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PUBLIC COURSES

• Fundamentals of International Trade Finance• The Advanced Trade Finance Course• Structured Trade & Commodity Finance• Letters of Credit• Trade Based Money Laundering (TBML) and Sanctions

Compliance• International Trade Finance Masterclass

IN-HOUSE COURSES

• Trade Finance Sales• Examination Of Documents Under Documentary Credits• Risk in Trade Finance & Trade Finance Products• Trade Finance for Lawyers• Invoice Discounting (Domestic & International) - A Two

Day Workshop Style Course• Commodities Markets• Agribusiness

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Corporate Membership Scheme

Our Corporate Membership Schemes are not valid on any courses held on an in-house basis and are in line with our standard Terms & Conditions

If you would like to enquire about one of our Corporate Membership Schemes then please call or email us for more information.

Email: [email protected] Tel: +44 (0) 20 7387 4484

Our Corporate Membership Scheme gives clients the benefit of discounted course places with absolutely no

restrictions.

Clients pay an annual subscription fee of £595 + VAT to receive 20% discount on all public course and conference

bookings irrespective of the numbers booked.

You Corporate Membership Scheme can be used once payment is received and will be valid for one year.

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Fundamentals of International Trade FinanceDate: 13 Nov 2018

Location: London Standard Price: £625 + VATMembership: £500 + VAT

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Course Objectives

This 1-day course which will assist participants to identify customer needs and recommend appropriate product solutions, as well as assess various risks to both bank and customer in international trade transactions.

Through the use of trainer led sessions and the use of case studies they will be able to explain and identify ways of mitigating the underlying risks associated with trade finance transactions and carry out the processes involved in documentary collections, documentary letters of credit and guarantees.

The purpose and application of the various International Chamber of Commerce (ICC) rules and practices used in international trade will be covered.

Participants will have an introduction to core trade finance products.

The course is highly interactive and centres around the use of a variety of case studies, predominantly based on actual files and ICC opinions.

This is a foundation level course which can be supplemented by our Advanced Trade Finance, Letters of Credit and Trade Based Money Laundering & Sanctions courses.

The trainer is a leading trade finance practitioner and trainer with almost 40 years banking experience. Prior to taking early retirement, he was responsible for the risk management of the UK trade book for a top international bank, with whom he had spent his whole banking career as a Relationship Manager, Credit Risk Approver, Trade Finance Manager and latterly their Trade Portfolio Risk Manager.

He has provided training to banks globally on trade and receivables finance, risk mitigation, AML and sanctions compliance, is ACIB qualified and has completed the ICA Certificate in Trade Based Financial Crime Compliance issued by the University of Manchester Business School.

Background of the Trainer

Introductions ■ Trainer & participants ■ What do you know? ■ Aims and objectives. ■ Course context.

What is Trade Finance? ■ Benefits of trade finance to businesses

and banks ■ Introduction to the trade cycle ■ Incoterms 2010

• Summary of terms• The advantages/disadvantages to Im-

porter/Exporter in the use of Incoterms 2010

• Principal methods of settlement ■ General Risk Considerations

• Trade finance products vs open account• Financial Crime Compliance - AML, CFT

and Sanctions• Know Your Customer (KYC) and Cus-

tomer Due Diligence (CDD)• Correspondent Bank risk• Counterparty risk• Credit risk

Course Content


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Fundamentals of International Trade FinanceContinued

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Course Content

Case Study: Short exercise to check understanding of Incoterms application.

Key characteristics of Commercial Documents used in international trade ■ Invoices (commercial, tax, customs, con-

sular, pro-forma invoice) ■ Marine/Ocean Bills of Lading

• Title, transfer • Control of goods (transferable B/L v.

straight consigneed)• Delivery considerations

■ Other forms of transport document• Multimodal Transport Document• Air Transport Document • Road, Rail or Inland Waterway Trans-

port Documents• Non-negotiable bills of lading

■ Insurance Policy/Certificate ■ Other certificates (Certificate of Origin,

Inspection Certificate, Phytosanitary, etc) ■ Bills of exchange

Exercise - using examples of commercial documents to help participants to understand their technical content, the significance and importance of particular documents.

Core Trade Products ■ Import / Export Documentary Collections ■ Letters of Credit ■ Guarantees

Import / Export Documentary Collections ■ Principal parties (buyer, seller, presenting

bank, remitting / collecting bank) ■ Benefits to importers and exporters of

Documentary Collections ■ Relationship between principal and banks ■ Role of banks (incl. correspondent banks /

agency arrangements) ■ Legal and practical issues re the duties of

the banks involved in handling collections ■ Conditions for release of documents ■ Areas of risk:

• Usance collections• Partial payments • Avalisation (so rare would exclude) • Release of goods on trust

■ Procedures for Protest of Bill of Exchange (B/E) and underlying risks

■ Complexities of the ICC Uniform Rules for Collection (URC 522)

Case Studies

a) to consider the needs of an exporter or importer and suitability of using Documentary Collection in a cross-border transaction and / orb) to check understanding of the collections procedure and the practical application of the URC 522

Documentary Letters of Credit ■ Principal parties (buyer, seller, issuing

bank, advising bank, confirming bank) ■ Benefits to importers and exporters of

Documentary Letters of Credit ■ Relationship between buyer, seller and

banks ■ Advantages / disadvantages of letters of

credit ■ Risk factors re issuing letters of credit ■ The autonomy of letter of credit operations

(Independence Principle) ■ Importance of the application form (legal

issues) ■ Instructions to issue/amend credits ■ Workability of the credit ■ Jurisdiction

Introduction to the International Chamber of Commerce UCP 600 Rules: ■ Structure and obligations under letter of

credit; ■ Availability of credits, expiry date and

place for presentation ■ Availability by payment, deferred payment,

acceptance, deferred payment standard for examination of documents; dealing with discrepant documents, waiver and notice of refusal;

Examination of documents ■ Key elements of the main articles of UCP

600 ■ The standard for examination of docu-

ments: “no conflict” rule – article 14 ■ Processing non-compliant documents as

Nominated/Confirming Bank ■ Processing non-compliant documents as

Issuing Bank ■ Risks arising from non-adherence to UCP

600 ■ Legal cases and ICC Banking Commission

opinions ■ DOCDEX – dispute settlement mechanism

of ICC for trade finance ■ Analysing irregularities in documents

International Standard Banking Practice ISBP 745 (2013 Rev)





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Course Overview


Fundamentals of International Trade FinanceContinued

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Course Content

■ What constitutes an “alteration” or “ad-dition” to a document, when and how should these be authenticated?

■ How should documents be signed, if this is not explicitly stated in the credit?

■ How should one handle typing errors on documents regarding the name and ad-dress, different addresses of same compa-ny, etc.?

Advising, confirming, reimbursing credits ■ Obligations and Risks associated with the

Advising Bank, Nominated Bank, Confirm-ing Bank

■ The use of the Bill of Exchange in Letters of Credit

■ Application of the Uniform Rules for Bank-to-Bank Reimbursement ICC 725

■ Assignment of procceds

Case Studies a) to consider the needs of an exporter or importer and suitability of using a Letter of Credit in a cross-border transaction and / or

b) to check understanding of the collections procedure and the practical application of the UCP600

Other forms of Letter or CreditA review of the purpose, procedure and risks associated with: ■ Irrevocable / revocable ■ Usance credits ■ Transferable Credits ■ Back-to-Back Credits ■ Red and Green Clause Credits ■ Revolving / Reinstatement Credits ■ Standby Credits ■ Synthetic Credits

Guarantees ■ Types of guarantees:

• Tender/bid bonds • Advance payment guarantees • Performance bonds • Retention money guarantees • Warranty Guarantees (Maintenance

guarantees)• Bail bonds • Payment guarantees • Indemnities/counter guarantees

■ Risk Assessment (including risk weighting) ■ Wording of Guarantees ■ Demand under guarantees: issues

■ Extend or Pay demands ■ Expiry and Cancellation Uniform Rules for

Demand Guarantees 758: main principles, URDG 758 guarantee sample wording, sample clauses

Case Study to review guarantees which caused a loss to the bank. Discuss the practical application of URDG 758 and potential for use in local banking practice and legal jurisdictions.

Financial Crime Compliance ■ Consituent parts (money laundering, ter-

rorist financing, sanctions breaches) ■ Current examples ■ An introduction to the nature of compli-

ance risk in cross border transactions ■ Why are international trade transactions

increasingly a target for abuse? ■ The consequences of non-compliance (for

banks, corporates and individuals) ■ Risk assessment from FCC perspective

Case Study: Participants work in groups to consider the needs of various SMEs and to identify the appropriate product solution. ■ ■ Summary of day’s learning ■ Opportunity to refresh clarify key points,

clarify ■ Review main learning points.





Course Content

The Advanced Trade Finance CourseDate: 14-15 Nov 2018

Location: London Standard Price: £1,050+VATMembership: £840 + VAT

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Course Overview

Day One:The Current Market Place ■ Recent evolution and current developments ■ The challenge of emerging markets ■ The challenge of China ■ Brexit ■ President Trump ■ New products ■ The traditional three bands of clients: Global

and Large Corporate, MME’s, the rest! ■ Understanding trade finance at a fundamen-

tal level.’ ■ Typical users of Trade Finance products and

servicesFinancial Crime Compliance & Sanctions ■ Understanding the risk based approach ■ Impact on Trade Finance ■ TI, CPI and its impact ■ FATF ■ DDD and the need to obtain a clear line of

sight across the value chain ■ Money laundering methodologies ■ Ghost payments and variations ■ Under/over invoicing and variations ■ Documentary fraud ■ PEPS ■ Sanctions

Trade Finance has been “re-discovered” yet remains a little mysterious. It is a product that has always generated strong revenues- often non funds based – and traditionally has exceptionally low credit losses (on a portfolio basis). Most global banks are able to apply very low probability of default ratios and usually lose as much to fraud as to actual credit losses.

The major general challenge to trade finance in recent times has been the impact of Financial Crime Compliance and Sanctions. Whilst credit losses and hence credit risk is low, FCC risk is very high because of the increasing tendency for global trade to pass through more than one country, use different modes of transport, use different currencies and transit through some regions where money laundering controls are not as strong as in others. This makes the audit trail very challenging. This is not a course about FCC but as trade finance is reckoned to be the main driver for money laundering, it needs to be understood.

To compound matters, many global banks have reduced their correspondent banking networks by up to two thirds – often based on the Transparency International CPI. This means it is becoming increasingly likely that more than two banks are involved in a transaction, causing delays in processing and frustration for the client. Sight LC’s can take 10-15 working days to be processed when there are two to three advising banks. Of course this has created opportunities for confirmation activities – provided FCC clearance is obtained.

Another challenge of trade finance is the tendency for banks to re-invent the wheel by using impressive sounding and not always easy to define marketing names to describe “new” products which are not actually new. “Buyer centric supply chain solution” actually is the sexier name for reverse factoring.

