New York School of Trade Finance

5 days 6-10 Nov 2017, New York United States $5,415.00 Download brochure Add to basket

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Overview

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

Instructors

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.

New York
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

Venue

New York

New York Hotel

This program takes place on a non-residential basis at a New York hotel. Non-residential course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.

As with all programmes on-site administrators are with you throughout the programme to ensure smooth administration and group interaction.

Related Courses

Inhouse

We can bring this course to your company's office.

If you simply 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. Our tailored learning solutions are designed specifically for your organisation’s needs.

We’ll be here to support you every step of the way. From the initial consultancy through to evaluating the success of the full learning experience. We'll ensure you get the maximum return on your training investment.

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Agenda

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
  • Working capital optimisation; how trade finance can improve DSO and DPO
  • An alternative to balance sheet lending
  • The relevance of financial statement analysis
  • The self-liquidating facility; primary source of repayment
  • Key benefits to the financier and corporate

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 and trade documentation

  • Key aspects of the commercial contract
  • Review of trade documents and their importance to trade finance:
    - The importance of the debt instrument; invoice, bill of exchange, promissory note
    - Control of the goods; the bill of lading
    - Other transport documents and implications for control

Case study; the delegates will examine a commercial contract and identify areas of risk for the seller and financier and the required amendments to mitigate risk

Proposition assessment; gathering key information

  • Identification of key client drivers and needs
  • Understanding the purpose of borrowing
  • Key questions to identify transactional and financial risk:
    - Basis of sales order/contract
    - Supply chain
    - Nature of goods & marketability
    - Quality risk management
    - Nature & domicile of warehoused goods
    - Mode of shipment
    - Method of payment
    - Trade credit
    - Buyer and debt instrument
  • The trade cycle; time flow of goods, money and documentation
  • Calculating the funding gap, required facility quantum and period

Documentary collections

  • Operation, structure and parties
  • What a collection is and when it should be used
  • Risk, benefit and control features
  • Documents against payment (DP, CAD)
  • Documents against acceptance (DA)
  • The schedule of instructions (working example)
  • Bank liability; document in trust facilities
  • Protest
  • An appreciation of ICC URC 522
  • Financing collections

Bank Aval

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

Case study; the delegates will consider the bank’s position where documents have been released to the buyer on a trust basis for examination

Day 2

Documentary Credits

  • Operation, structure and parties
  • The independence principle
  • Letter of credit (working example)
  • Sight, acceptance, deferred payment and negotiation
  • Unconfirmed and confirmed credits and the use of silent confirmation
  • Risk, benefit and control features
  • Issuing a letter of credit; protecting the bank’s interest

Exercise; the delegates will be required to examine an import letter of credit application form and identify technical issues and determine whether the application complies with the terms of credit sanction

  • LC documentation; its importance and implications for the trade financier
  • Documentary risk; the implications of discrepant documents
  • Financing letters of credit:
    - Pre-shipment finance
    - Discount and negotiation (with and without recourse)
    - Refinancing
    - An appreciation of UCP600, ISBP 745 & URR725

Case study; the delegates will construct the trade cycles, facility requirement and sales opportunities based upon the forecast business lines of a fabric importer, manufacturer and exporter

Other forms of letters of credit

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

Exercise; the delegates will calculate the facility requirement of a revolving letter of credit
           
             - Transferable letters of credit

Case study; the delegates will be required to examine a request to transfer a letter of credit and identify changes which are allowed under UCP 600

            - Back to back letters of credit

Guest speaker presentation; Changes and Challenges in, and Costs and Consequences of the New Regulations

  • An overview of the changing face of regulation; Basel, EU and UK
  • An analysis on the latest papers and their likely impact; capital, liquidity, accounting and governance
  • What steps will banks have to take to comply with evolving regulatory demands

Day 3

Standby credits

  • The operation of standby credits
  • Commercial standby letter of credit (working example)
  • Typical claim documentation
  • Risk appreciation
  • The use of UCP 600 and ISP 98

