London School of Trade Finance

5 days 10-14 Jul 2017, London UK £4,995.00 + VAT* Download brochure Add to basket
5 days 11-15 Dec 2017, London UK £4,995.00 + VAT* Download brochure Add to basket

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This Euromoney training course covers all aspects of international trade and commodity finance from a practical viewpoint. Heavy emphasis is placed upon risk assessment, problem solving techniques and deal structuring, through a clear understanding of a customer’s trade cycle. Whilst each of the banking trade products are dealt with in detail, great attention is paid to the effective and appropriate use of these mechanisms in meeting the customer’s needs, with a view to generating remunerative and controllable business for the bank and the customer. The course is highly interactive and centres around the use of a variety of case studies, many of which are based upon actual files

How this course will assist you

By attending this interactive and highly practical five day training course you will:

  • Know when and how to use trade finance effectively
  • Appreciate the importance of the commercial contract, Incoterms® and trade documentation
  • Identify trade risk and how this can be mitigated
  • Construct a trade cycle time line to evaluate type, amount and duration of trade finance
  • List the methods of payment, their use, risks to the buyer, seller and the financier
  • Identify when and how trade finance products should be used
  • Describe the risks, benefits and legal aspects of each of the trade finance products
  • Understand the key aspects and structuring techniques of receivables finance
  • Describe the key supply chain finance solutions and when they should be used
  • Be able to apply credit enhancement techniques, ECA support and evaluate credit insurance
  • Appreciate the operation and risk considerations of on demand bonds and standby letters of credit
  • Identify client needs and to satisfy these through the use of trade finance
  • Appreciate and promote the benefits of trade finance
  • Gather information to thoroughly assess and evaluate a trade proposition
  • Structure a trade finance facility to mitigate risk, to follow the goods and the money and to get the deal approved
  • Explain why trade finance is an alternative to balance sheet lending assessment
  • Understanding the regulatory developments in trade finance
  • Describe the structures, products and risk management in commodity trade finance
  • Formulate a customer winning proposition
  • Apply AML, sanctions and fraud based risk assessment techniques

Who should attend

  • Trade, export and commodity finance executives
  • Import and export managers
  • Corporate bank relationship managers
  • Staff within credit and risk management functions
  • Relationship managers within Financial Institutions
  • Trade operations personnel


We work with a series of expert instructors, please select the course location of interest to review the credentials of who will be delivering the programme.

Stephen Jones

Stephen Jones is a highly experienced trade finance practitioner with over 40 years of trade finance expertise (35 of which was gained in the corporate banking environment). He has held senior trade positions in Lloyds Bank, NatWest and RBS.

Stephen was the first in NatWest Corporate to win, structure and execute a multi-million pound limited recourse receivables finance structure for a new to bank major client. The structure used a syndicate of private insurers to transfer buyer and political risk. This resulted in the successful provision of 3 years trade credit to a buyer in Africa and off balance sheet receivables finance to the exporter

During his time as Regional Head of International Trade, Stephen overviewed and structured his team’s trade finance submissions to the credit department achieving a 97% credit approval success rate over a 4 year period

Stephen continues to work as a trade finance practitioner and consultant advisor handling trade transactions and letters of credit thus enabling him to deliver training material relevant to today’s market



Central London Hotel Venue

All courses are held at four or five star venues in Central London, Zone 1. We strive to provide you with a training environment of the highest quality, to ensure that the whole learning experience exceeds your expectations.

Your training venue will be confirmed by one of our course administrators approximately 3-4 weeks before the course start date.

Related Courses



Do you have five or more people interested in attending this course? Do you want to tailor it to meet your company's exact requirements? If you'd like to do either of these, we can bring this course to your company's office. You could even save up to 50% on the cost of sending delegates to a public course.

To find out more about running this course in-house:

Our Tailored Learning Offering

If you want to run this course at a location convenient to you or if you want a completely customised learning solution, we can help.

We produce learning solutions that are completely unique to your business. We'll guide you through the whole process, from the initial consultancy to evaluating the success of the full learning experience. Our learning specialists ensure you get the maximum return on your training investment.


We can offer any of our public courses delivered at your office or we can devise completely tailored solutions:

Read more about our offering or complete a call back request to speak to a learning specialist.