This practical two day advanced level course will concentrate on what is happening in the market right now leaving delegates with a clear and working knowledge of how trade finance is undertaken in the real world, what actually happens and what are the implications for all parties concerned.

A good working knowledge and familiarity with International Trade finance is required to derive the maximum benefit from this course.

■ Risk mitigation, management and transferCase Study/Exercise

Traditional Risks – The Critical Issues ■ Understanding, identifying and managing

risk ■ Credit risk, Market risk & Operational risk ■ Sovereign, Political / Country risk ■ Institutional risk / Bank risk ■ Corporate and other critical risks ■ Importer and Exporter’s risk ■ Other risks in the transaction and how to

mitigate them (transport risk, warehousing, force majeure, etc.)

■ Risk mitigation, management and transfer

Case Study/Exercise

Review of Key Products ■ How does the customer analyse his risk? ■ Which products does he use and why? ■ Payment in Advance ■ Open Account ■ Collections – Outward & Inward / Clean &

Documentary ■ Letters of Credit (covered in more detail

below)

http://redcliffetraining.com/training/banking-training-courses/advanced-trade-finance-training-course/


The Advanced Trade Finance CourseContinued

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Course Content

■ Risks and opportunities ■ Control possibilities

Case Study/Exercise Supply Chain Management & Finance ■ The origins of SCM and what does it mean in

practice ■ Understanding the issues in SCM – “the tug

of war” between supplier & buyer ■ Bringing about a “balance” between parties

for effective processing ■ Understanding about movement of ‘informa-

tion’ ,’goods’ and ‘cash’ ■ Supply Chain Finance Main SCF models:

accounts payable - centric, accounts receiv-able, BPO

■ Review the risk aspects of SCF Case Study/Exercise

Letters of Credit (L/Cs) ■ Traditional L/C’s ■ The four contract concept ■ Confirmations ■ Red Clause ■ Green clause ■ Revolving L/Cs ■ Evergreen ■ Transferable L/Cs ■ Back to Back L/C structures

Case Study/Exercise

Standby Letters of Credit ■ History and origin ■ The dominant trade finance product ■ Uses ■ Risk management ■ Issue and assessment ■ Pricing ■ Understanding the applicability of ISP98 and

UCP 600 for standbys ■ Fraud and unfair calling

Case Study/Exercise

Export Finance issues ■ Looking at the big picture ■ Understanding the purpose of borrowing ■ Country risk issues ■ The reality of title and control ■ Negotiation under letters of credit ■ Discounting of deferred payment L/C, ac-

ceptance credits (with or without recourse) Case Study/Exercise

Controlling Credit Exposure – Formulating a Limit ■ Understanding and explaining the trade

cycle

■ The use of time lines ■ Assessing and appreciating funding gaps

Case Study/Exercise

Day Two:

Structuring Finance for the Trader ■ Analysing the trade flows ■ Assessing facility size and structure ■ Specific lending with identifiable maturity

dates ■ Appreciating and controlling sources of repay-

mentCase Study/Exercise

Effective Use of Collections for Short-Term Finance ■ Using collections as financing opportunities ■ Identifying and mitigating risks ■ Maintaining control

Supporting the Trader ■ Using the goods as collateral ■ Assessing the value of goods ■ The value of pledges and trust receipts ■ The need for structured lending

Case Study/Exercise

Warehousing of Goods ■ Warehouse location ■ Management assessment ■ Legal frameworks ■ Obtaining and retaining title and control ■ Risks and responsibilities of Collateral Manag-

ers ■ Cost versus control

Case Study/Exercise

International Demand and Contract Guarantees / Bonds ■ Scope and Application – an introduction

(suretyship v. demand guarantee) ■ Indemnities versus guarantees ■ Different types - Bid, Performance, Advance

payment, Warranty and Retention bonds ■ Rules governing guarantees and bonds ■ Legal jurisdiction and expiry date issues ■ Value of using URDG 758 – ICC Rules for de-

mand guarantees ■ Impact of non-bank competitors – COFACE,

Euler Hermes Case Study/Exercise

Receivables Financing ■ Mechanics of Factoring and Invoice Discount-

ing ■ Forfaiting – an important adjunct to the TF

mechanism ■ Role of Credit Insurance ■ Mechanics of Securitisation



The Advanced Trade Finance CourseContinued

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Course Content

■ FCC risksCase Study/Exercise

The Commodity Sector and its Players ■ History and origins of the commodity industry ■ Understanding the nature of ’commodities’ ■ Analysing the players – growers / producers;

traders and end-users ■ Financing of commodities ■ Looking beyond the balance sheet ■ Available documentation – taking and retain-

ing title ■ Commodity futures, options and derivatives ■ Hedging – a critical process in commodity

finance ■ Role and function of the exchanges ■ Main risks in the commodity trade (market,

fraudulent practices, legal issues, recent legal cases)

Countertrade ■ Overview – when to use ■ Pitfalls and complications ■ Possible structures and Time management

Syndications ■ When to syndicate ■ Lead or participant role ■ The completion from capital markets – high

yield bonds ■ Selling down exposure ■ Impact of quasi-governmental agencies ■ Risk/reward analysis

Case Study/Exercise

Course Conclusion and Review / Feedback


http://redcliffetraining.co.uk/training/banking-training-courses/trade-finance-training-course/


Structured Trade and Commodity FinanceDate: 24-25 Sep 2018

Location: London Standard Price: £1,050+ VAT Membership Price: £840 + VAT

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Course Objectives

Participants will:

■ Be introduced to what is meant by structured trade and commodity finance ■ Learn about the markets, the softs, oils & gas and LME ■ Explore the grain, mean and tropical markets alongside new participants in those markets ■ Get to grips with emerging markets and the risks alongside how strucutred approaches assist and

what a “good” collateral is ■ Expand knowledge on pre-finance and the risks relating to grower/producer finance ■ Gain an understaind of the green clause and red clause credits ■ Master the key documentation as a risk mitigant ■ Learn about financing commodities, structures and risk management ■ Analyse warehousing and asset backed structures, warehouse receipts and WRF structues ■ Explore the collateral management and different types of insurance ■ Review mining, oil and gas finance alongside liquified natural gas.

Commodity markets have seen unprecedented price fluctuations in recent times making the sector much more challenging. The course will attempt to deal with these challenges but ultimately the whole sector remains inherently more risky than it was.Trade Finance remains the engine at the heart of global economic growth with China still probably the most important participant. Commodity Finance sits at the heart of this trade dominated by oil and gas which according to some estimates, accounts for as much as 70% of all commodity trade.

The impact of both Brexit and The Trump presidency are very hard to predict and both the short and medium term outlooks remain uncertain which is not helpful. Most markets are “holding their breath”. Similarly we have just seen the latest “agreement” by OPEC and others (primarily driven by Saudi Arabia) to restrict production and hopefully boost oil prices. Early signs show it is working but will it last?

Structured Trade and Commodity finance can mean many things and many banks will have their own particular definition. Generally speaking it is an activity dedicated to the financing of high-value supply chains. Every loan is tailor-made to client, transaction and region. They tend to be more long-term – sometimes up to five years.

Structured trade finance usually refers to the financing of cross-border commodity flows (and as such is most commonly known as structured commodity finance).

Structured commodity finance encompasses several different methods of finance for producers and traders of goods and commodities, including:Trading in commodities often involves dynamic and fast-moving commodity markets, often with counterparties in emerging market territories. Risk mitigation and the ability to swiftly devise structures to make available financing of transactions are keys to success.

Whilst ongoing innovations and technological developments make the market more transparent this can be a high risk area for the uninitiated or unprepared. As a commodity banker, trader or even a producer, a flexible and creative approach, balanced by an appropriate degree of caution, will minimise risks.

This course will highlight the key concepts involved in commodity trading with elements drawn from real situations. It will also cover liquidity issues and lightly traded commodities.

Your FacilitatorHas over 40 years in the banking and trade finance sectors. His career was sent initially with Lloyds Bank plc and then as a main board director of a specialist London based merchant bank.

He has delivered numerous successful public courses on this topic as well as in house trade and commodity financing programmes at an advanced level for Bank of China, HSBC, and Royal Bank of Scotland Group, Lloyds TSB, Commerz Bank, Garanti Bank as well as all the leading South African and Nigerian Banks

He is an approved external master trainer for the world’s largest trade finance bank and has trained extensively in the UK, USA, Europe, Scandinavia, Africa, Asia and the Middle East.

Course Overview

http://redcliffetraining.com/training/banking-training-courses/structured-trade-and-commodity-finance/


Structured Trade & Commodity FinanceContinued

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Course Content

Introduction ■ What do we mean by structured trade ■ What is commodity finance ■ Categories of Commodities ■ Commodity Pricing – Volatility ■ The exchanges and their influence ■ The rise of techniques to manage risk ■ Participants ■ Current Trends

The Markets ■ The softs. ■ Oil & Gas ■ LME ■ The grain markets - the meat markets and

the tropical markets in coffee , cocoa, sugar, etc

■ Biofuels.- Ethanol ■ New participants in the market ■ Over / under supply ■ Traditional hedging techniques ■ The availability of data and access to the

markets ■ The concept of price insurance ■ Electronic platforms. ■ The rise of the indexes ■ Exchange Traded Funds

Emerging Markets ■ The risks ■ Political & Economic Risks and mitigants ■ Performance and operational risk and miti-

gants ■ Credit & Bank risks and mitigants ■ Price Risk ■ IForged, fraudulent or illegal contracts ■ Documents of title ■ Markets & Players ■ Risk analysis of a commodity transaction ■ How structured approaches assist ■ What is “good” collateral

Pre-Finance ■ The risks relating to grower/producer fi-

nance ■ Green Clause Credits ■ Red Clause Credits ■ Ownership issues ■ Licenses, export quotas, foreign currency

controls ■ Problems with non delivery ■ SBLC’s ■ Prefinance versus prepayment ■ Limited Recourse v unlimited recourse

Key Documentation as a Risk Mitigant ■ Transport documents ■ MMTD & BoL’s ■ Documents representing goods ■ Title, negotiability, endorsement ■ Incoterms

■ Charter-party contracts and contracts of af-freightment

■ Voyage time and trip transfers ■ Shipper/charterer and vessel owner obliga-

tions ■ Loading & discharge of cargo

Financing Commodities ■ Commodity contracts ■ Risk analysis of commodity flows ■ Risk analysis of key parties ■ The importance of document control – “follow

the doggy!” ■ Logistics & the value chain

Structures ■ Pre-export finance ■ L/C, SBLC and other structures ■ Tolling ■ Inventory finance & CMA’s ■ Asset backed finance ■ Countertrade structures

Risk Management ■ Risk mitigation ■ Exchange traded commodities ■ Links between cash & futures markets ■ Delivery to and from terminal markets ■ Cash flow acceleration ■ Off balance sheet considerations ■ Countertrade structures ■ Problems with MMTD transactions

