us for booking)