INTERNATIONAL TRADE

Course 4 Yudy Yunardy S.E., M.M.

WHO AM I ?

Fifteen years of Banking experience, six years’ experience in Trade Finance Operations background with Unsecured Loan experience, equipped with another seven years’ experience in Management Information Analyst and Dashboard Reporting. Vastly experienced in Bank Indonesia reporting (LBU, SID, LBBU, BMPK etc.)

EMPLOYMENT SUMMARY

2014 Present Indonesia Banking School

2013 2014 Deutschebank AG

2011 2012 Misys Plc

2010 2011 DBS Indonesia

2010 2010 ANZ Bank

2005 2010 RBS Bank

2004 2005 Vendor at Bank Mandiri, BCA and Circle K

1999 2004 HSBC Bank

1998 1999 MetLife Insurance

1997 1998 Demographic Institution FEUI

1996 1997 Private Investment Manager

RULES

1.Disable your comm. device2.Presence 80% minimum3.Time alloc. 08.00 – 10.30

TEXTBOOK

Koch, Timothy (2015), Bank Management, The Dryden Press

GRADING EVALUATION

1. Participation 5%2. Quiz / exercise 10%3. Assignment 15%4. Midterm 35%5. Final 35%

LAST WEEK’S EXERCISE

MT 700

SENDER: ABC BANK, MELBOURNE, AUSTRALIA

RECEIVER: IOB, MUMBAI, INDIA

:27: SEQUENCE OF TOTAL 1/1

:40A: FORM OF DOCUMENTARY CREDIT IRREVOCABLE TRANSFERABLE

:20: DOCUMENTARY CREDIT NUMBER EL20088033319

:31C: DATE OF ISSUE 150609

:40E: APPLICABLE RULES UCP LATEST VERSION

:31D: DATE AND PLACE OF EXPIRY 150105 OPENING BANKS COUNTERS

:50: APPLICANT HOT AND SPICY PTE LTD

240 YARROWEE STREET

SEBASTOPOL

VICTORIA, AUSTRALIA 3356

LAST WEEK’S EXERCISE

:59: BENEFICIARY AACHI MASALA PTY LTD

41, NORTH CAR STREET,

CHENNAI, INDIA-600007

:32B: CURRENCY CODE, AMOUNT AUD 60,000.00

:41D: AVAILABLE WITH ANY BANK BY NEGOTIATION

:42C: DRAFT AT SIGHT

:42A: DRAWEE ABC BANK, MELBOURNE, AUSTRALIA

:43P: PARTIAL SHIPMENTS NOT ALLOWED

:43T: TRANSHIPMENTS NOT ALLOWED

:44E: PORT OF LOADING ANY INDIAN PORT

:44F: PORT OF DISCHARGE ANY INDONESIAN PORT

:44C: LATEST SHIPMENT DATE 150525

LAST WEEK’S EXERCISE

:45A: DESCRIPTION OF GOODS CUTE 15 YEARS OLD GIRLS, RPG,

FLAMETHROWER, M-16, AR-15,

KALASHNIKOV AK-47,

INVOICE NO 123456.

CIF AUSTRALIA

:46A: DOCUMENTS REQUIRED

1. SIGNED COMMERCIAL INVOICE

2. 3/3 CLEAN ON BOARD BL MADE OUT TO ORDER OF ABC BANK AND MARKED FREIGHT PREPAID EVIDENCEING NOTIFY PARTY AS APPLICANT.