Warehousing ■ Asset backed structures ■ The business case for warehousing ■ Warehouse receipts ■ WRF structures ■ Raising finance against warehouse backed

securities ■ Problems with pledges over inventory, physi-

cal dispossession ■ Legal requirements ■ Fraud, misrepresentation and similar issues ■ WH receipts – a document of title, or just a

receipt ■ Risk mitigation

Collateral Management ■ Liability of collateral managers ■ Collateral Management Agreement (CMA) ■ Negotiating CMA documents ■ Reviewing components of the CMA ■ Tolling finance ■ Performance and country risks ■ Non-delivery issues/problems ■ Financiers priorities ■ Insurance solutions

Insurance ■ Marine insurance



Structured Trade & Commodity FinanceContinued

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Course Content

■ ICC/A/B/C contingency cover ■ Security – assignment v loss payee ■ Political and country risk ■ Contract frustration ■ Asset confiscation ■ Credit insurance ■ Legal problems ■ Breach of warranty ■ Failure to act appropriately to mitigate in-

sured losses (acting as if uninsured)

Price Risks ■ Chinese influence ■ Price risk management ■ Price discovery exchange ■ Traded versus OTC ■ Cash and futures markets ■ Contracts to hedge ■ Bank v customer requirements/benefits

Mining Finance ■ Concept of the business ■ The cost to bring to market semi-finished

material ■ Inhospitable locations ■ Financing new mines ■ The lead/lag time for production ■ Technical developments and reworking older

mines ■ The issue of current and future price projec-

tions ■ Trading issues, hedging ■ Borrowing and Lending

Oil & Gas Finance ■ The energy complexes ■ Crude oil market ■ Buying oil on Wall Street ■ The role of the .majors ■ The supply demand equation ■ State intervention ■ The exploration and extraction of oil ■ Trading in crude oil. ■ Heating oil and gasoline ■ Gas market

LNG – Liquified Natural Gas ■ The energy complexes ■ The growth of the LNG debt market ■ LNG liquefaction finance: ■ LNG regas finance ■ LNG ship finance ■ Recent trends:

• Financing of integrated LNG chains• Changing downstream markets and trading

patterns• Increasing flexibility in LNG sales and fi-

nancing contracts



Letters of CreditDate: 11 Jun 2018, 15 Oct 2018

Location: London Standard Price: £625 +VAT Membership Price: £500 +VAT

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Course Overview

Despite increasing movement to unstructured open account trading, there is still a place for Trade Finance, and, in particular, Letters of Credit which are widely used by small and medium sized enterprises, in the import and export of goods and services. This 1-day course will provide a firm foundation to participants new to the workings of Letters of Credit, as well as reinforcing and consolidating the knowledge of those participants who already have some general Trade Finance experience. Through a better understanding of the nature and mechanics of Letters of Credit, participants will be better placed to identify customer needs and recommend appropriate solutions. Included in the course are practical sections covering documentation, the regulatory environment and the implications of Financial Crime Compliance. These include the various International Chamber of Commerce (ICC) rules and practices and a high-level oversight into anti-money laundering (AML), Countering the Financing of Terrorism (CFT) and Sanctions considerations. The course will use case studies and interactive class discussions, encourage delegates to question and test their knowledge at each stage of the course.

Course Content


What is Trade Finance? ■ Benefits of trade finance to businesses and

banks ■ Introduction to the trade cycle ■ Incoterms 2010

• Summary of terms • The advantages/disadvantages to Import-

er/Exporter in the use of Incoterms 2010 • Principal methods of settlement

■ General Risk Considerations• Trade finance products vs open account • Financial Crime Compliance - AML, CFT

and Sanctions • Know Your Customer (KYC) and Customer

Due Diligence (CDD) • Correspondent Bank risk • Counterparty risk • Sanctions clausing • Operational risk • Credit risk

Case Study: Short exercise to check understanding of Incoterms application. Core Trade Products

■ Import / export Documentary Collections ■ Letters of Credit ■ Guarantees

Documentary Letters of Credit ■ Principal parties (buyer, seller, issuing bank,

advising bank, confirming bank) ■ Benefits to importers and exporters of Docu-

mentary Letters of Credit ■ Relationship between buyer, seller and banks ■ Advantages / disadvantages of letter of credit ■ Risk factors re issuing letters of credit ■ The autonomy of letter of credit operations

(Independence Principle) ■ Importance of the application form (legal

issues) ■ Instructions to issue/amend credits ■ Workability of the credit ■ Jurisdiction

Introduction to the International Chamber of Commerce UCP 600 Rules: ■ Structure and obligations under letter of cred-

it; ■ Availability of credits, expiry date and place

for presentation ■ Availability by payment, deferred payment,

acceptance, deferred payment standard for examination of documents; dealing with discrepant documents, waiver and notice of refusal;

■ Key legal decisions (Santander v Paribas, CIC v CMB)

Key characteristics of Commercial Documents used in international trade ■ Invoices (commercial, tax, customs, consular,

pro-forma invoice)

http://redcliffetraining.com/training/banking-training-courses/letters-of-credit-course/


Letters of CreditContinued

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■ Marine/Ocean Bills of Lading • Title, transfer • Control of goods (transferable B/L v.

straight consigneed) • Delivery considerations

■ Other forms of transport document • Multimodal transport document • Air transport document • Road, Rail or Inland Waterway transport

documents • Non-negotiable / draft bill of lading

■ Insurance Policy/Certificate ■ Other certificates (Certificate of Origin,

Inspection Certificate, Phytosanitary, etc) ■ Bills of Exchange

Exercise - using examples of commercial documents to help participants to understand their technical content, the significance and importance of documents.

Examination of documents ■ Key elements of the main articles of UCP

600 ■ The standard for examination of docu-

ments: “no conflict” rule – article 14 Processing non-compliant documents as Nominated/Confirming Bank

■ Processing non-compliant documents as Issuing Bank

■ Risks arising from non-adherence to UCP 600

■ Legal cases and ICC Banking Commission opinions

■ DOCDEX – dispute settlement mechanism of ICC for trade finance

■ Analysing irregularities in documents International Standard Banking Practice ISBP 745 (2013 Rev) ■ What constitutes an “alteration” or “addi-

tion” to a document, when and how should these be authenticated?


■ How should one handle typing errors on documents regarding the name and ad-dress, different addresses of same compa-ny, etc.?

■ Detailed practices when working with different trade documentation (e.g. doc-uments not covered by UCP, packing lists, weight lists, beneficiary certificate, non-negotiable sea waybill, analysis in-spection, health, phytosanitary, quantity & quality certificates)


Advising Bank, Nominated Bank, Confirming Bank



■ Assignment of proceeds

Case Studies a) to consider the needs of an exporter or importer and suitability of using a Letter of Credit in a cross-border transaction and / or b) to check understanding of the collections procedure and the practical application of the UCP600

Other forms of Letter or Credit A review of the purpose, procedure and risks associated with: ■ Usance credits ■ Transferable Credits ■ Back-to-Back Credits ■ Red and Green Clause Credits ■ Revolving Credits ■ Standby Credits (vs Guarantess) ■ Synthetic Credits

Other considerations ■ Acceptance ■ Discounting ■ Aval ■ Factoring ■ Forfaiting

Financial Crime Compliance ■ Consituent parts (money laundering, terrorist

financing, sanctions breaches) ■ Current examples ■ An introduction to the nature of compliance

risk in cross border transactions ■ Why are international trade transactions in-

creasingly a target for abuse? ■ The consequences of non-compliance (for


Case Study: Participants work in groups to consider the needs of a business and to identify the appropriate product solution. ■ Summary of day’s learning ■ Opportunity to refresh clarify key points, clar-

ify ■ Review main learning points.

http://redcliffetraining.com/training/banking-training-courses/letters-of-credit-course/


Course Content

Trade Based Money Laundering (TBML) and Sanctions Compli-ance

Date: 24-25 May 2018 , 09-10 Oct 2018

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Course Overview

Location: London Standard Price: £1,350 +VAT Membership Price: £1,080 +VAT

Whilst trade and commodity finance is low in credit risk it exposes banks to high compliance risks. Banks who have failed to implement adequate Financial Crime Compliance programmes and training have incurred fines, reputational damage and faced the potential loss or suspension of their ability to operate in certain currency markets or jurisdictions. This 2-day course for personnel who are involved in Trade Finance, including bank auditors, compliance officers, operations managers and relationship directors, provides an explanation of the operation of the methods of payment and financing used in international trade and commodity transactions and the nature of associated compliance risks. The course covers all aspects of Financial Crime Compliance (including the regulatory framework) with particular regard to Trade & Commodity Finance (principles and products), Correspondent Banking, International Payments, Global Cash Management, their associated compliance risks and the suspicious money laundering / sanctions violation activity red flag indicators of each. Through attending this course participants will be able to identify compliance risk features in core product areas and key aspects from an audit and compliance risk perspective. The course uses a range of typologies, exercises and case studies to enable the participants to consider transactions and identify the key risk compliance features, areas of due diligence and further information required to make a risk-based assessment

Day 1 Introductions ■ Trainer & participants ■ What do you know? ■ Aims and objectives. ■ Course context.

Financial Crime Compliance ■ Consituent parts (money laundering, ter-

rorist financing, sanctions breaches) ■ Current examples ■ An introduction to the nature of compli-

ance risk in cross border transactions ■ Why are international trade transactions

increasingly a target for abuse? ■ The consequences of non-compliance (for

banks, corporates and individuals) Anti-Money Laundering (“AML”) ■ What is money laundering? ■ Why is money laundered? ■ How is money laundered? ■ The key stages of money laundering;

placement, layering, integration ■ Customer Due Diligence (CDD) ■ The risk-based approach to anti-money

laundering ■ Money laundering and terrorist financing

Case study concerning the involvement of, and consequences for, an international bank which transferred money arising from drug smuggling across three continents.

Countering the Financing of Terrorism (CFT) ■ Key differences between CFT and AML ■ The importance of due diligence and fo-

cussed screening Case study concerning the involvement of, and consequences for, an international bank which was identified as having processed funds used to finance terrorism. Sanctions ■ What are sanctions? ■ Why are they imposed and what is their

intended impact? ■ Who imposes them and on whom are they

imposed? ■ What is the difference between a trade em-

bargo and financial sanctions? ■ Examples of sanctions imposed in recent


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years ■ The relevance of due diligence and screen-

ing Case study on sanctions breaches concerning a major UK corporate.

