Letters Of Credit (LC)

Introduction

Every business entity needs financing either from internal or external sources. Even though a company is self-financing today, in the near future it may need to expand its manufacturing or sales activities due to market expansion, diversification of products, competition, globalization, in order to meet the fast changing demand, fast changing technology and Research & Development.

In order to achieve these objectives a company obviously needs additional resources and financing from the bank, so as to be able to withstand and sail through the cyclical nature of the economy, and also to excel in today’s competitive business environment.

There are financial institutions and finance companies which are willing to finance for such purpose, provided businessmen know what type and how much banking facilities are needed.

The knowledge on banking facilities such as Letter of Credit and other trade finance facilities and its required quantum, the risk and fraud occurrence in domestic as well as international trade, and the measures taken to prevent such occurrence, form an integral part of a successful business entity.

How Will You Benefit

Upon completion of this programme, the participants will be able to :

• Understand the various types of Letters of Credit (LC) as follows:
  • Normal Irrevocable LC
  • Confirmed LC
  • Red Clause LC
  • Revolving LC
  • Transferable LC
  • Back-to-Back LC
  • Standby LC
  • Assignment of Proceeds
• Complete the application form for Letter of Credit from the bank.
• Identify practical examples of various products traded, appropriate to the respective Letters of Credit.
• Compile various export documents stipulated in the Letter of Credit.
• Identify the common discrepancies in export/ shipping documents.
• Resort to other alternatives on discrepant documents.
• Understand the 11 Incoterms – namely, the unification of international interpretation of trade terms to assist traders in dealing with importation or exportation of goods, the risk involved and to determine at what point the seller and the buyer fulfill their obligations.
• Identify fraud that occurs in international trade, its causes and preventive measures.
• Understand Articles of UCP UCP600 which are relevant to importers, exporters and bankers.
• Know the checking and examination of export/shipping documents under Letter of Credit by International Standard Banking Practice (ISBP)

Who Should Attend

This program is suitable for Financial Controllers, Account Executives, Finance Executives, personnels involved in importing, manufacturing, exporting, shipping, freight forwarding, and trading concerns.

Methodology

The programmes are conducted through interactive classroom lectures on key concepts, demonstration of procedures through visual aids, laptop & LCD projector, sample or real Letters of Credits and other shipping documents, various exercises given to participants to further understand the flow of Letters of Credit and the shipping documents, resolving problematic Letter of Credit, addressing discrepant documents and non-compliance to Letters of Credit.