Bonds & guarantees

  • The use of bonds and guarantees
  • Bid, performance, advance payment and retention bonds
  • Key clauses
  • Risk appreciation
  • Legal jurisdiction and expiry date issues
  • The use of URDG 758

Case study; the delegates will assess a request from a trader for a demand guarantee facility, identify the risks, formulate a proposal to mitigate risk, minimise exposure and identify related sales opportunities in respect of the underlying transaction

Forfaiting

  • What forfaiting is and when it is used
  • The parties
  • The mechanics and operation
  • Primary and secondary purchase
  • Risk appreciation and due diligence
  • Governing rules and practice ICC URF 800

Case study; the delegates will be required to consider a request to purchase an avalised bill of exchange and identify the risk features and further information required to assess the proposition

Guest speaker presentation: Legal Aspects of Trade and Commodity Finance

  • Debt instruments; promissory notes, bills of exchange and aval
  • The independence principle; legal position regarding fraud in respect of letters of credit and demand guarantees
  • The legal effect and status of ICC rules
  • Security; pledge, trust receipts, lien, assignment and warehouse receipts

Receivables finance

  • Receivables finance; the importance of DSO
  • The nature of the receivable and implication for financing
  • The operation of with, without and limited recourse finance
  • Disclosed and undisclosed facilities
  • Documentation; debt instrument and proof of delivery
  • Debt purchase versus advance
  • Recourse and re-purchase events
  • Assignment of debts and notice to the debtor
  • Risk assessment; determining the amount to finance: dilutions and retentions

Factoring and invoice discounting

  • Financing open account transactions
  • The role of factoring companies
  • Invoice discounting versus full service factoring
  • The use of invoice finance and factoring in trade finance

Short term credit insurance

  • Assessing the extent of cover
  • Risk appreciation
  • Working with and evaluating a credit insurance policy
  • Financing with credit insurance support
  • Adherence to policy terms and conditions

Case study; the delegates will assess the risk profile and structure an insured receivables finance solution for the sale of vehicles to a buyer in Africa on three years trade credit

Day 4


Payables finance (Supply chain finance)

  • The importance of DPO and payment acceleration for settlement discount
  • What payables finance is and when it should be used
  • Types of payables finance:
    - Pre-shipment payables finance
    - Approved payables finance
    - Usance payable at sight letters of credit
  • Risk and benefit features

Case study; the delegates will evaluate a proposition for the provision of pre-shipment finance against an export letter of credit. They will be required to identify risk issues with the letter of credit and propose a solution

Trade and credit risk evaluation

  • Identifying and managing trade risk;
    - Financial; buyer credit risk, political, country and transfer risk
    - Performance, supply chain, goods, timeliness of delivery, dispute
    - Documentary; trade instrument, export & import clearance
    - Reputational risk
  • The role of financial statement analysis
  • Borrower’s attitude and mitigation of risk
  • Sales leverage; USP; strategic or price driven
  • Nature of goods; quality management, marketability and price dynamics
  • The relevance of mode of shipment and Incoterms® to goods control
  • The payment “risk ladder”; key risk considerations for importer and exporter
  • The nature of the receivable; bill of exchange, promissory note, invoice
  • Evaluation and control of the cash flow

The structured trade facility; exercising control

  • When and why deal structuring should be used
  • Determining the nature and extent of facility structuring
  • The self-liquidating facility; primary source of repayment
  • Facility structuring to mitigate risk; the use of trade instruments
  • Following the goods, documentation and money
  • Trade loans; funding aligned to the trade cycle
  • The fundamentals to facility structuring; key controls:
    -The use and application of finance
    -Linkage of payment to trade documentation
    - Maintaining control; movement of goods
    - Ring fencing, ownership and capture of the trade receivable proceeds
  • The reality of title and control; liquidation of goods

Case study; the delegates will assess the risk profile of a client request for a standby letter of credit in respect of the purchase of pre-sold goods, construct trade cycle timelines, propose an import and export trade financing structure to mitigate risk for the bank and distributor and calculate the facility requirement