Financial crime also relates to:- ■ Bribery & corruption ■ Tax evasion ■ Proliferation

Facilitation of money laundering ■ Complexity ■ Three stages of money laundering ■ Financial products vs open account ■ Co-mingling ■ Cash ■ Fraud ■ Smuggling ■ Transfer pricing, etc. ■ Capital Flight ■ Foreign Exchange

Examples of legitimising the movement of illicit monies. a) the use of over-inflated invoicing representing “management charges b) misrepresentation of invoice value, multiple invoicing and false description of goods

Correspondent banking ■ What is the role of a correspondent bank? ■ Why is correspondent banking fundamental

to cross border money flows? ■ The counterparty compliance risk of using

Correspondent Banks ■ The use and operation of Nostro, Vostro

and Loro accounts ■ Correspondent banking infrastructure;

• Message authentication; • Provision of payment, trade and treasury

services; • Cash management

■ Risk profile of remitting, receiving and re-imbursement parties in cross border trans-actions

■ Know your customer; the impact of ”KYCC” ■ Key compliance risk zones:

• Ownership and control • Jurisdiction • Quality of jurisdictional regulatory and

supervisory framework

• Adequacy of AML and sanctions compliance procedures

• Nature of respondent’s business • Client base • Shell banks • Direct access accounts • Downstream correspondents • Correspondent network rationalisation

Exercise; due diligence and risk considerations

Financial Institutions - as customers: ■ Compliance risk assessment framework; key

components ■ Due diligence and risk assessment ■ Unacceptable customers ■ Monitoring activity – warning signals, red

flags, Financial Action Taskforce (FATF) recom-mendations.

International Payments / SWIFT Messaging ■ The mechanics of cross border funds transfers

and nature of the payment instruction ■ Parties; remitter, originator bank, receiving

bank, beneficiary, cover/reimbursing bank ■ What is SWIFT? ■ What is the function and operation; ■ Understanding the use and role of SWIFT “MT”

message types in payments and trade trans-actions

■ Compliance risk;• Correspondent bank • Message abuse • Inappropriate use of message types

■ Message stripping ■ Methods of international bank transfer:

• Direct and serial processing method (the use of SWIFT MT 103)

• Cover method (the use of SWIFT MT103 plus SWIFT MT202 COV)

• The compliance risk implications of SWIFT MT202

■ Value dating ■ Key compliance risk zones:

• Message information • Originator; ownership, jurisdiction • Beneficiary; ownership, jurisdiction • Nature and value of payment – ordinary

course of business? • Screening – designated persons – sanc-

tioned countries? ■ The compliance risk exposure of US dollar

transfers


continued...





■ High risk customers requiring payment services

■ Red flag suspicious activity indicators

Global Cash Management ■ Examples of global cash management

(concentration/pooling, zero and target balancing)

■ Parties; corporate structures, pool partici-pants and banks

■ Key compliance risk: • Pool participants; ownership, jurisdic-

tion• Nature of business • Correspondent/partner banks • Origin and nature of funds • Co-mingling of legitimate and illicit

monies ■ Monitoring activity – warning signals ■ Compliance risk profile

Case study re corporate group cross border cash concentration arrangement used to disguise illicit funds (from a subsidiary) and recirculation through apparent trade purposes Managing Risk ■ Risk Assessment and due diligence ■ Know your customer (KYC) ■ Red Flags and responsibilities ■ Identifying suspicious activity ■ Regulatory environment ■ Counterfeiting

Video / discussion on CDD, KYC, etc. Case study on the cost of non-compliance re AML and sanctions violation

■ Summary of day’s learning ■ Opportunity to refresh clarify key points,


Preparation for day 2 Day 2

■ Review of principal considerations re Fi-nancial Crime Compliance

■ Key learning points form Day1 ■ Any questions / thoughts which have arise ■ Introduction to Day 2

Trade Finance

Trade Transactions ■ Principal parties and associated risks ■ Objectives of principal parties ■ Understanding the trade cycle ■ Additional risks of trading internationally

Description, function and operation: ■ The nature and purpose trade finance ■ What trade finance is and why it is required

Why trade finance carries high compliance risk

■ High risk components (e.g.) ■ Trade finance compliance risk characteristics;

• Counterparties – “know your customer’s customer”

• Parties; different roles of banks; fragment-ed bank involvement

• Transactions; complexity & banks deal in documents – validation?

• Negotiable instruments • Involvement of third parties (agents, carri-

ers, etc) • Jurisdictions / role of finance in cross bor-

der abuse

Comparison between international payments and documentary trade finance in the compliance risk environment: ■ Automated screening ■ Message stripping ■ Manual based due diligence

Trade based money laundering (TBML) ■ Definition ■ FCA Thematic Review ■ Increasing focus of criminal activity ■ Compliance considerations ■ Risk mitigation (KYC; KYCC; information

screening; document checking; red flags; etc.)

■ Common methods of trade based money laundering

Core Trade Finance Products ■ Open Account Trading ■ Trade cycle ■ Incoterms ■ Risk considerations (counterparty, credit,

FCC) ■ Products overview ■ Compliance risk assessment (bank controlled

payment/reimbursement)


continued...





Case study; the assessment of a business transaction, requiring identification of potential risk issues Documentary collections ■ What is a documentary collection? ■ What is the purpose of a documentary

collection? ■ Principal parties and roles ■ Document requirements and purpose ■ Types; sight (DP), usance (DA) ■ URC522 ■ Compliance risk assessment;

• Remitting bank due diligence • Collecting bank due diligence

Case study on the assessment of a potential AML / CFT / sanctions breach documentary credit transaction, requiring identification of key compliance risk issues and the need for further information to make a risk-based assessment

Documentary Letters of credit ■ What is a letter of credit? ■ What is the purpose of a letter of credit? ■ Principal parties and roles ■ Other considerations:-

• The independence principle • Application process • Workability

■ Different types of letter of credit (overview) • Irrevocable / revocable • Unconfirmed / confirmed • Transferable (parties and operation,

compliance risk) • Standby • Revolving • Back to back • Synthetic

■ Trade documentation; vulnerability to abuse and compliance risk

■ UCP 600 ■ Compliance risk assessment; issuance,

presentation of documents, payment; Issuing / advising / negotiating bank; the importance of LC availability

■ Red clause / sanctions clausing ■ Payment terms ■ LC confirmation; financial engagement and

responsibility; discounting

Case study to identify unusual features of a letter of credit request and identify the red flag suspicious activity characteristics

Bank Guarantees ■ What are bank guarantees? ■ Principal parties ■ The characteristics of “on demand” uncondi-

tional guarantees ■ Autonomy and the independence principle ■ Types and use of guarantees in trade (bid, APG,

performance) ■ Direct, indirect and counter guarantees ■ Transferable guarantees; key compliance risks

aspects ■ Foreign laws and usage ■ General compliance risk and vulnerability to

criminal abuse ■ Structuring guarantees to reduce compliance

risk exposure ■ URDG 758

Case study to consider the compliance risk aspects of a request for a transferable letter of guarantee and the further information required to undertake due diligence; use of additional information to identify unusual features and consider an appropriate course of action

Non-core Trade Products and processes

Forfaiting ■ What is forfaiting? ■ Principal parties ■ Primary and secondary forfaiting transactions ■ How to establish debt instrument authenticity ■ The importance of due diligence; is there an

underlying trade transaction?

Commodity Finance ■ Characteristics of commodity finance ■ Key compliance risk zones :

• Emerging markets/high risk jurisdictions • Commodity traders (nature and vulnerability

to compliance risk) • Value and existence of goods

■ Syndicated facilities (due diligence on other lenders/participants)

■ Pre-export & pre-payment finance (high risk environment) • Key compliance risk aspects/deployment of

risk mitigation ■ Warehouse financing

• Parties


continued...




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• Key compliance risk aspects/deployment of risk mitigation techniques

• The use and vulnerability of warehouse receipts & role of collateral managers

■ Tolling ■ Key compliance risk considerations

Case study re the use of commodity based pre-payments to disguise the movement of laundered funds

Receivables finance ■ What is receivables finance? ■ Compliance risk vulnerabilities of financing

open account transactions ■ Forms of receivables finance:

• Full factoring • Confidential invoice discounting• Specific insured receivables finance • Reverse factoring

■ The use of receivables finance in the con-text of trade finance

Payables finance / Supply Chain Finance ■ What is payables finance and when is it

used? ■ Principal parties ■ Types of payables finance; description, op-

eration and parties: • Pre-shipment payables finance (suppli-

er-led) • Approved payables finance (buyer-led)

COMPLIANCE CONSIDERATIONS ■ Trade based money laundering character-

istics ■ Vulnerability of cross border transactions to

fraud ■ Information screening ■ Document checking ■ Red flags

Mitigating Risk ■ Know your customer and your customer’s

customer ■ Understand the trade cycle and what is

‘ordinary business’ ■ Compare and contrast ■ Is the complexity of the transaction neces-

sary? ■ Follow the money ■ Apply common sense ■ Ask the right questions ■ The importance of first line of defence

■ Red flags ■ Fraud

■ Summary of day’s learning ■ Opportunity to refresh clarify key points,


Conclusion & next steps for action





Course Content

International Trade Finance MasterclassDate: 13 – 15 November 2018

Location: London Standard Price: £1,595 +VAT Membership Price: 1,276+ VAT

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Course Overview

Day One Despite increasing movement to unstructured open account trading there is still a place for Trade Finance particularly for small and medium sized enterprises. Day one will provide a firm foundation to participants new to the concepts of trade finance, as well as reinforcing and consolidating the knowledge of those participants who already have experience. In learning how to identify customer needs participants will be better placed to recommend appropriate product solutions. In addition, the course will help participants to identify and assess various risks to both bank and customer in international trade transactions, as well as being able to explain and identify ways of mitigating the underlying risks associated with trade finance transactions. Included in the course are practical sections covering documentation, core products, documentary collections, documentary letters of credit and contract guarantees, as well as the importance of the various International Chamber of Commerce (ICC) rules and practices and a high-level oversight into Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT) and Sanctions considerations. Days Two and Three Trade Finance has been “re-discovered” yet remains a little mysterious. It is a product that has always generated strong revenues- often non funds based – and traditionally has exceptionally low credit losses (on a portfolio basis). Most global banks are able to apply very low probability of default ratios and usually lose as much to fraud as to actual credit losses. The major general challenge to trade finance in recent times has been the impact of Financial Crime Compliance and Sanctions. Whilst credit losses and hence credit risk is low, FCC risk is very high because of the increasing tendency for global trade to pass through more than one country, use different modes of transport, use different currencies and transit through some regions where money laundering controls are not as strong as in others. This makes the audit trail very challenging. This is not a course about FCC but as trade finance is reckoned to be the main driver for money laundering, it needs to be understood. To compound matters, many global banks have reduced their correspondent banking networks by up to two thirds – often based on the Transparency International CPI. This means it is becoming increasingly likely that more than two banks are involved in a transaction, causing delays in processing and frustration for the client. Sight LC’s can take 10-15 working days to be processed when there are two to three advising banks. Of course this has created opportunities for confirmation activities – provided FCC clearance is obtained. Another challenge of trade finance is the tendency for banks to re-invent the wheel by using impressive sounding and not always easy to define marketing names to describe “new” products which are not actually new. “Buyer centric supply chain solution” actually is the sexier name for reverse factoring. This practical two day advanced level course will concentrate on what is happening in the market right now leaving delegates with a clear and working knowledge of how trade finance is undertaken in the real world, what actually happens and what are the implications for all parties concerned. A good working knowledge and familiarity with International Trade finance is required to derive the maximum benefit from this course.


