Finance of International Trade

Main Topics of Study

The International Trade

  • The law of comparative costs
  • Origins of international trade
  • The benefits of international trade
  • The structure of international trade
  • Economic, commercial and political factors
  • Countertrade
  • Trading with Eastern Europe
  • Multinational companies and direct investment
  • International organisations seeking to facilitate world trade
  • Regional organisations seeking liberalisation

Country and Buyer Risk

  • Country risk
  • Balance of payments
  • The International Monetary Fund and the World Bank
  • Political risk
  • Buyer risk
  • Credit insurance

The Quotation

  • Delivery terms
  • Calculation of the quoted export price
  • Profit margin, pricing policy and delivery terms
  • Credit terms
  • Foreign exchange pricing

Foreign Exchange

  • Convertibility of currencies
  • Quoting in currency, the exchange risk
  • Understanding rates of exchange
  • Forward exchange contracts
  • Forward exchange rates, calculating forward exchange rates
  • Closing out forward contracts
  • Pure currency options, the wider picture
  • Avoiding the spread, euro-currency markets
  • Tender to contract cover

Agreeing a Method of Payment

  • Risks associated with the country or the buyer
  • The role of the credit controller
  • Types of methods of payment, methods of remittance

INTERNATIONAL TRADE AND PAYMENTS II (0706)

Documentary Collections

  • The bill of exchange
  • Uniform rules for collection

Documentary Credits – Obtaining the Credit

  • The definition of a letter of credit
  • Opening a documentary credit
  • The main categories of documentary credits, types of documentary credit

Documentary Credits – Securing Payment

  • Examination of a credit on receipt, amending letters of credit
  • The doctrine of strict compliance
  • Discrepancies in presentations, the pre-presentation examination
  • Action in the event of discrepancies

Banker’s Guarantees (Bonds) and Indemnities

  • Guarantees issued by local banks
  • The exporter’s liability to the bank
  • Indemnities securing the release of goods
  • Bank guarantees in support of loan or overdraft facilities
  • Custom clearance guarantees

Finance for International Trade

  • Bank finance to establish export markets – overdrafts and loans
  • Bank finance from contract to payment – overdrafts and loans
  • Credit insurance cover, bills of exchange
  • Forfeiting, factoring
  • Other sources of finance, finance for imports

Other Trading Methods

  • Consignment trading
  • Joint ventures overseas
  • Pick-a-back schemes and group selling
  • Royalty agreements and licensing