Certified International Trade Finance Specialist (CITFS^TM)

Certified International Trade Finance Specialist (CITFS^TM)

International trade offers large opportunities for buyers and sellers across the globe to multiply their businesses. Most of the parties to international trade depend upon external sources of finance to fund such business opportunities. In fact, trade finance plays a very important and pivotal role and has become a determining factor in international trade. International players have an advantage of having varieties of international trade finance products to meet their needs. Understanding of opportunities, related risks, costs and process of international trade financing is, therefore of utmost importance.  This course is designed to enable the participants to gain a thorough understanding of international trade finance products, processes, practices and related regulation.

This course will enable you to understand international trade finance and enrich your knowledge about various related products and services. The course is focused on the needs of professionals wishing to acquire knowledge of international trade finance in order to enable them to provide technological solutions to banking Industry.

What will you learn?

When you complete this course, you will have understanding of :

• Domestic and international trade environment
• The roles and responsibilities of parties involved in international trade
• The risks and complexities in international trade
• Significant documents in international trade transactions
• Understanding of International Commercial Terms (Incoterms)
• Correspondent banking, FX transactions
• International trade finance products including the processes involved and purpose / scenario in which they are used
• Use of SWIFT for trade finance products
• Regulations involved in trade finance (Examples: ICC UCPDC 600, eUCP, ICC URDG, ICC URC, ICC Uniform Rules for Bank to Bank Reimbursement)

Course Content:

Module I: Introduction to Trade

• What is trade and trade finance?
• Trade transaction life cycle
  • From purchase order to payment
  • Parties involved in a trade finance transaction
  • International commercial terms 2010 (Incoterms)
  • Roles and responsibilities of buyers and sellers

Module II: Significant Documents in International Trade Transactions

• Documents prepared by buyer / seller
  • Purchase order / Contract
  • Packing list
  • Commercial invoice
  • Bill of exchange (including its clauses, types and process of operation)
• Documents issued by third parties
  • Bill of lading and its types /airway bill /lorry receipt / railway receipt
  • Certificate of origin
  • Certificate of quality/inspection
• Documents under Customs regulations
  • Bill of Entry
  • Bill of Export / Shipping Bill

Module III: Risks Involved in International Trade Transactions

• Types of risks involved in trade
  • Credit Risk
  • Liquidity Risk
  • Country and Political Risk
  • Operational Risk
• Typical payment scenarios and risks faced by buyer and seller
• Risk mitigation techniques

Module IV: Understanding Foreign Exchange Transactions

• Understanding foreign exchange market
• How the foreign exchange rates are determined 
• Exchange rate terminologies (cash, tom, spot, future)
• Derivatives on foreign exchange rates (forward, futures, options)
• Correspondent banking (Notro, Vostro, Loro)

Module V: International Trade Finance Products

• Functions of banks in international trade transactions
  • Finance function
  • Agency function
  • Risk management function
  • Assurance function
• Working capital / supply chain finance
• Packing credit / pre-shipment credit
• Bill related products
  • Collections
  • Purchasing
  • Discounting
• Documentary letters of credit (LC / DC)
  • Understanding LC
  • LC lifecycle
  • Parties to LC and their roles
  • Mechanism of LC (presentation, negotiation, inter-bank settlement)
  • Discrepancies, exception handling mechanisms, negotiation under reserve
  • Types of LC
• Bank Guarantees (BG)
  • Understanding BGs
  • Lifecycle of BGs
  • Types of BGs
  • Mechanism of BG operations
• Stand-by letter of credit
• Factoring and reverse factoring
• Forfeiting  

Module VI: SWIFT in Trade Finance

• Introduction to SWIFT
• SWIFT MT Message types related to trade finance
  • Collection
  • Letter of Credit
  • Bank Guarantee
• SWIFT Trade Service Utility (TSU) and Bank Payment Obligation (BPO)
• Corporate to Bank Communication Regulations, Standards, Banking Practices (Following regulations would be covered along with the relevant product / area)
• ICC Uniform Custom Practices for Documentary Credit (UCPDC 600)/eUCP
• ICC Uniform Rules for Bank-to-Bank Reimbursement under Documentary Credits (URR)
• ICC Uniform Rules for Collections (URC)
• ICC Uniform Rules for Demand Guarantees (URDG)