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International Trade Finance Masterclass

Day One


What is Trade Finance? ■ Benefits of trade finance to businesses and

banks ■ Introduction to the trade cycle ■ Incoterms 2010

• Summary of terms • The advantages/disadvantages to Importer/

Exporter in the use of Incoterms 2010 • Principal methods of settlement

■ General Risk Considerations • Trade finance products vs open account • Financial Crime Compliance - AML, CFT and

Sanctions • Know Your Customer (KYC) and Customer

Due Diligence (CDD) • Correspondent Bank risk • Counterparty risk • Credit risk

Case Study: Short exercise to check understanding of Incoterms application. Key characteristics of Commercial Documents used in international trade ■ Invoices (commercial, tax, customs, consular,

pro-forma invoice) ■ Marine/Ocean Bills of Lading

• Title, transfer • Control of goods (transferable B/L v.

straight consigneed) • Delivery considerations

■ Other forms of transport document • Multimodal Transport Document • Air Transport Document • Road, Rail or Inland Waterway Transport

Documents • Non-negotiable bills of lading

■ Insurance Policy/Certificate ■ Other certificates (Certificate of Origin, In-

spection Certificate, Phytosanitary, etc) ■ Bills of exchange

Exercise - using examples of commercial documents to help participants to understand their technical content, the significance and importance of particular documents.

Core Trade Products ■ Import / Export Documentary Collections ■ Letters of Credit ■ Guarantees

Import / Export Documentary Collections ■ Principal parties (buyer, seller, presenting bank,

remitting / collecting bank) ■ Benefits to importers and exporters of Docu-

mentary Collections ■ Relationship between principal and banks ■ Role of banks (incl. correspondent banks /

agency arrangements) ■ Legal and practical issues re the duties of the

banks involved in handling collections ■ Conditions for release of documents ■ Areas of risk:

• Usance collections • Partial payments • Avalisation (so rare would exclude) • Release of goods on trust

■ Procedures for Protest of Bill of Exchange (B/E) and underlying risks

■ Complexities of the ICC Uniform Rules for Col-lection (URC 522)

Case Studies a) to consider the needs of an exporter or importer and suitability of using Documentary Collection in a cross-border transaction and / or b) to check understanding of the collections procedure and the practical application of the URC 522

Documentary Letters of Credit ■ Principal parties (buyer, seller, issuing bank,

advising bank, confirming bank) ■ Benefits to importers and exporters of Docu-

mentary Letters of Credit ■ Relationship between buyer, seller and banks ■ Advantages / disadvantages of letters of credit ■ Risk factors re issuing letters of credit ■ The autonomy of letter of credit operations (In-

dependence Principle) ■ Importance of the application form (legal is-

sues) ■ Instructions to issue/amend credits ■ Workability of the credit ■ Jurisdiction

Introduction to the International Chamber of Commerce UCP 600 Rules: ■ Structure and obligations under letter of credit; ■ Availability of credits, expiry date and place for

presentation ■ Availability by payment, deferred payment, ac-




Course Content

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ceptance, deferred payment standard for ex-amination of documents; dealing with discrep-ant documents, waiver and notice of refusal;

Examination of documents ■ Key elements of the main articles of UCP 600 ■ The standard for examination of documents:

“no conflict” rule – article 14 ■ Processing non-compliant documents as Nomi-

nated/Confirming Bank ■ Processing non-compliant documents as Issu-

ing Bank ■ Risks arising from non-adherence to UCP 600 ■ Legal cases and ICC Banking Commission

opinions ■ DOCDEX – dispute settlement mechanism of

ICC for trade finance ■ Analysing irregularities in documents

International Standard Banking Practice ISBP 745 (2013 Rev) ■ What constitutes an “alteration” or “addition”

to a document, when and how should these be authenticated?


■ How should one handle typing errors on documents regarding the name and address, different addresses of same company, etc.?


Advising Bank, Nominated Bank, Confirming Bank



■ Assignment of procceds

Case Studies a) to consider the needs of an exporter or importer and suitability of using a Letter of Credit in a cross-border transaction and / or

b) to check understanding of the collections procedure and the practical application of the UCP600

Other forms of Letter or Credit A review of the purpose, procedure and risks associated with: ■ Irrevocable / revocable ■ Usance credits ■ Transferable Credits

■ Back-to-Back Credits ■ Red and Green Clause Credits ■ Revolving / Reinstatement Credits ■ Standby Credits ■ Synthetic Credits

Guarantees ■ Types of guarantees:

• Tender/bid bonds • Advance payment guarantees • Performance bonds • Retention money guarantees • Warranty Guarantees (Maintenance guaran-

tees) • Bail bonds • Payment guarantees • Indemnities/counter guarantees

■ Risk Assessment (including risk weighting) ■ Wording of Guarantees ■ Demand under guarantees: issues ■ Extend or Pay demands ■ Expiry and Cancellation Uniform Rules for De-

mand Guarantees 758: main principles, URDG 758 guarantee sample wording, sample claus-es

Case Study to review guarantees which caused a loss to the bank. Discuss the practical application of URDG 758 and potential for use in local banking practice and legal jurisdictions.

Financial Crime Compliance ■ Consituent parts (money laundering, terrorist

financing, sanctions breaches) ■ Current examples ■ An introduction to the nature of compliance

risk in cross border transactions ■ Why are international trade transactions in-

creasingly a target for abuse? ■ The consequences of non-compliance (for


Case Study: Participants work in groups to consider the needs of various SMEs and to identify the appropriate product solution. ■ Summary of day’s learning ■ Opportunity to refresh clarify key points, clar-

ify ■ Review main learning points.




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Day Two The Current Market Place ■ Recent evolution and current developments ■ The challenge of emerging markets ■ The challenge of China ■ Brexit ■ President Trump ■ New products ■ The traditional three bands of clients: Global

and Large Corporate, MME’s, the rest! ■ Understanding trade finance at a fundamental

level.’ ■ Typical users of Trade Finance products and

services

Financial Crime Compliance & Sanctions ■ Understanding the risk based approach ■ Impact on Trade Finance ■ TI, CPI and its impact ■ FATF ■ DDD and the need to obtain a clear line of

sight across the value chain ■ Money laundering methodologies ■ Ghost payments and variations ■ Under/over invoicing and variations ■ Documentary fraud ■ PEPS ■ Sanctions ■ Risk mitigation, management and transfer

Case Study: Delegates will be asked to consider a real case to identify FCC risks and suggest how they may have been managed and mitigated

Traditional Risks – The Critical Issues ■ Understanding, identifying and managing risk ■ Credit risk, Market risk & Operational risk ■ Sovereign, Political / Country risk ■ Institutional risk / Bank risk ■ Corporate and other critical risks ■ Importer and Exporter’s risk ■ Other risks in the transaction and how to mit-

igate them (transport risk, warehousing, force majeure, etc.)

■ Risk mitigation, management and transfer Case Study: An example using three different payment methods. Delegates will be asked to identify and explain what type of client would choose one in preference to the other two and why, to illustrate risks in reality.

Review of Key Products ■ How does the customer analyse his risk? ■ Which products does he use and why? ■ Payment in Advance ■ Open Account ■ Collections – Outward & Inward / Clean & Doc-

umentary ■ Letters of Credit (covered in more detail below) ■ Risks and opportunities ■ Control possibilities

Case Study: Showing how clients sometimes see the world of risk in a different way to bankers.

Supply Chain Management & Finance ■ The origins of SCM and what does it mean in

practice ■ Understanding the issues in SCM – “the tug of

war” between supplier & buyer ■ Bringing about a “balance” between parties for

effective processing ■ Understanding about movement of ‘information’

,’goods’ and ‘cash’ ■ Supply Chain Finance Main SCF models: ac-

counts payable - centric, accounts receivable, BPO

■ Review the risk aspects of SCF Case Study: Showing how Reverse Factoring works and how both Buyer Centric and Seller Centric models are being employed.

Letters of Credit (L/Cs) ■ Traditional L/C’sThe four contract concept ■ Confirmations ■ Red Clause ■ Green clause ■ Revolving L/Cs ■ Evergreen ■ Transferable L/Cs ■ Back to Back L/C structures

Case Study: Showing how different types of LC’s are used, why this is the case and what difference it makes to the risk profile.

Standby Letters of Credit ■ History and origin ■ The dominant trade finance product ■ Uses ■ Risk management ■ Issue and assessment ■ Pricing ■ Understanding the applicability of ISP98 and

UCP 600 for standbys ■ Fraud and unfair calling

Case Study: Using a standby in practice




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Export Finance issues ■ Looking at the big picture ■ Understanding the purpose of borrowing ■ Country risk issues ■ The reality of title and control ■ Negotiation under letters of credit ■ Discounting of deferred payment L/C, accept-

ance credits (with or without recourse) Case Study: Delegates are asked to consider how to fund an export order using different types of contract arrangements.

Controlling Credit Exposure – Formulating a Limit ■ Understanding and explaining the trade cycle ■ The use of time lines ■ Assessing and appreciating funding gaps

Case Study: Using time lines and facility plotting to spot double finance and identify the actual funding gaps and customer needs.

Day Three Structuring Finance for the Trader ■ Analysing the trade flows ■ Assessing facility size and structure ■ Specific lending with identifiable maturity


ment Case Study: An example of a medium size business using structured finance. Effective Use of Collections for Short-Term Finance ■ Using collections as financing opportunities ■ Identifying and mitigating risks ■ Maintaining control

Supporting the Trader ■ Using the goods as collateral ■ Assessing the value of goods ■ The value of pledges and trust receipts ■ The need for structured lending

Case Study: How to use goods as security for a trade deal. Warehousing of Goods ■ Warehouse location ■ Management assessment ■ Legal frameworks ■ Obtaining and retaining title and control ■ Risks and responsibilities of Collateral Manag-

ers

■ Cost versus control Case Study: Warehousing in practice using a real example. International Demand and Contract Guarantees / Bonds ■ Scope and Application – an introduction

(suretyship v. demand guarantee) ■ Indemnities versus guarantees ■ Different types - Bid, Performance, Advance

payment, Warranty and Retention bonds ■ Rules governing guarantees and bonds ■ Legal jurisdiction and expiry date issues ■ Value of using URDG 758 – ICC Rules for de-

mand guarantees ■ Impact of non bank competitors – COFACE,

Euler Hermes Case Study: Using these in practice.