3. CERTIFICATE OF ORIGIN ISSUED BY LOCAL CHAMBER OF COMMERCE

PREVIOUSLY…

RULES FOR TRADE PRODUCTS

1. Uniform Customs & Practice (UCP 600)

2. International Standby Practices (ISP 98)

3. Uniform Rules for Collections (URC 522)

4. Uniform Rules for Bank-to-Bank

Reimbursements (URR 725)

5. Uniform Rules for Demand Guarantees

(URDG 758)

RULES FOR TRADITIONAL TRADE PRODUCTS

1. Article 8 and 6 (part) which

refer to revocable LC was

removed

2. Article 38 ‘Other documents’

was removed

3. Article 5 and 12 was removed

UCP 600 VS UCP 500

UCP 600

1. General Provisions

2. Liability

3. Examination

4. Documents

5. Misc Issues

6. Disclaimers

7. Transfer & Assignment

UCP 600

1. Article 1 Application of UCP

2. Article 2 Definitions

3. Article 3 Interpretations

4. Article 4 Credits v. Contracts

5. Article 5 Documents v. Goods,

Services or Performance

UCP 600 – GENERAL PROVISIONS

6. Article 6 Availability, Expiry Date and Place for

Presentation

7. Article 7 Issuing Bank Undertaking

8. Article 8 Confirming Bank Undertaking

9. Article 9 Advising of Credits and Amendments

10. Article 10 Amendments

11. Article 11 Teletransmitted and Pre-Advised

Credits and Amendments

12. Article 12 Nomination

13. Article 13 Bank-to-Bank Reimbursement

Arrangements

UCP 600 – LIABILITY

14. Article 14 Standard for Examination

of Documents

15. Article 15 Complying Presentation

16. Article 16 Discrepant Documents,

Waiver and Notice

17. Article 17 Original Documents and

Copies

UCP 600 – EXAMINATION

18. Article 18 Commercial Invoice

19. Article 19 Transport Document

Covering at Least Two Different Modes

of Transport

20. Article 20 Bill of Lading

21. Article 21 Non-Negotiable Sea Waybill

22. Article 22 Charter Party Bill of Lading

UCP 600 – DOCUMENTS

23. Article 23 Air Transport Document

24. Article 24 Road, Rail or Inland Waterway

Transport Documents

25. Article 25 Courier Receipt, Post Receipt or

Certificate of Posting

26. Article 26 "On Deck", "Shipper's Load and

Count", "Said by Shipper to Contain" and

Charges Additional to Freight

27. Article 27 Clean Transport Document

28. Article 28 Insurance Document and Coverage

UCP 600 – DOCUMENTS

29. Article 29 Extension of Expiry Date or Last

Day for Presentation

30. Article 30 Tolerance in Credit Amount,

Quantity and Unit Prices

31. Article 31 Partial Drawings or Shipments

32. Article 32 Instalment Drawings or

Shipments

33. Article 33 Hours of Presentation

UCP 600 – MISC ISSUES

34. Article 34 Disclaimer on

Effectiveness of Documents

35. Article 35 Disclaimer on Transmission

and Translation

36. Article 36 Force Majeure

37. Article 37 Disclaimer for Acts of an

Instructed Party

UCP 600 – DISCLAIMERS

38. Article 38 Transferable Credits

39. Article 39 Assignment of

Proceeds

UCP 600 – TRANSFER & ASSIGNMENT

ISP 98

1. RULE 1: GENERAL PROVISIONS

2. RULE 2: OBLIGATIONS

3. RULE 3: PRESENTATION

4. RULE 4: EXAMINATION

5. RULE 5: NOTICE, PRECLUSION, AND

DISPOSITION OF DOCUMENTS

ISP 98

6. RULE 6: TRANSFER, ASSIGNMENT, AND

TRANSFER BY OPERATION OF LAW

7. RULE 7: CANCELLATION

8. RULE 8: REIMBURSEMENT OBLIGATIONS

9. RULE 9: TIMING

10. RULE 10: SYNDICATION/PARTICIPATION

ISP 98

URC 522

A. General Provisions and Definitions

B. Form and structure of collections

C. Form of presentation

D. Liabilities and responsibilities

E. Payment

F. Interest charges and expenses

G. Other provision

URC 522

1. Applications of URC 522

2. Definition of collection

3. Parties to a collection

GENERAL PROVISIONS AND DEFINITIONS

4. Collection instruction

