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:
Foreign exchange & currency principles
The underlying operations and processes in the international trade environment
How trade finance is provided
Trade finance instruments
International payments
Supply Chain Finance
Main topics covered during this training
Structured Trade Finance
Foreign Exchange risk
Structured vs Secured Trade Finance
Using collateral to manage credit risk
Pre and post-shipment Trade Finance Instruments
Trade Payments
Sources of Trade Finance
Loan Syndication
Preparing documentation
International Trade Payment Instruments
International Payment Systems
CHIPS
Correspondent Banking
Supply Chain Finance
Key Topics Covered:
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
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
Governments
Investment management companies
Loan Syndication
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:
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
Documentation
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 in terms of its day-to-day operations and settlements
Correspondent Banking
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
Benefits
Funding options
Funding variations and new developments
Supply Chain Finance Vs Traditional methods
Pre-Export financing
Inventory financing
Post-Export financing
Speakers
Richard's professional experience spans over 25 years. He started his career with Wells Fargo Bank, following by Fundtech and then moving to international advisory and consulting for the private and high-tech sectors providing high-level consulting, business analysis, project management and training to a wide range of banking clientele across the globe.
Over his career Richard was involved in International Trade Finance, Cross Border Payments and Settlements, Operational Risk, AML and Corporate Governance amongst others.