Receivables Financing ■ Mechanics of Factoring and Invoice Discount-

ing ■ Forfaiting – an important adjunct to the TF

mechanism ■ Role of Credit Insurance ■ Mechanics of Securitisation ■ FCC risks

Case Study: A real example showing how this makes a huge difference to working capital. The Commodity Sector and its Players ■ History and origins of the commodity industry ■ Understanding the nature of ’commodities’ ■ Analysing the players – growers / producers;

traders and end-users ■ Financing of commodities ■ Looking beyond the balance sheet ■ Available documentation – taking and retain-

ing title ■ Commodity futures, options and derivatives ■ Hedging – a critical process in commodity

finance ■ Role and function of the exchanges ■ Main risks in the commodity trade (market,

fraudulent practices, legal issues, recent legal cases)

Case study: A large scale commodity deal and how it can be funded at an acceptable level of risk

Countertrade ■ Overview – when to use ■ Pitfalls and complications ■ Possible structures and Time management




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Syndications ■ When to syndicate ■ Lead or participant role ■ The completion from capital markets – high

yield bonds ■ Selling down exposure ■ Impact of quasi-governmental agencies ■ Risk/reward analysis

Case Study: A syndicated deal.




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Trade Finance SalesIn-House or via Live Webinar

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Course Overview

Practical workshop on international payment and security instruments with special focus on documentary collections, documentary credits, demand guarantees and short term receivable finance from the sales perspective. The seminar has been developed to address the most important aspects of the trade finance in order to better understand needs of bank customers active in the international trade. In contrast to other seminars on trade finance, the focus on this trade finance sales workshop is to develop knowledge and understanding of the trade finance services in order to sell/offer these services effectively. The scope and the content of the course, consequently, has been tailored to meet this overall goal.To sell trade finance services to the customers effectively, one must: ■ understand how the main trade finance services and products work; ■ what are the overall benefits for their users, ie. bank customers; ■ what are the costs, risks, main practical issues involved and other main aspects which signifi-

cantly influence the bank – customer relationship.

This Workshop has been designed to deal with the most relevant aspects of trade finance sales and is, therefore, a must for: ■ bank relationship managers dealing with exporters, importers and traders; ■ bankers working in trade finance, particularly in documentary payments, bank guarantees and

export/import finance departments, especially those responsible for the business relationship with customers and their support in the area of trade finance;

■ specialists in trade finance with a working experience, back office bank specialists who wish to broaden their knowledge about trade finance from sales/relationship point of view;

■ lawyers, advocates, academics who want to learn about short term trade finance services with focus on their overall operations, benefits for users, costs, risks involved, etc.

The seminar deals with both the standard and more advanced situations and practical issues in relation to export and import documentary collections, documentary credits and their financing, demand guarantees in accordance with best practices as reflected in ICC rules and publications. A part of the workshop will also relate to short term trade finance, ie. factoring, use of credit insurance and will provide an introduction to supply chain finance. Objective of the training: The main purpose of the seminar is to familiarize the participants with the main trade finance products in order to understand how they operate, what are their main benefits for their users, but also what are the main risks involved, associated costs, the main issues the users face in their practice. The participants, after the course, would be able to speak knowledgably with their current and potential customers about the trade finance services their banks provide, thus better supporting the bank´s aspiration to increase the volumes and profits from these services, as well as enhancing the customer´s overall experience of dealing with the bank.

The seminar will be provided in the form of case studies, examples and discussions, i.e. active participation will be encouraged.

Material relevant to the course will be distributed and a certificate of attendance will be delivered to all those who completed the course.

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Trade Finance SalesContinued

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Course Content

Day OneInternational trade, main issues, payment methods, financing needs International Trade – the main issues and risks to be considered ■ Risks from the Exporter´s perspective ■ Risks from the Importer´s perspective ■ Know Your Customer – his problems might

become your problems as well! ■ Contract of Sale – main aspects to be con-

sidered by the Exporter and the Importer ■ Contract of Sale from the banker´s point of

view ■ Delivery Terms as per Incoterms 2010 –

what do they do? ■ Delivery terms for any mode of transport ■ Delivery terms for marine transport ■ How to choose the right Incoterm? ■ The choice of delivery term from the financ-

ing banker´s point of viewCase Study International Trade – role of documentation ■ Main documents in international trade –

their roles ■ Financial documents, Commercial docu-

ments, Transport documents, Insurance documents – the main aspects to be aware about

■ Bills of Lading v. consignment notes – con-trol over the goods during transit

■ Security interest in the goods in transit from banker´s point of view

International Trade – risk mitigation tools, payment instruments and financing techniques ■ Main payment conditions in international

trade ■ Payment in advance, payment after delivery ■ Documentary Collections and how they op-

erate ■ The benefits for the Exporters and Import-

ers in using Collections ■ Documentary Collections from banker´s

point of view, an opportunity for the cross selling

■ Cost, risks, main mistakes in practice and how to avoid them

■ How to offer Documentary Collections to potential customers?

Case study – Collection in practice ■ Documentary Credits and how they operate ■ The benefits for the Exporters and Import-

ers in using Documentary Credits International Trade – risk mitigation tools, payment instruments and financing techniques ■ Trade Cycle of the Exporter and its financing

needs ■ Trade Cycle of the Importer and its financing

needsCase Study – delivery terms v. payment terms

Day Two

Documentary Credits and their financing, Bank Guarantees, Standbys, Receivable financingDocumentary Credits – How they function – best practices ■ Import Documentary Credit ■ Issuance of the Credit ■ The Application to issue a documentary credit

– main mistakes in practice ■ Import Documentary Credit as payment and

risk mitigation instrument ■ Cost, risks in Import Documentary Credits ■ How to offer Import Documentary Credits to

potential customers?Case study: issuance of the credit

■ Export Documentary Credit ■ Advising, Confirmation ■ Main mistakes in documentary credits from

Exporter´s perspective ■ Cost, risks in Export Documentary Credits ■ How to offer Export Documentary Credits to

potential customers?

Case study: mistakes in the export creditDocumentary Credits – Main financing services

■ Import credit – import financing (import loan v. deferred payment)

■ Export credit – pre-shipment finance – the benefits

■ Red clause, green clause credits, packing, manufacturing credits

■ Export credit – post-shipment finance, negoti-ation, post-financing, forfaiting – the benefits

■ Post financing: how to choose the right tech-nique?

Case study: cost of discounting a deferred payment credit

Use of credit and risk mitigation instruments: Bank Guarantees and Standbys ■ Bank Guarantees v. Conditional guarantees ■ Main types of guarantees, standbys ■ Examples of main types of guarantees

Case study: mistakes in an advance payment guarantee

■ How to offer bank guarantees to potential customers?

Receivable finance ■ Open account trade ■ Credit insurance – main principles from Ex-

porter´s perspective and from the perspective of the financing bank

■ Factoring – how it operates ■ Supply chain finance – main techniques ■ New developments: BPO, digitalization of

trade finance ■ Bank to Customer communication channels:

front end systems, etc. ■ Current main challenges: compliance issues,

new technology developments

Discussion

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Examination Of Documents Under Documentary CreditsIn-House or via Live Webinar

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Course Overview

Advanced practical workshop on examination of documents under documentary credits, i.e. The most demanding task of the documentary credit practice. The workshop has been developed to provide very comprehensive coverage of the subject. It will explain all main aspects of examination of documents in accordance with ICC Rules – UCP 600 as supplemented by ISBP 745. The most significant recent ICC Banking Commission Opinions and DOCDEX cases will be also covered in the lectures.

The workshop is very focused and practical. Participants will learn how to examine documents mainly by examining them themselves, i.e. There will be plenty of various cases studies, examples, debates on the issues.

This workshop has been designed to provide comprehensive and profound knowledge in relation to examination of documents under documentary credits at advanced level, and is, therefore, a must for: ■ Specialists in trade finance with a working experience, back office bank specialists who need to

broaden their knowledge and understanding of examination of documents as per ICC rules; ■ Bankers working in trade finance, particularly in documentary payments, bank guarantees and

export/import finance departments, especially those providing respective advisory services to the customers.

The workshop deals with both the standard and more advanced situations and practical issues in relation to documentary credits in accordance with best practices as reflected in ICC rules and publications. Participants will learn all relevant main UCP 600 and ISBP 745 provisions in practical manner, i.e. By applying them through various case studies and debates on the subject.

Objective of the training: ■ The main purpose of the seminar is to familiarize the participants with all main aspects of examina-

tion process, standard as well as more advanced situations, problematic issues and current topics in the field of documentary credit practice with particular focus on examination of documents.

■ ■ The workshop will be provided in the form of case studies, examples and discussions, i.e. with ac-

tive participation of all participants. ■ ■ Material relevant to the course will be distributed and a certificate of attendance will be delivered to

all those who completed the course. ■ A good working knowledge and familiarity with documentary credits is required to derive the maxi-

mum benefit from this course.

About the Resource PersonYour course lecturer has spent more than 25 years in international trade finance field. He is a leading international trainer and consultant in the field, well established specialist of the ICC Banking Commission. He has been active in various ICC Banking Commission activities (UCP, URDG revisions, creation of URF – rules for forfaiting, URBPO, etc.). He has lectured extensively on the subjects in more than 50 countries of the world, including the UK, Europe, MENA, Africa and Asia. He is an author of the leading best-selling book on “Examination of Documents under Documentary Credits“.

Course Content

Day 1

Examination of documents under Documentary Credits in Practice ■ Main rules regarding examination of docu-

ments as per UCP 600 and ISBP 745• Relationship between UCP 600 and

ISBP 745• Place and time for presentation as per

UCP 600, article 6• Place and time for presentation as per

L/C terms• Place for presentation and availability

of credits

■ Main standard for examination of documents• No conflict in data, • Illustration of „no conflict in data“princi-

ple, examples, ICC Opinions ■ Main general principles captured in ISBP 745

• Corrections, alternations• Issuers• abbreviations• copies v. originals• language• misspelings, typos• signatures

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Examination Of Documents Under Documentary Credits

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Course Content

Examination of financial documents – part1 ■ examination of bills of exchange, examples,

cases• tenor• endorsements• marking, other conditions

Examination of commercial documents – part 2 ■ Examination of commercial invoice, exam-

ples, cases• description of goods in commercial in-

voice• other aspects to examine

■ examination of packing list, examples, cases

■ examination of weight list, examples, cases ■ examination of commercial documents –

advanced case study

Examination of commercial documents – certificates – part 3 ■ Examination of inspection certificate, ex-

amples, cases ■ Examination of quality certificate, exam-

ples, cases ■ Examination of phytosanitary certificate,

examples, cases ■ Examination of veterinary certificate, ex-

amples, cases ■ Examination of fumigation certificate, ex-

amples, cases ■ Examination of inspection certificate, ex-

amples, cases ■ Examination of certificate of origin, exam-

ples, cases• Description of goods in certificate of

origin• Exporter, consignee• Origin of goods• Issuer, certification by chambre of com-

merce or similar organization• Different types of certificates of origin

■ Examination of certificates – advanced case study

Examination of transport documents – part 4 ■ examination of ocean bill of lading, exam-

ples, cases• on board notations• signatures• negotiable v. straight consigned• clean v. not clean bill of lading

