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  • Understanding Letters of Credit : Effective Management on How to Apply and Negotiate

Overview

This workshop enables participants to effectively manage letters of credit in international trade transactions. The Letter of Credit is an indispensable financing instrument used in international trade transactions. The benefit of using a letter of credit is that it provides a conditional guarantee of payment from a bank under the importer’s (applicant) instruction to the exporter (beneficiary) if the terms and conditions of the documentary credit are complied with.

Unfortunately, misinterpretation or misunderstanding of the terms and conditions may result in non-compliance and this leads to increased costs for all parties, loss of goodwill, delayed payment, and possible default.

Knowing how to apply, reading and negotiation of letters of credit and strict compliance with letters of credit requirements to help reduce or prevent costly discrepancies.

Event Detail

  • Overview
  • Overview of international trade
  • Seller and buyer objective
  • Methods of financing international trade
  • Risk triangle overview: key risk considerations for importer and exporter
  • Cash-in-advance
  • Letters of Credit
  • Documentary collection
  • Documents against payment (DP)
  • Documents against acceptance (DA)
  • Open account
  • Understanding shipping terms in relation to letters of credit
  • EXW, FCA, CPT, CIP, DAP, DPU, DDP, FAS, FOB, CFR, CIF
  • What is a letter of credit
  • Definition
  • What is the UCP (Uniform Customs and Practice for Documentary Credits).
  • Parties in Letters of Credit
  • Applicant
  • Beneficiary
  • Issuing Bank
  • Advising Bank
  • How the letters of credits work and types of letters of credit
  • Issuing and advising
  • Document presentation flow
  • Irrevocable letters of credit
  • Confirmed irrevocable letters of credit
  • Silent confirmation
  • Sight letters of credit
  • Usance letters of credit
  • Opening of import letters of credit
  • Import letter of credit (working example)
  • Use the practical case studies –to fill in letter of credit application form
  • Reviewing export letter of credit
  • Export letter of credit (working example)
  • Use the practical case studies – an export letter of credit issued by The Standard Chartered Bank, London to review the letter of credit against prepared documents to discover the discrepancies
  • Documents presented under an export letter of credit
  • The responsibility of banks as to documents
  • Original documents
  • Copies and duplicates
  • Signatures
  • Type of document required under a credit
  • Factors that cause delayed payment
  • Discrepancies
  • Restricted letter of credit negotiation
  • Discrepancies (non-complying presentation) in documents
  • Letter of credit expired
  • Late shipment
  • Late presentation
  • Letter of credit amount underdrawn
  • Letter of credit amount overdrawn
  • Partial shipment effected
  • Avoiding and resolving discrepancies under an export letter of credit
  • Amend documents
  • Letter of indemnity
  • Cable issuing bank
  • Send documents to issuing bank on approval basis

Programme/Agenda

Trainer Profile

Michael Ong has more than 25 years of experience in the areas of managing export orders, import/export, shipping, logistics, distribution, warehousing, inventory control, cargo insurance and claims, negotiating freight with carriers, trader documentation, trade compliance, trade finance and supply chain management. He first started part-time teaching in 1982, delivering a course on Certificate in Practical Import and Export Documentation and Procedures. He has since conducted training for nearly 40 years and provided corporate training for companies located both locally and overseas, including Hitachi Asia, Micron Semiconductor Asia, ASM Pacific Technology Ltd. Motorola Electronics, NCS Singapore, DHL, Federal Express, Shalom International Movers Pte Ltd. REC Solar Pte Ltd. Tanaka Electronics Singapore Ltd. Mitsui Chemicals Asia Pacific, Ltd. Olympus Singapore Pte Ltd. Nissan Taiwan and P&G Indonesia. As an effectively bilingual trainer, Michael has delivered courses fluently in both English and Mandarin.

More Information and Contact Details

SGD‎950.00 (Non-Member)
SGD‎950.00 (Non-Member)