FITT International Trade Competency Framework
DRAFT
Keep the following in mind as you review the document.
Ask yourself, do you need this skill to conduct International Trade? If the answer is no, please tell us.
If it does apply, are the performance and knowledge statements: Accurate? Complete? Realistic? Meaningful? Logical in Structure?
Finally, does anything need to change, or is anything missing?
Please return the reviewed document to Calum MacDonald, cmacdonald@cthrc.ca.
This document is in a formative stage and intended for consultation purposes; it is not complete and may contain inaccuracies. The document is not intended
for general distribution.
REFERENCE NUMBER:
CATEGORY:
BUSINESS DISPUTES
SKILL:
Resolve Business Disputes
SUBSKILL:
4. Select option for resolving investment dispute with a foreign
government
PURPOSE:
An enterprise involved in international trade may need to protect their investment from
violations of investment treaties, such as expropriation, by foreign governments. Enterprises
need to review treaty agreements to determine if there is any value in pursuing this form of
dispute.
PERFORMANCE:
Competent practitioners must:
P1. Research options to use bilateral investment treaty (BIT), WTO or other regional treaties to
secure rights as investor with foreign government <can WTO and other regional treaties
provide investment protection?>
P2. Consult with own government to pursue informal way to resolve dispute, e.g. discuss issue
with Trade Commissioner for that country
P3. Determine potential costs to pursue dispute in relation to value of investment
P4. Determine most prudent course of action for enterprise:
 Write off investment as a loss
 Use dispute resolution process as provided by treaty, e.g. apply to International Center
for the Settlement of Investment Disputes (ICSID)
KNOWLEDGE
Competent practitioners must know:
K1. Letters of credit and documentary collection processes and contents
K2. Costs of resolution options
K3. Applicable dispute resolution process based on situation, e.g., contract terms and
negotiations, bilateral and multilateral agreements
K4. Terms of sales/purchase agreement
K5. Arbitration processes
K6. Other methods of dispute resolution
K7. INCO terms
K8. Different rules and procedures, and conventions that apply to arbitration processes, e.g.
(ICSID) Convention on the Settlement of Investment Disputes between States and Nationals
of Other States, and Dispute Settlement procedures, New York Convention
VARIABLES, RANGE OF CONTEXT
Competent practitioners may need to work with the following variables:
V1.
V2.
V3.
V4.
Political and economic stability of foreign state
Type of transactions
Value of investment
Dispute process stipulated in treaties
GLOSSARY:
Clean payment: all shipping documents, including title documents are handled directly between
the trading partners. The role of banks is limited to clearing amounts as required. Clean
payment method offers a relatively cheap and uncomplicated method of payment for both
importers and exporters
Payment Collection of Bills in International Trade: Uniform Rules for Collections” is published
by International Chamber of Commerce (ICC) under the document number 522 (URC522) and is
followed by more than 90% of the world's banks. In this method of payment the exporter
entrusts the handling of commercial and often financial documents to banks and gives the banks
necessary instructions concerning the release of these documents to the Importer. It is
considered to be one of the cost effective methods of evidencing a transaction for buyers,
where documents are manipulated via the banking system.
Documents Against Payment (DOP): documents are released to the importer only when the
payment has been made
Documents Against Acceptance (DOA): documents are released to the importer only against
acceptance of a draft
Draft: a written payment order from one party (the exporter) to another (the financial
institution) to pay a stated sum to a third party (the importer) either immediately or on or
before a specified date. When presented with shipping and/or title documents, it is called a
documentary draft; without them a clean draft. Also called a draft bill of exchange
Letters of Credit (L/C), Documentary Credit (DC), Documentary Letter of Credit (DLC): a
document written by the importer’s bank known as the issuing bank on behalf of its customer,
the importer (applicant), promising to effect payment in favour of the exporter (beneficiary) up
to a stated sum of money, within a prescribed time limit and against stipulated documents.
Under the autonomy principle and the doctrine of strict compliance, the bank must pay the
beneficiary if the documents presented are strictly in compliance with the terms of the sales
contract and the letter of credit
INCO terms: International Commercial Terms; internationally recognized trade terms that are
referenced in contracting and trade finance and contractual disputes; stipulate terms of
agreement for transport and payment
Trust/Open Accounts: the importer is trusted to pay the exporter after receipt of goods. The
exporter assumes all the risks while the importer get the advantage over the delay to use
company's cash resources and is also not responsible for the risk associated with the goods
Bilateral investment treaties: trade agreements (often free trade agreements) between two
countries, respectively, to more freely achieve the desired flow of goods
Multilateral treaties: trade agreements involving more than two countries at one time to more
freely achieve the desired flow of goods
ICSID Convention on Settlement of Investment Disputes between States and National of other
States:
WTO: an international organization dealing with the global rules of trade between nations. Its
main function is to ensure that trade flows as smoothly, predictably, and freely as possible.
Trade Commissioner: a representative of the Canadian Trade Commissioner Service (TCS) who
provides on-the-ground intelligence and practical advice on foreign markets to help enterprises
considering or involved in international foreign trade
New York Convention: an agreement adopted by UNCITRAL that requires that arbitral awards in
international commercial and trade disputes be recognized and enforced by the courts of the
142 signatories to the convention
SOURCES
1. TD Bank, Crash Course ppt presentation on Trade finance, TD bank
2.
3.
4.
5.
6.
7.
8.
https://www.tdsecurities.com/tds/pdfs/GTFCrashCourse.ppt?language...
What is Trade Finance? Trade Finance epublication
http://www.tradefinancemagazine.com/AboutUs/Stub/WhatIsTradeFinance.html
Powerpoint on Trade Finance
www.swlearning.com/blaw/dimatteo/lawintl1e/powerpoint/ch11.ppt
FITT. FITTskills: International Trade Finance, Chapter 3, Trade Finance Instruments and
Service – the tools and how to use them 6th Edition. FITT/Gilmore. VitalBook file.
FITT. FITTskills: Legal Aspects of International Trade, Chapter 2 Global Trade Agreements
and Regional Economic Blocks Understanding treaties that enhance international trade;
Chapter 11 Resolution of Disputes Dealing with contractual difficulties and
complications,6th Edition. FITT/Gilmore. VitalBook file.
Investorwords, online business dictionary,
http://www.investorwords.com/
Business Dictionary, web based business dictionary,
http://www.businessdictionary.com/
Investopedia, web based business dictionary,
http://www.investopedia.com/dictionary/