Day 1

Trade finance – its essential role in trade and revenue growth

  • The conflicting requirements of seller and buyer
  • The importance and implications of trade credit
     - Need for credit 
     - Credit risk exposure 
     - Liquidity risk
  • Working capital optimisation:
     - Cash conversion cycle
     - Identifying the funding gap
     - Importance of DSO and DPO ratios
  • The essential role of trade finance:
     - Benefits to corporate and bank

Exercise: calculation of DSO & DPO ratios and assessment

Incoterms® rules 2010

  • Their relevance and importance to trade finance
  • Examination of the most commonly used Incoterms®
  • Importance of Incoterms® from a trade financing perspective

Exercise: the delegates will be asked to evaluate the needs of the seller, buyer and financier in a case study and list the Incoterms® rules in order of preference from a control and risk mitigation perspective

Commercial contracts

  • Key aspects of the commercial contract:
     - Its importance to the financier

Case study:  examination of a commercial contract and identification of areas of risk for the seller and financier and the required amendments to mitigate risk

Trade and credit risk evaluation

  • 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, control of goods, debt recovery
     - Regulatory compliance risk; AML, CFT, sanctions and fraud

Methods of payment

  • The payment “risk ladder”; key risk considerations for importer and exporter

Exercise: the delegates will be asked to assume the roles of buyer and seller in order to determine and to negotiate key commercial aspects of a trade transaction in order to mitigate risk

Documentary collections

  • What a collection is:
     - Description
  • Bank responsibility: 
     - Compliance with instructions 
     - No undertaking to honour or pay (unless bank aval)
     - Document disclaimer; numerical count only
  • Parties
  • Types
     - Documents against payment (DP/CAD)
     - Documents against acceptance (DA)
  • Operation
  • Collection schedule of instruction (example)
  • Risk and control features
  • Protest
  • When collections should be used
  • Financing; advance against collections
  • ICC URC 522 rules; appreciation
  • Advantages and disadvantages

Day  2

Bank Aval

  • What avalisation is and when it should be used
  • Risk and benefit features
     - Seller
     - Buyer
    - Avalising bank
    - Financing bank
  • Financing opportunities

Case study: consideration of the risk aspects to both seller and financier of an advance against collections facility compared with a bank overdraft

Documentary letters of credit

  • What a letter of credit is:
     - Description
  • Key aspects:
     - Bank liability
     - Irrevocable
     - Independence
     - Conditional undertaking to pay
     - Banks deal only in documents ‘on their face’: 
            Document disclaimer
  • Parties
  • Structure:
     - Sight and term
     - Availability by:
         Sight payment 
         Deferred payment
     - Expiry date and place
     - Documentary presentation period
     - Bank to bank reimbursement

Exercise: calculation of the letter of credit facility requirement for an importer

  • Confirmation:
     - Unconfirmed credits; risk implications to the beneficiary
     - Confirming bank liability:
           Without recourse financing
           Documentary risk
     - Silent confirmation 
     - Operation and terms of a ‘commitment to negotiate’
  • Letter of credit process
  • Letter of credit example
  • Amendments;
     - Acceptance and rejection
  • Risk appreciation: structuring the letter of credit to protect the:
     - Applicant
     - Issuing bank
     - Beneficiary

Exercise: examination of an import letter of credit application form and identification of technical issues and whether the application complies with the terms of credit sanction

  • Importance of documentation: standard for examination
     - Complying presentation:
           Obligation to honour/pay:
           Exceptions to the payment principle
     - Discrepancy waiver:
           Applicant discrepancy waiver
           Applicant discrepancy rejection
           Issuing bank discrepancy waiver rejection
     - Discrepant presentation; risk implications to the:
          Confirming bank
          Negotiating bank
  • Financing: 
     -  Pre-shipment finance
     - Discount/negotiation (example)
           With and without recourse 
     - Refinancing
     - Usance payable at sight:
           Maximising issuing bank revenue
  • When letters of credit should be used
  • ICC UCP 600, ISBP 745, URR 725 rules; appreciation
  • Letters of credit; advantages and disadvantages

Other forms of letters of credit

  • Operation, risk appreciation and use of:
    - Transferable letters of credit

Case study: examination of a request to transfer a letter of credit and identification of changes which are allowed under UCP 600