Export Credit Agency support

  • The role of an ECA
  • When is an ECA used and how; financing and mitigating risk
  • Parties; exporter, overseas buyer and bank
  • Eligibility for ECA support; regulations, criteria and structure
  • 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

Day 5
Commodities trade financing

  • What structured commodity finance is and when it should be used
  • Typical commodities
  • Parties
  • The role and value of commodity exchanges

Commodity finance risk appreciation

  • Financing the commodity trader
  • Understanding the trade flows
  • Performance risk
  • Price volatility
  • Control in a warehouse;
    - Warehouse receipts
    - The value of collateral managers
  • Assessing the value of collateral and receivables; the financing ratio
  • The use of offshore accounts
  • Top up and reserve accounts

Key methods of commodity financing

  • Pre-export finance
    - The use of red and green clause letters of credit
    - Performance guarantees
  • Prepayment finance

Case study; the delegates will examine the pre-export financing issues and solution for the financing of coffee production

  • Warehouse finance
  • Tolling
  • Receivables finance

Key aspects of the financing agreement

  • Structural enhancements
  • Key clauses

Other forms of commodity finance

  • Borrowing base facilities
  • Countertrade

Case study; the delegates will be required to identify the risks and construct a trade financing solution across the commodity cycle for a copper transaction

AML, sanctions and fraud in trade finance

  • Trade based money laundering
  • Sanctions; their relevance to trade finance
  • The relationship with the correspondent bank

Regulatory expectations in trade finance

  • Risk based assessment
  • High risk transactions; the need for enhanced due diligence
  • Trade cycle appreciation – know the customer’s customer

Identification of risk

  • Common methods of trade based money laundering
  • Typologies
  • Negotiable instruments and third parties
  • Trade compliance risk zones
  • Compliance risk aspects of the key trade finance products
    - Letters of credit

Case study; the assessment of a potential money laundering cross border letter of credit transaction requiring delegates to identify key compliance risk issues and further information required to make a risk based assessment

Guest speaker presentation; Practical Measures for Identifying and Avoiding Risk for Trade Finance Bankers and Traders – An Analysis Based Upon Cases Handled by the IMB

  • Exploring how bankers and traders can identify the risks in trade finance
  • Analysing recent case studies of buyers, sellers, and banks at risk
  • Meaningful investigations into the recovery of losses
  • Practical precautions for banks and traders
    - Transferable letters of credit

Case study; the assessment of a transferable letter of credit transaction with suspicion of breaching international trade sanctions. The delegates will be required to identify any unusual features, to identify key compliance risk issues and further information required to make a risk based assessment

            - Standby letters of credit

Case study; delegates will be required to consider the course of action resulting from a suspicious claim under a standby LC and how the use of this product for money laundering can be reduced

Risk indicators

  • Warning signs of fraud
  • Red flags; money laundering
  • Sanction issue indicators

Case study; the delegates will be required to identify the risks and construct a trade financing solution across the commodity cycle for a copper transaction

Course summary and close

 

Why us


We have a combined experience of over 60 years providing learning solutions to the world’s major organisations and are privileged to have contributed to their success. We view our clients as partners and focus on understanding the needs of each organisation we work with to tailor learning solutions to specific requirements.

We are proud of our record of customer satisfaction. Here is why you should choose us to help you achieve your goals and accelerate your career:

  • Quality – our clients consistently rate our performance ‘excellent’ or ‘outstanding’. Our average overall score awarded to us by our clients is nine out of ten.
  • Track record – we have delivered training solutions for 95% of worlds’ top 100 banks and have trained over 250,000 professionals.
  • Knowledge – our 150 strong team of industry specialist trainers are world leading financial leaders and commentators, ensuring our knowledge base is second to none.
  • Reliability – if we promise it, we deliver it. We have delivered over 20,000 events both in person and online, using simultaneous translation to delegates from over 180 countries.
  • Recognition – we are accredited by the British Accreditation Council and the CPD Certification Service. In an independent review by Feefo we scored 96% on service and 95% on product