■ examination of charter party bill of lading, examples, cases• specific issues with CP bills of lading:

more ports, transhipment ■ examination sea waybill, examples, cases ■ examination of multimodal transport docu-

ments, examples, cases• on board notations

• signatures• negotiable v. straight consigned• clean v. not clean MTD

■ examination of air waybill, examples, cases• names of airports• signatures

■ examination of road transport document, ex-amples, cases• specific issues with CMR • signatures

■ examination of railway transport document, examples, cases

■ examination of inland waterway transport doc-ument, examples, cases

■ examination of transport documents – ad-vanced case study

Examination of insurance documents – part 5 ■ examination of insurance policy, examples,

cases• issuer• insured, need for endorsement • risk covered • insured amount, currency • date of issuance, no expiry • ther issues with insurance documents

■ examination of insurance certificate, examples, cases

■ examination of insurance documents – ad-vanced case study

Day 2

Examination of documents under Documentary Credits in Practice ■ examination of set of documents including bill

of lading, advanced case study • discussion about found alleged discrepan-

cies

Examination of documents under Documentary Credits in Practice ■ examination of set of documents including air

waybill, advanced case study • discussion about found alleged discrepan-

cies

Examination of documents – more complicated situations ■ examination of documents under transferable

credits – specific issues explained ■ examination of documents under transferable

letter of credit, advanced case study• discussion about found alleged discrepan-

cies

Examination of documents – cases, debates ■ is it a discrepancy or not? – various case stud-

ies, examples ■ questions and answers, discussion about re-

maining issues

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Risk in Trade Finance and Trade Finance Products

In-House or via Live Webinar

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Course Overview

Trade Finance remains the engine at the heart of global economic growth with China still probably the most important participant. Commodity Finance sits at the heart of this trade dominated by oil and gas which according to some estimates, accounts for as much as 70% of all commodity trade. Global trade is reckoned to be worth $40 trillion and growing.

Trade finance is an interesting risk paradox. It has always been a business area where credit losses are typically very low (mainly fraud in practice), fee income opportunities are high and some of the products are very efficient users of capital. On the other hand it is a very high risk area for Financial Crime. It is estimated that as much as $2trillion is laundered annually, much of it using trade finance. Regulators and law enforcement agencies believe that if it is made as difficult as possible to launder money through banks, this could help stifle crime. Banks are expected to do their bit and this is having a significant (but manageable) impact in most banks. With trade typically transiting several countries, with different regulations and different regulatory standards, it is very difficult to manage the risks with precision. This remains a product offering that is watched very closely by regulators and policed ruthlessly (when it comes to sanctions) by OFAC.

This practical two day trade finance course is designed for relationship managers and those working in sales or supporting the sales team together with colleagues from credit department, responsible for approving trade finance propositions. It concentrates on risk identification and mitigation as well as how to explain the wide range of the Bank’s Trade finance services. It focuses particularly on risk assessment, delivery, need identification, and selling opportunities. The course encourages delegates to see issues from both the client’s and the bank’s relationship manager’s viewpoint.

The aim is to provide high quality trade finance services to the bank's clients in a seamless and helpful manner and to assist delegates understanding of the trade flows and the precise nature of the banking risks undertaken.

The course will also demonstrate the self-liquidating short term nature of most trade transactions. A clearer understanding of the actual banking risks should mean profitable business and earnings opportunities will arise as a natural consequence. The course encourages trade finance specialists to become user friendly general practitioners, rather than specialist custodians of knowledge, which can sometimes be the case from the client’s viewpoint. All clients want value for money services. This course aims to encourage delegates to deliver it.

Methodology:The course will be run as a workshop style classroom session, with detailed examples. Delegates are free to bring their own cases/examples to the sessions.

Level of Preparedness:Beginners are welcome although a very basic working knowledge and understanding of the methods of financing International Trade would be helpful.


http://redcliffetraining.co.uk/training/banking-training-courses/risk-management-in-trade-finance-course/

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Risk in Trade Finance and Trade Finance ProductsContinued

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Course Content

Trade Finance Overview ■ Historical evolution and current developments

in the market place ■ Principles of trade Finance ■ Parties to a transaction ■ Roles, obligations, interests ■ Typical users of Trade Finance products and

services ■ Payment mechanisms ■ Trends – Migration to open account ■ Risk Ladder and review of traditional trade

products

Risk – The Critical Issues ■ Understanding, identifying and managing risk ■ Risk ladder and trade products ■ Sovereign, Political / Country risk ■ Institutional risk / Bank risk ■ Corporate and other critical risks ■ Importer and Exporter’s risk – delivery, quali-

ty, payment etc ■ Risk mitigation, management and transfer ■ Risk migration versus commercial necessity ■ Managing risk within open account trade

Case Study – the impact of risk on trade – the often differing bank & client’s perspectives

Review of Key Products ■ The challenge to banks of disintermediation ■ How does your customer analyse his risk? ■ Which products does he use and why? ■ Cash in Advance - summary ■ Open Account – summary - the biggest risk

challenge for seller and the bank ■ Collections – summary - Outward & Inward /

Clean & Documentary ■ Letters of Credit - summary - (covered in

detail below), import and export ■ Risks and opportunities – bank versus client

perceptions ■ Marketing possibilities and opportunities

Case Study – how does your client choose to trade – what would you prefer?

Regulatory and Trade Conventions and Their Role in Risk Migration: ■ Incoterms - the list ■ Incoterms the impact ■ UCP 600 ■ URC ■ URDG

Risks inherent in Payment in Advance: ■ Definition and explanation ■ Risks ■ Mitigation techniques

■ Migration techniques ■ Risk/reward consideration ■ Commercial tug of war ■ Avoiding unhelpful retrospective advice

Case Study – How can the bank assist when there is no obvious role?

Risks inherent in Open Account Trading: ■ Definition and explanation ■ Risks ■ Mitigation techniques ■ Migration techniques ■ Risk/reward consideration ■ Commercial tug of war ■ Granting buyer/supplier credit

Why is it any different to domestic trade Case Study - how do we fund this client preferred method of trade?

Risks Inherent in Collections - Clean & Documentary: ■ Definition and explanation ■ Risks ■ Mitigation techniques ■ Migration techniques ■ Risk/reward consideration ■ Commercial tug of war ■ Granting buyer/supplier credit

What is the real point of a clean collectionCase Study – Imports are easier to fund using collections than exports – discuss?

Risks Inherent in Letters of Credit: ■ Definition and explanation ■ Risks ■ Mitigation techniques ■ Migration techniques ■ Risk/reward consideration ■ Commercial tug of war ■ Do we need 100% security cover? When and if

will this be relaxed

Letters of Credit (L/Cs) - Additional Mechanisms: ■ Transferable L/Cs ■ Revolving L/Cs ■ Evergreen L/Cs ■ Standby L/Cs ■ Back to back structures (brief intro) ■ L/C & Bill Discounting ■ Avalised bills

Case Study – This is by far the easiest and safest trade instrument for clientsand the banks. With the exception of Standby L/C’s why do conventional L/C’s account for less than 15% of all trade?





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Risk in Trade Finance and Trade Finance ProductsContinued

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Course Content

Financing & Managing Import Trade Risks in Challenging Markets ■ The value chain – bank perspective versus

client perspective ■ Structured vs. traditional trade finance ■ Risk analysis of a trade import deal looking

at • Credit risks• Product risks• Transactional risks• Price risks• Performance risks

Case study example – consider a hypothetical case STF – Risk Management in Financing Export STF ■ Prepayment ■ Pre-export ■ Pre shipment ■ Post shipment ■ When do sales actually become debtors ■ The reality of title and control

Case Study – L/C backed STF is easy to fund. How do we handle Open Account?

• Risk Assessment For Credit Analysis and Application Purposes: ■ Analysing the trade flows ■ Break even analysis ■ Assessing facility size and structure ■ Identifying and mitigating the risks ■ Gearing, repayment, profitability and li-

quidity. ■ Specific lending with identifiable maturity

dates ■ Appreciating and controlling sources of

repayment ■ Security – Is the last resort in practice de-

spite CCCPARTSCase Study - How can we re-learn short term TF skills and trade cycles and move away from the omnibus overdraft?

Effective Use of Collections for Short-Term Finance ■ Using collections as financing opportunities ■ Identifying and mitigating risks ■ Maintaining control

Case Study – example

Introduction to International Demand and Contract Guarantees / Bonds ■ URDG758 ■ Scope and Application – an introduction ■ Different types - Bid, Performance, Ad-

vance payment , Warranty and Retention bonds

■ Risk Migration – the challenge of unexpired bonds/guarantees

■ Opportunity spotting ■ Standby L/C’s (SBLCs) as Risk mitigators

Case Study – a construction client’s needs

Receivables Financing and Risk Migration ■ Mechanics of Securitisation ■ Factoring and Reverse Factoring ■ Mechanics of Factoring and Invoice Discount-

ing ■ Role of Credit Insurance

Case study – example

Introduction To Innovations In Risk Management and Migration ■ Silent confirmations ■ Silent Payment Guarantees ■ CTN options ■ Purchase and sales ledger options ■ Bank Assisted Open Account ■ Securitising funds flows, future flows, receiva-

bles and inventoriesCase study – How to use these techniques to establish a base relationship with a target client

Advisory Services ■ Core offerings ■ Trade intelligence ■ Payments & collections ■ Trouble shooting ■ Progress chasing ■ Translation and exposure risks ■ Counter party risks ■ Export & import specialist advice ■ Credit insurance ■ Other services

Introduction to ECA’s – Risk Transfer From the Bank to insurance Sector ■ Credit Insurance ■ Political Risk Insurances ■ ECA structures ■ Intermediation by ECA’s ■ UK Government Schemes

Commercial & Risk Q&ACourse Conclusion and Review / Feedback





Course Content

Trade Finance for LawyersIn-House or via Live Webinar

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Course Overview

This one day seminar, aimed at lawyers and non-bankers, provides and insight into trade finance practices and related risks.

After attending the course participants will be able to explain to their clients the benefits of using Incoterms, as well as detail the different methods of providing finance and their key characteristics.

They will also be able to assist with identifying and structuring the appropriate trade solutions for customers, assess various risks to both the bank and the client in international trade transactions and explain and identify ways of mitigating that risk.