            - Back to back letters of credit
            - Revolving letters of credit

Day 3

Bank payment obligation (BPO)

  • An introduction to the bank payment obligation:
     - What a BPO is
     - Why the BPO was created; perceived market need and drivers
  • Key aspects:
     - Bank to bank instrument
     - Conditional undertaking to pay
     - Establishing the baseline
     - Data matching; the Transaction Matching Application “TMA”
  • Operation and parties
  • ICC URBPO rules; appreciation and limitations
  • Differences between the BPO and a letter of credit 

 Standby credits

  •  What a standby credit is
  •  The operation of standby credits
  •  Commercial standby letter of credit (working example)
  •  Structuring standby credits; risk appreciation and mitigation
  •  The use of UCP 600 and ISP 98
  •  How a standby credit differs from a documentary credit and letter of guarantee

 Case study: assessment of the risk profile of a client request for a standby letter of credit in respect of the purchase of pre-sold goods. Construction of the trade cycle timelines, and formulation of an import and export trade financing structure to mitigate risk for the bank and distributor and calculation of the facility requirement

Bonds & guarantees

  • What on demand bank guarantees are
  • Key aspects:
     - Irrevocable
     - Independent
     - Unconditional undertaking to pay
           Exceptions to the payment principle
     - Banks deal in documents only
     - Ease of claim (beneficiary claim documentation)
  • Direct guarantees; operation and parties
  • Indirect guarantees; operation and parties:
     - Nature, role and risk implications of the counter-guarantee (example)
  • Types; Bid, performance, advance payment, payment, letter of indemnity
  • Text wordings (examples)
     - Bank’s own standard wording
     - Private text (and requirement for approval)
  • Key clauses; guarantee text construction
  • Claim demand:
     - Demand requirements:
          Claim demand statement 
     - Separateness of each demand
     - Period for examination
  • Risk appreciation: 
     - Unjustified claim (unfair calling)
     - Fair calling (political)
     - Extend or pay notice
     - Foreign laws and usage
     - Cancellation 
  • Risk management; structuring guarantees: 
     - Operative clauses
     - Variation in amount
  • URDG 758; appreciation and use

 Case study:  consideration of a request to issue an advance payment guarantee, identification of the risks and formulation of a proposal to mitigate risk exposure


  • What forfaiting is and when it is used
  • Description, parties and operation
  • Without recourse finance:
     - Events of recourse 
  •  Primary and secondary purchase
  • Risk appreciation and due diligence
  • ICC URF 800; appreciation

Case study: consideration of a request to purchase an avalised bill of exchange and identification of the risk features and further information required to assess the proposition

Day  4

Structured trade finance; exercising control

  • The self-liquidating facility; primary source of repayment
  • When and why deal structuring should be used:
     - Requirement to transfer the primary source of repayment away from the borrower
  • Exercising control; ‘follow the goods, documentation and the money’
  • Facility structuring; key controls:
     - Linkage of payment and/or finance to trade documentation
     - Use and application of finance
     - Establishing an identifiable and reliable source of repayment:
           Credit quality
           Nature of the debt instrument
           Dependencies; performance risk and allowable dilutions
           Controlling the source of repayment; ring fencing, ownership and capture
  • Structuring each stage of the trade cycle: controlling the nature of risk exposure
  • Funding alignment; trade loans linked to the trade cycle:
     - Use of labelled/descriptive trade loans
     - Managing risk exposure aligned to facility sub-limits;
           Drawn down documentation
           Duration; identifiable date set for repayment aligned to the trade cycle
  • Reality of title and control; liquidation of goods

Proposition assessment; gathering key information

  • Key questions to identify and evaluate transactional risk:
     - Trade proposition evaluation checklist (delegate pack)
  • Understanding and evaluating the trade cycle:
     - Key stages; risk profile of each
     - Plotting the time flow of goods, documentation and money
     - Identification of the funding gap
     - Determining the right form of finance
     - Calculating the facility quantum and period 

Exercise: identification of the funding gap and calculation of the facility requirement 

