143 Cecil Street, GB Building #11-01, Singapore 069542 (65) 6580 7356 executive@lsbf.edu.sg Trade Finance Overview The course will provide a full explanation of international trade finance concepts, products, players, compliances, fraud, and risk management. After completion of this course participants will be able to understand and analyse their customers’ supply chain and cash flow needs to offer suitable trade financing solutions for their needs. Participants will gain knowledge of different trade finance instruments and documentation required. They will also learn to perform the checks, compliances and manage risks associated with various instruments. The program will also cover latest trends, practices, policies, international standards and conventions and their impact on trade finance instruments and agreements. The course will provide opportunities to apply the knowledge gained through evaluation of case studies relating to structuring trade finance transactions. Participants will gain on knowledge on: ✓ Latest trends, ✓ Regulations and International standards, ✓ Essential documentation, ✓ Cash Flow Reporting ✓ Different trade finance tools and instruments, ✓ Risk management and mitigation, ✓ Trade and cash cycle, and ECA ✓ Trade Finance Infrastructures or Platforms ✓ Best Practices followed by banks internationally. Learning Objectives ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ Understand the risks involved in real international trade finance Learn to assess the impact of changes in regulations on the trade finance agreements Learn to advise on discrepancies in trade finance documentation and how to ensure the operational processes are adhered to Determine areas to develop or modify the procedures for effective risk management process Enhance decision making capability of the participants Learn to look for suspicious transactions and potential frauds in the trade finance transactions Improve their ability to understand the management ways in institutional and cultural circumstances Understanding the social responsibility of default in letter of credit and collection Course Outline 1. Introduction to Trade Finance ▪ Evolution, Role in Economy, Global Market Overview, Post COVID-19 Scenario ▪ What is the role of commercial banks in trade finance? ▪ What to expect from banks: Know Your Customer, Due Diligence, Transaction Monitoring, AML, and Compliance (MAS Guidelines) 2. Incoterms® rules 2020 ▪ Role / Risk & Responsibilities of Importer & Exporter while using INCOTERMS ▪ Usage of appropriate INCOTERMS – Risks of making an error on the PO/Invoice ▪ Key differences to Incoterms® 2010 © London School of Business and Finance (Last updated: 1 Feb 2021) 143 Cecil Street, GB Building #11-01, Singapore 069542 (65) 6580 7356 executive@lsbf.edu.sg ▪ ▪ 3. ▪ ▪ ▪ Examination of the most used Incoterms® Importance of Incoterms® from a trade financing perspective Letter of Credit and Bank Guarantees Process Comprehensive discussion on the LC Mechanism Understanding the commonly used Types and forms of LCs Documentation under LC transactions- Relevance of UCP 600 – Summary of key articles on UCP600 ▪ What constitute Discrepancies –How to deal with Discrepancies ▪ Risks to be addressed during an LC transaction ▪ Discussion on practical problems faced by member companies while handling various LC transactions across the world ▪ Process of letter of credit ▪ Types, aspects, parties, financing, risk mitigation etc. 4. Import and Export Documentation ▪ Concepts – Exports, Export Documents, Imports, Import Documents ▪ Financial Documents, Transport Documents, Regulatory Documents and Commercial Documents. Pre & post shipment Procedure and Documentation ▪ Customs Procedures ▪ Procedures & Submission of Documents to Banks ▪ Trade documentation: Bill of lading, Airway bill, Insurance certificate/ policy, Packing list, irrevocable letter of credit, application of letter of credit, pre -shipment inspection, LOC structure 5. Working Capital and Structured Financing ▪ Structured finance uses, types, benefits and parties involved ▪ Credit Assessments: 5 C’s ▪ Understanding the nature of debt and implications. ▪ Understanding the documents and risks involved. ▪ Bill of exchange and promissory note (examples) ▪ Recourse and re-purchase events ▪ Prepayment: Determining the amount to finance (prepay): dilutions and retentions ▪ Types of receivables finance and differences: Specific debt purchase: insured and uninsured, Factoring, invoice discounting. ▪ Export Credit Agency (ECA) support ▪ Role of an ECA, ECA support ▪ Commodity trade finance ▪ Types of commodity financing, commodities involved 6. Risks involved ▪ Apply credit enhancement techniques, ECA support and evaluate credit insurance ▪ Pre-export and prepayment: ▪ Risk appreciation and mitigation ▪ Structured trade finance; exercising control ▪ Understanding and Constructing a trade cycle timeline to evaluate type, amount and duration of trade finance ▪ Appreciate why structured trade finance is an alternative to traditional lending assessment ▪ Understand the key aspects and structuring techniques of receivables finance ▪ Structure a self-liquidating trade finance facility ▪ Appreciate the financing structures and risk management in structured commodity finance ▪ Dependencies: performance risk and allowable dilutions ▪ Risk in Trade and Collections and New Trends © London School of Business and Finance (Last updated: 1 Feb 2021) 143 Cecil Street, GB Building #11-01, Singapore 069542 ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢ 7. ▪ ▪ 8. ▪ (65) 6580 7356 executive@lsbf.edu.sg Major Challenges faced by banks in Trade Finance- Focus on AML, KYC Identifying and managing trade risk Financial: buyer credit risk, country, and transfer risk Political risk: contract and/or payment frustration Commercial risk: debt instrument, method of payment, commercial terms, sales leverage Performance: supply chain, nature of goods, delivery, dispute Documentary: trade instrument performance, export and import clearance Legal risk: impact on ICC rules, trade products, security over goods, debt recovery Cross Border Trade Finance: Risk hedging World’s top banks’ best practices for risk management in Trade Finance Financial Crime Risks- Case Studies, Trade Finance Fraud Case studies Digital Trade Finance / Fintechs / Blockchain Feedback and Assessment Quiz Who should attend? This workshop is designed for bankers and account managers currently working in the trade finance area and sales teams looking at how to apply banking instruments into corporate finance sector. Methodologies: The course will be delivered through lectures, case studies, article analysis, discussions and debates, and video-case analysis. Certificate: Upon successful completion of the Programme, participants will be awarded a verified digital certificate by London School of Business and Finance, Executive Education. Delivery Mode: ▪ Blended learning Duration: 2-days (9 am to 6pm) Course Fees: S$1284.00* (Incl. of 7% GST) © London School of Business and Finance (Last updated: 1 Feb 2021)
