Understanding Letter Of Credit : Documentation And Procedure
Details
PROGRAMME OVERVIEW
To be successful in the trade arena and maintain the ability to perform trade business in these turbulent times, the Letter of Credit (LC) is at its most value where the seller’s risk is moved from the buyer to a reputable bank. However, a seller may still face the risk of non-payment or delay in payment under the LC when there are discrepancies in the documents and the buyer has taken delivery of the goods.
As a seller, are you aware that most discrepancies and quality disputes are the result of improper handling of the Letter of Credit’s Documentation and Procedure?
This 2-day programme provides you an insight into the proper procedures of negotiating for LC terms and more professional handling of LC documentation to reduce discrepancies in your next shipment and to increase your chance of receiving prompt payment.
OBJECTIVES
Upon completion of this workshop, participants should be able to:
- Understand key concepts of Letter of Credit
- Use Letter of Credit with confidence
- Learn proper handling procedures from sending offers to receipt of payment.
- Learn to minimize risk of document discrepancies and reduce delay in payment
- Implement internal control and procedures to minimize documentation risk.
Outline
- Perimeters of International Trade
- Risks in International Trade Transaction Flow
- International Trade Rules & Regulations governing Terms of Sale
- Factors to consider before using an LC
2. Understanding Letter of Credit
- Definition of LC
- Structure and main features of a Letter of Credit
- Role and scope of UCP600
- LC by SWIFT
- Availability of LC
- By sight
- By acceptance
- By deferred payment
- By negotiation
- By confirmation
- Credit vs contract
3. Legal relationship between parties to a Letter of Credit
- Parties to a Letter of Credit
- Issuing Bank
- Advising Bank
- Confirming Bank
- Negotiating Bank
- Reimbursement Bank
- Recourse for seller if LC is unpaid
- Risks associated with Letter of Credit
- Risks to the applicant
- Risks to the beneficiary
- Mitigating risks by the seller to minimize payment default
4. Steps in Establishing an Irrevocable LC
- Establishment of LC by applicant
- The information required in the LC Application form
- Negotiation between buyer and seller on agreed terms
- Fees and cost – who pays what
- What are basic requirements in accordance with UCP 600
- Diagrammatic process flow of LC
- From banks to the seller
- From presenting documents by seller to settlement
- Amendment to an LC
5. Presenting Documents to the Bank
- Export documents pertaining to LC
- Basic documents required – Invoice, Draft, Bill of Lading (BL), Certificate of Origin (COO), etc.
- Additional documents required by buyer and buyer’s country
- Presenting bank’s role
- Timeframe to check documents
- International Standard Banking Practice (ISBP) for acceptable discrepancies and abbreviations
- Decision to honour or dishonour presentation of documents / negotiable credit
- Discussion on examples of LC (real LC if possible) brought by participants
6. Transport Documents and Control over Goods
- Defining INCOTERMS 2010
- How parties can maintain control over the goods shipped with relevant case studies
7. How to Reduce Discrepancies in Documentation
- Highlight of relevant Articles of UCP 600
- Right Data in the Right Document
- What to Demand in Your Letter of Credit
- What to Avoid in Your Letter of Credit
- Proper Ways to Handle Your Documents
- Case study
8. How to Minimize Documentation Risk
- Create awareness of documentation risks in the organisation
- Build a checklist of rules to observe
- Implement control & procedures
- Involve the right people
Speaker/s
Nancy Ong Chen Gan,
MBA (Strathclyde, U.K.), Dip. In Banking (U.K.),
TESOL (Australia).
Nancy pursued her passion to teach through the training profession after leaving her career in banking of 30 years. Fifteen years on and she has successfully conducted workshops and trained many people in trade financing, credit management and business communication.
She has worked in management positions in branches and later at head office of OCBC Bank where she headed Treasury Operations before her retirement. Her vast knowledge and experience in banking are the keys to the success of her training and workshops. With a clear understanding of the business environment she is able to help bridge the gap in the industry of trade financial instruments and the associated financial risk for participants to gain the skills necessary to apply in their area of work. Participants are able to recognize the financial and operational risks to help them increase organizational effectiveness when using these financial instruments.
Nancy’s passion for English business writing and communication stems from her career where her job had given her many opportunities to write and speak to many levels of management in planning, presenting and decision-making. Combining her proficiency in English and a clear understanding of the business environment, she is able to impart her skills and knowledge in business communication to others who care to improve themselves for their career advancement through her training such as “The Art of Writing a Good Report”training.
Using simple and proven techniques to deliver her workshops, she has received excellent ratings from the participants.
A certified PSMB trainer, she also holds an MBA from the University of Strathclyde, United Kingdom, a Diploma in Banking from United Kingdom, and a certificate in the Teaching of English to Speakers of Other Languages (TESOL) awarded by Teach International, Australia.
Special Offer
FEE PAYABLE PER PARTICIPANT :
Normal Price : RM1,858
Early Bird (15 days before event) : RM1,748
Group Fee (>2 participants) : RM1,528
Fee includes course materials, lunch, 2 tea breaks per day and Certificate of Attendance (upon completion of the training).
Download Registration Form HERE and sent it to us by
Fax : +603 5523 2827
Email : [email protected]
CANCELLATION / TRANSFER
Upon registering, participant(s) are considered successfully enrolled in the event. Written cancellations / transfer notice (substitution or to later dates) received :
- More than ten (10) working days before the event, a refund (less administrative charge of 15%) will be made.
- Ten (10) working days or less before the event, no refund will be made.
- For no show on the day of the event, full payment is required. If you cannot attend the event, you can nominate a substitute at any time without payment of an administration fee.
- A full (100%) refund may be granted if the course is cancelled by Wanfah Prosper PLT (WFP). WFP reserves the right to postpone or cancel the event and / or change facilitator at any time should circumstances beyond its control arises. WFP also reserve the right to make alternative arrangements without prior notice should it be necessary to do so.
Please make cheque payable / direct credit to :WANFAH PROSPER PLT
Accounts Number : 3812930508
Bank : Public Bank Berhad
For In House Training, please contact our office at +603-55231819 or email to [email protected] to request for a quotation.
Our Mission is to Help Organization In Developing Human Capital and Grow Their Bottom Line.
We have a pool of very experienced trainers with decades of experience in their respective fields of interest. It is the aspiration of Wanfah Prosper PLT that such experiences will be passed on to the participants in the course of the training programmes to be conducted by Wanfah Prosper PLT.
We specialized in the following areas :
- Finance and Accounting
- Taxation
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