 Short term credit insurance

  • What credit insurance is and when it should be used
  • Working with and evaluating a credit insurance policy:
     - Assessing the extent of cover
     - Financier endorsement; joint insured Vs loss payee
  • Risk appreciation; adherence to policy terms and conditions

Case study:
identification of areas of risk from a seller’s and financier’s perspective in respect of a schedule of credit insurance

Receivables finance

  • Financing open account transactions:
     - What receivables finance is and when it is used
  • Accelerating the receivable; improving the DSO ratio
  • Nature of debt and implications for finance:
     - Invoice (example):
         Assignment of debt
     - Bill of exchange and promissory note (examples)
  • Proof of delivery (relevance of Incoterms® rule)
  • Disclosed and undisclosed facilities:
     - Risk implications
  • Recourse and re-purchase events
  • Risk assessment;
     - Seller:
          Ability to perform
         ‘Going concern status’ 
     - Debtor;
           Ability to pay and transfer risk
          Willingness to pay
          Nature of goods; specification and quality
          Timeliness of delivery
          Post-delivery performance obligations
     - Trade credit term
     - Collectability of debt; legal right to recovery
  • Prepayment; debt purchase at a discount to face value:
     - Determining the amount to finance (prepay); dilutions and retentions
  • Types of receivables finance:
     - Specific debt purchase:
     - Factoring
          Difference between factoring and confidential invoice discounting
  • The use of invoice finance and factoring in trade finance

Case study: assessment of the risk profile and structuring of an insured receivables finance solution for the sale of vehicles to a buyer in Africa on three years trade credit

Pre-shipment finance (supplier led)

  • Description and operation
  • Risk appreciation and structuring:
     - Identifiable and reliable transactional source of repayment
     - Importance of performance risk
     - Trade loans; aligned to the trade cycle

Case study: evaluation of a proposition for the provision of pre-shipment finance against an export letter of credit. Identification of risk issues with the letter of credit and proposal of a solution

Day  5

Approved trade payables finance (buyer led)

  • Description and operation
     - Risk appreciation

Export Credit Agency support (ECA)

  • The role of an ECA
  • Financing and mitigating risk with ECA support:
     - Credit insurance; commercial and political risk
     - Loan guarantee to lenders
     - Direct support/lending (in qualifying buyer credit transactions) 
  •  Parties
  • Eligibility for ECA support; regulations and criteria
  • Types of ECA support; description, parties and operation:
     - Supplier credit
     - Buyer credit
     - Lines of credit; general purpose and project specific 
     - Partial guarantees to lenders
     - Bond support
     - Letter of credit confirmation support 
     - Credit insurance cover

Commodities trade financing

  • What structured commodity finance is and when it should be used
     - Using structured commodity finance to look beyond the balance sheet 
  • Typical commodities
  • An appreciation of the key risk characteristics of commodity financing:
     - Inherent risk characteristics of the commodity to be financed
     - Market risk
     - Transactional risk
     - Control of the goods and receivable throughout the commodity trade cycle
           Source of repayment; identifiable and reliable?
  • Financing the commodity trader:
          Risk appreciation, evaluation and mitigation
  • Key methods of commodity financing:
     - Pre-export/pre-payment:
          Risk appreciation and mitigation

Case study: assessment of the risks of the pre-export finance of coffee crop and the structuring of a solution to mitigate risk

  • Warehouse financing:
  • Control of goods; warehouse receipt, warrant, letter of attornment:
  • Negotiable status?
  • Legal implications “lex situs” to ownership and sale
  • Financing ratio
  • Risk appreciation and mitigation
  • Role of collateral managers
  • Receivables
  • Structural enhancement:
  • Use of off shore collection accounts
  • Debt reserve and service accounts
  • Top up and acceleration provision
  • Borrowing base
  • Operation
  • Risk appreciation

Case study: identification of the risks and construction of a trade financing solution across the commodity cycle for a copper transaction

The abuse of trade finance

  • Key types of abuse
  • Why trade finance carries high compliance risk
  • An introduction to trade based money laundering:
     - Common methods

Case study: consideration of a request to issue a letter of credit which is not in the ordinary course of business of the applicant and identification of the nature of the underlying transaction

Recent developments and trends

  • Latest market trends:
     - Increasing role of open account trade in import and export financing
  • Block chain finance
  • Results of the latest ICC market survey
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