FORM AND STRUCTURE OF COLLECTIONS

5. Presentation

6. Sight/Acceptance

7. Release of commercial

documents

8. Creation of documents

FORM OF PRESENTATION

9. Good faith and reasonable care

10. Documents vs goods/services/ performances

11. Disclaimer for acts of an instructed party

12. Disclaimer on documents received

13. Disclaimer on effectiveness of documents

14. Disclaimer on delays, loss in transit and

translation

15. Force majeure

LIABILITIES AND RESPONSIBILITIES

16. Payment without delay

17. Payment in local currency

18. Payment in foreign currency

19. Partial payments

PAYMENT

20. Interest

21. Charges and expenses

INTEREST CHARGES AND EXPENSES

22. Acceptance

23. Promissory notes and other

instruments

24. Protest

25. Case-of-need

26. Advises

OTHER PROVISIONS

URR 725

A. General Provisions and Definitions

B. Liabilities and responsibilities

C. Form of notification of

authorisations, amendments and

claims

D. Miscellaneous provisions

URR 725

1. Applications of URR 725

2. Definitions

3. Reimbursement

authorisations versus credits

GENERAL PROVISIONS AND DEFINITIONS

4. Honour of a reimbursement

claim

5. Responsibility of the issuing

bank

LIABILITIES AND RESPONSIBILITIES

6. Issuance and receipt of a reimbursement

authorization or reimbursement amendment

7. Expiry of a Reimbursement Authorization

8. Amendment or Cancellation of Reimbursement

Authorization

9. Reimbursement undertaking

10. Standards for a Reimbursement Claim

11. Processing a Reimbursement Claim

12. Duplications of a Reimbursement Authorization

FORM OF NOTIFICATION OF AUTHORISATIONS, AMENDMENTS AND

CLAIMS

13. Foreign Laws and Usages

14. Disclaimer on the Transmission of

Messages

15. Force Majeure

16. Charges

17. Interest Claims/Loss of Value

MISCELLANEOUS PROVISIONS

IMPORT LC PAYMENT MECHANISM

TRADE CYCLE - SIGHT

ISS.BANK

IMPORTER

ADV.BANK

EXPORTER

S C

4. Goods

1. Apply

LC

9. Uang

10. Docs

7. Uang

2. Issued LC

6. Docs

8. Uang

5. Docs

3. A

dvis

e L

C

UCP 600 Article 7 Issuing bank

undertaking

ISSUANCE LC

1. UCP 600 Article 9 Advising of

Credits and Amendments

2. UCP 600 Article 10

Amendments

AMENDMENT LC

TRADE CYCLE - AMENDMENT

ISS.BANK

IMPORTER

ADV.BANK

EXPORTER

S C

9. Goods

1. Apply

LC 1

4. U

ang

15

. Docs

12. Uang

2. Issued LC

11. Docs

13

. U

ang

10

. D

ocs

3. A

dvis

e L

C

4. R

eq A

md

5. Req Amd

6. Apply

Am

d

7. Issued Amd

8. A

dvis

e A

md

UCP 600 Article 16 Discrepant

Documents, Waiver and Notice

DISCREPANT DOCUMENTS

1. In UCP 600 there is no major

or minor discrepancies

2. Strike through

3. Correction

4. Typo

DISCREPANT DOCUMENTS

1. Latest delivery date (at BL or

AWB)

2. LC Expiration date

3. Latest presentation date

(UCP 600 Art.29)

DISCREPANT DATES

A document that allows a customer

to take possession of shipped goods

before the shipping company

receives the bill of lading,

indemnifying the shipping company

from any loss in case the customer

fails to pay

SHIPPING GUARANTEE

1. Will require cash margin

and/or

2. Promissory note

SHIPPING GUARANTEE

1. Reduction of capital tied up. Pick up and resell

goods in advance with bank credit in order to

speed up circulation of capital and reduce

capital tied up.

2. Grasp market opportunities. It will assist

importers in obtaining documents of title to

goods, picking up and reselling goods in case

of arrival of goods prior to documents.

3. Less financial expense. Importers can pick up

goods in time to avoid demurrage charge.

SHIPPING GUARANTEE BENEFITS

FEES AND CHARGES

FEES AND CHARGES