Incoterms 2010: ■ The purpose of Incoterms ■ The 11 Incoterms ■ How Incoterms affect the documents that

exporters must produce

Key characteristics of Commercial & Financial Documents ■ Invoices ■ Transport Documents ■ Insurance Policy/Certificate ■ Understanding the use of Bills of Ex-

change and Promissory Notes

Documentary Collections ■ Parties and responsibilities ■ Uniform Rules for Collection 522

Introduction to UCP 600 ■ Purpose ■ Structure ■ Articles

Instructions to issue/amend Letters of Credit ■ The importance of the application form

(legal issues) ■ Workability of the credit

Examination of documents ■ International Standard Banking Practice

ISBP 681 ■ Key elements of the main articles of UCP

600 ■ Processing non-compliant documents as

issuing bank ■ Processing non-compliant documents as

Nominated/Confirming Bank ■ Risks arising from non-adherence to UCP

600 & ISBP 681

Related issues ■ Assignment of Proceeds under Letters of

Credit

Specialised Letters or Credit ■ Transferable ■ Back-to-Back ■ Red Clause Credits ■ Revolving & Reinstatement Credits ■ Evergreen Credits ■ Standby

Contract Guarantees ■ Types ■ Risks ■ Security ■ URDG 758

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Course Overview

This practical workshop style course is designed for relationship managers and those working in sales or supporting the sales team together with colleagues from credit department, responsible for approving finance propositions.

Invoice discounting is a significant form of corporate finance widely used by small and medium sized businesses, often alongside other asset based lending such as stock finance, hire purchase, term loans and trade finance. This course is designed to give practitioners an understanding of the peculiarities of this particular form of financing relationship, the problems which commonly arise during the recovery process and practical guidance on how to deal with risk identification and mitigation.

The training can be structured to focus particularly on risk assessment, delivery, need identification, and selling opportunities. The course encourages delegates to see issues from both the client’s and the bank’s relationship manager’s viewpoint.

The aim is to provide high quality invoice discounting to the bank’s clients in a seamless and helpful manner and to assist delegates understanding of the trade flows and the precise nature of the banking risks undertaken. The course will also demonstrate the self liquidating short term nature of most trade transactions.

Methodology:The course will be run as a workshop style classroom session, with detailed examples. Delegates are free to bring their own cases/examples to the sessions.

Level of PreparednessBeginners are welcome although a very basic working knowledge and understanding of the methods of financing domestic and International Trade would be helpful.

Course Content

Module 1: The Working Capital Cycle

■ The working capital cycle ■ Overtrading ■ A simple cash flow exercise to illustrate the

potential problems ■ Different types of working capital ■ When and how should a bank assist its

customers ■ When should the bank decline

Exercise: Working capital analysis

Module 2: Invoice discounting basics:

■ What is it? ■ The growth of invoice finance ■ Changes following Re Spectrum Plus Ltd ■ Invoice finance distinguished from lending

on security

■ The various forms of invoice finance ■ Notification and non-notification financing

(confidential versus disclosed) ■ General Risks ■ General Mitigation techniques

Exercise Case study to suit

Module 3: Setting up the Service:

■ Creating a product guidance manual ■ Setting operational parameters ■ The structure of the invoice finance agree-

ment ■ The purpose of the power of attorney grant-

ed, if used ■ The transfer of rights ancillary to the debt ■ Challenges to administration charges as pen-

alty clauses ■ The implications of Peekay Intermark


Invoice Discounting (Domestic & International)A Two Day Workshop Style Course


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Course Content

Module 4: Invoice Discounting in Practice

■ Minimum/maximum size ■ Minimum/Maximum client turnover ■ Percentage advanced ■ Individual invoices or a portfolio spread ■ Secured or unsecured ■ Commercial invoices only? ■ Collection time frame – what is a normal

time-scale ■ Issues Arising out of the Assignment of

Debts ■ The importance of a legal rather than equi-

table assignment ■ Vesting debts - when does the debt arise? ■ Non-vesting debts and the prohibition

against assignment ■ The effect of notice to the debtor, if any


Module 5: Early Engagement of Financial Crime Compliance (and sanctions if overseas transactions involved):

■ FCC risks ■ Sanctions risks ■ Screening ■ Inherent risks ■ Mitigants ■ Residual risks ■ CDD, EDD, Discrete DD, KYCBCBC…. ■ Approving individual invoices versus whole

sales ledger ■ Setting operational parameters ■ The structure of the invoice finance agree-

ment


Module 6: initial Client Assessment for Product Suitability:

■ Guidelines ■ Procedural instructions ■ New versus existing customers ■ Sales ledger review – if applicable ■ Limit setting ■ Approvals – blanket and specific ■ Risk assessment outcome ■ Annual review or individual transactions


Module 7: Risk Assessment for Credit Analysis and Application Purposes:

■ Creating procedural guidelines ■ Setting parameters ■ Analysing the working capital flows ■ Break even analysis ■ Double funding risks ■ Assessing facility size and structure ■ Identifying and mitigating the risks ■ Gearing, repayment, profitability and liquidity. ■ Specific lending with identifiable maturity


ment ■ Security – Is the last resort in practice despite

CCCPARTS


Module 8: Fraud & Conflicts with third parties:

■ The distinction between warranties, guaran-tees, indemnities and hybrids securities

■ Conflicts with third parties, including priority disputes with competing assignees

■ Fraud and Asset Recovery ■ Classic frauds faced by invoice financiers ■ Proving damage: GE Commercial Finance v

Gee ■ The meaning and effect of the trust provisions ■ When to rely upon the remedies of dishonest

assistance and knowing receipt ■ Proprietary remedies and tracing in insolvency ■ Freezing injunctions and search orders ■ Mitigation techniques


Module 9: Financing & Managing Trade Risks in Challenging Markets

■ The value chain – bank perspective versus client perspective

■ Structured vs. traditional trade finance ■ Risk analysis of a trade import deal looking at

• Credit risks• Product risks• Transactional risks





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• Price risks• Performance risks


Module 10: Charges and Fees

■ Structure and application ■ Individual fees or flat percentage charge ■ Fees and interest ■ Recourse options

Module 11: Managing the Product

■ Manual process ■ Automated process ■ Audit process ■ Roles and responsibilities ■ Fees and interest ■ Recourse options


Module 12: What to do When it Goes Wrong

■ A rare event – usually ■ KPI’s and KRI’s ■ Warning signs ■ When to intervene ■ Who actually enforces the invoice ■ Recourse agreements in practice – espe-

cially with valuable clients ■ Recovery procedures ■ Enforcing security







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Course Overview

Overview of the commodity markets ■ Major price drivers ■ Supply Constraints ■ The Impact of China ■ Investing in Commodities ■ Correlations ■ The markets

• Spot and forward markets • Futures & options • Trading options • Trading on margin

■ Benchmark Derivative Contracts

Course Content

Commodities Markets

The Energy Markets ■ Understanding oil & energy ■ Macro-economic events ■ Geo-political risk ■ Oil

• OPEC & non-OPEC production • Benchmarks • NYMEX WTI • ICE Brent • Light and Heavy Oil • Sweet and Sour

■ The energy exchanges • LME

■ Energy Products • Electricity and Gas Markets • Spark Spread

■ Trading & trading strategies

Base Metal Markets ■ About base metals ■ Price drivers ■ The exchanges ■ Base metals ■ Trading & trading strategies

Gold and Precious Metal Trading ■ Understanding gold ■ Silver & PGMs (Platinum Group Metals)

Agricultural Markets ■ Overview of Agricultural Products ■ Price drivers & seasonality ■ Weather ■ Trade associations & government control ■ The products ■ Market reports

■ Price drivers ■ Producer/retail hedging

The Economics ■ Global markets & supply & demand ■ Economic growth ■ Natural & man-made disasters ■ Producer data and inventories

Future Price Trends ■ Delegates are asked to look at past and pres-

ent price charts and come up with some ideas about the future trends for various commodi-ties.

■ We discuss their findings and discuss what sort of investment and/or trade would best match their risk / reward structure.



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Course Content

Agribusiness


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Course Overview

Agribusiness, from farms through wholesalers and traders through to supermarkets, is experiencing a fundamental shift towards the importance of land and more commercialised farming operations, tighter supply chains, greater third party investment and fluctuating valuations. Never has there been a greater need for this course. With numerous topical case studies and exercises it is designed to build a comprehensive understanding of agricultural commodity markets, the production, distribution and marketing of agricultural commodities worldwide, agribusiness lending, trade, and investment and risk management.

Day 1 Introduction to global agriculture, food and agricultural commodities Why does agriculture matter so much? ■ Land and pricing ■ Demography and food production ■ Environmental aspects of agricultural pro-

duction Case Study: Country of your choice agriculture and its contribution to GDP The Green Revolution and its aftermath ■ Food technologies ■ Yield growth ■ Varietal improvements

Agricultural technologies Agricultural Commodities and markets ■ The food chain ■ The international Food Trade

The State of Global Agriculture in 2018 ■ Production and consumption of major agri-

cultural commodities ■ Agriculture and Public Policy ■ Food, Agriculture, and Natural Resource

Policy ■ Government agricultural support pro-

grammes (eg EU CAP,USDA) ■ International programmes and organiza-

tions Group discussion: agriculture and politics in Country of your choice - the crucial interface

Case Study - Importing wheat to Region of your choice Case Study - The Institute for Rice Research in the Philippines – do cassava and other commodities need an equivalent? Agriculture in Practice Managing a Farm ■ Subsistence farming and its survival algo-

rithms ■ The family farm ■ Production functions and profitability ■ Farm Business Organization ■ Whole Farm Planning

Case Study: Agrimaster, farm software, and excel models for farm management compared and contrasted

■ Farm lending and financing

Case Studies: Region of your choice bank analysis of agribusiness lending opportunities

■ Farm and Agribusiness Management in the Future

Marketing and Selling Agricultural Commodities ■ Marketing agricultural commodities ■ Agricultural Marketing and Price Analysis

Handling Agricultural Risk ■ Contract farming – how it works ■ Agricultural commodity volatility – history,

underlying determinants and management (forwards, swaps, options and futures, exot-ics)



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AgribusinessContinued...

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Course Content

■ Modelling risk – sensitivity analysis, scenari-os and Monte Carlo

Case Study – Derivative exchanges in Africa and the world – how can Indonesian agribusiness hedge its risk?

Day 2 International Agribusiness The Industry worldwide ■ Size and scope ■ Exporters and importers ■ Vertical and horizontal integration

Case Study: The country of your choice dairy industry ■ Major commodity companies

Case Study: Cargill, friend or foe? ■ Smaller commodity trading companies and

brokers

Case Study: rice brokers worldwide

■ Collaboration and M&A in global agribusiness

Case Study: Glencore takeover strategies

Investment appraisal and trading in agribusiness ■ Project economics ■ How to forecast agricultural cash flows ■ Decision-making criteria (NPV, IRR, MIRR,

etc) ■ Accounting issues ■ Environmental caveats ■ Risk management issues

Major exercise: Comparing investment opportunities in agribusiness Course Conclusion: The future of agribusiness


https://redcliffetraining.com/training/banking-courses/agribusiness-course/

The specialist in highly technical, market-driven banking and corporate finance training

web: redliffetraining.com email: [email protected] phone: +44 (0)20 7387 4484