Objectives

On completion of the course the participants will understand the International Trade environment, learn the roles of the various participants and most importantly acquire the skills of evaluating the risks of international trade finance and the methods of mitigation these risks resulting in better decisions and control of international trade financing.v

Course Contents

Module 1 – The international trade environment 

• An overview of international trade which includes the rationale for a country to engage in international trade
• The working of the Theory of Comparative Advantages and Absolute Advantage
• The economic indicators which a country has to monitor when engaged in international trade
• The Central Bank Sri Lanka in the management and monitoring of international trade operations of Sri Lanka
• The role of international monetary institutions and other allied organizations in assisting international trade activities

Module 2 – The mechanics of international trade operations

• The various documents that is required in international trade operations and their processes
• Payment Methods in International Trade
• ICC rules for Documentary Collections URC 522, The roles of various parties to a Documentary Collection, Avalization etc.
• Documentary Credits- Definition, parties involved, DC Cycle etc.
• Special Types of Documentary Credits and identify the different types of features and data that is required to appear in various types of Documentary Credit
• ICC rules for Documentary Credits UCP 600
• Assignment of Proceeds
• ICC rules for Bank-to-Bank Reimbursement under Documentary Credits URR 725
• ICC Rules for Standby Documentary Credits ISP 98
• The role of the foreign exchange market in international trade and the theory for fixing parity rates for one currency against another
• The technique for fixing current prices and future prices of foreign currency required by importers and exporters
• The foreign exchange market for forward rates and the interest differential theory
• Calculation of Forward Exchange Rates in International Trade ( Case Studies)
• Various Financing options in International Trade including facilities for Importers and Exporters, Invoice Discounting, Factoring and Forfeiting.
• Facility Structuring and Case Studies

Module 3 – The supply chain in international trade and the role of the various participants 

• Importance of Incoterms when trading internationally
• ICC rules Incoterms 2020
• Supply Chain Management – The supply chain in international trade and the role of the carrier in international trade operations
• Various Transport documents seen in International Trade, and understand the key examination criteria for transport documents.
• The role of the underwriter in international trade operations
• Understand the key examination criteria for Insurance documents, and application of UCP 600 article 28
• The importance of insurance both cargo and hull
• The role of other support services in international trade operations

Module 4 – The management of risk in international trade finance 

• The risks and uncertainties of international trade as opposed to domestic trade
• Case Studies on Documentary Collections & Documentary Credits
• Bank Guarantees in international trade
• The specter of fraud affecting international trade operations
• The purpose of indemnities and guarantees in international trade operations
• Discussion on ICC Rules for Bank Guarantees URDG 758
• Other supplementary services provided by banks to facilitate international trade
• The incentives offered by the State to encourage international trade
• Entrepot Trade

Module 5 – Workshop on international trade operations

• Discussion on International Standard Banking Practices (ISBP) for examination of documents.
• Workshop on examination of documents