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Commerzbank Financial Institutions:Partnership meets expertiseDarko Trbojevic   Financial Institutions   Belgrade / Septem...
How can Commerzbank enhance your success?Darko Trbojevic Financial Institutions   Belgrade / September 2011   1
Commerzbank – the leading German commercial bank                 A strong universal bank                                  ...
7,000 bank clients, over 60 locations, one bank: Commerzbank                                                              ...
Trade Services:Expertise and experience since 1870“Made in Germany” around the globe …           Team with experience, und...
Risks in International TradeRisks                                                                     …for the Exporter   ...
Commercial Interests Importer: Ensuring receipt of goods/completion of services in due time and in agreed quality. Exporte...
Intermediation of the different positions via:                                                                          Ba...
Specific Options available in Serbia:                                                                             AOFI    ...
Payment instruments & security aspects from an exporter‘s perspective                                                     ...
The Documentary Letter of Credit: Advantages and Disadvantages                                                            ...
The Documentary Letter of Credit: Flow Chart(Credit available with the advising bank by sight payment)                    ...
The Bank Guarantee: Advantages and Disadvantages                                                          View of the Orde...
Flow chart Direct Guarantee (example: performance guarantee)                                                              ...
Legal Regulations for the Documentary Business in GermanyForeign Trade Act (Außenwirtschaftsgesetz/AWG)is the law that pro...
Darko Trbojevic                                                        Commerzbank AG                                     ...
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Darko Trbojevic

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Darko Trbojevic

  1. 1. Commerzbank Financial Institutions:Partnership meets expertiseDarko Trbojevic Financial Institutions Belgrade / September 2011
  2. 2. How can Commerzbank enhance your success?Darko Trbojevic Financial Institutions Belgrade / September 2011 1
  3. 3. Commerzbank – the leading German commercial bank A strong universal bank A strong brand Germany’s leading wholesale bank leveraging its The brand mirrors the principles the new successful franchise Commerzbank abides by, partnership and performance No 1 retail bank in Germany The logo which symbolizes how the merger of One of Europe’s largest FI departments two traditional brands has given rise to a new, One of the world’s largest networks exciting and innovative institution of representative offices The brand promise: “Achieving more together” Client-centred investment bank with a European footprintDarko Trbojevic Financial Institutions Belgrade / September 2011 2
  4. 4. 7,000 bank clients, over 60 locations, one bank: Commerzbank Riga Moscow Minsk Dublin Amsterdam Warsaw London Hradec Králové Brussels Prague Ostrava Kiev Luxemburg Plzen Brno Košice Paris Vienna Bratislava Zurich Budapest Zagreb Milan Bucharest Belgrade Barcelona Istanbul Madrid Novosibirsk Almaty New York Baku Tashkent Beijing Ashgabat Seoul Tianjin Tokyo Tripoli Beirut Shanghai Cairo Dubai Hong Kong Taipei Mumbai Bangkok Caracas Addis Ababa Ho Chi Minh City Panama City Lagos Kuala Lumpur Singapore Jakarta São Paulo Johannesburg Commerzbank worldwide: Santiago de Chile Buenos Aires Representative offices - Financial Institutions Melbourne Foreign branches Group companies and major foreign holdingsDarko Trbojevic Financial Institutions Belgrade / September 2011 3
  5. 5. Trade Services:Expertise and experience since 1870“Made in Germany” around the globe … Team with experience, understanding and the desire to make you more successful 1,350 documentary and transaction services staff globally in 50 trade units In-depth knowledge of markets and drivers of clients success Member in major initiatives such as ICC Trade Default Register, UCP Consulting Group, BAFT Global Trade Industry Council, WTO, etc. 1.75 % of all Letters of Credit worldwide are handled by Commerzbank *) Every 25th guarantee in the world is handled by Commerzbank *) *) Source: SWIFT WatchDarko Trbojevic Financial Institutions Belgrade / September 2011 4
  6. 6. Risks in International TradeRisks …for the Exporter …for the ImporterEconomic Risks Manufacture Delivery Acceptance of delivery Quality Unwillingness to pay Exchange rates fluctuations Inability to pay Exchange rates fluctuationsPolitical Risks Revolution, War Revolution, War Payments ban/ Moratorium Payments ban/ Moratorium Foreign exchange controls Foreign exchange controlsDarko Trbojevic Financial Institutions Belgrade / September 2011 5
  7. 7. Commercial Interests Importer: Ensuring receipt of goods/completion of services in due time and in agreed quality. Exporter:Ensuring payment in due time and in the agreed currency.Darko Trbojevic Financial Institutions Belgrade / September 2011 6
  8. 8. Intermediation of the different positions via: Banks Leasing Companies Factoring ForfaitingDarko Trbojevic Financial Institutions Belgrade / September 2011 7
  9. 9. Specific Options available in Serbia: AOFI SIEPA Serbian Development Fund National Bank of SerbiaDarko Trbojevic Financial Institutions Belgrade / September 2011 8
  10. 10. Payment instruments & security aspects from an exporter‘s perspective An additional security for the financial compensation of losses Advance- payment or damages if one of the involved in parties does not fulfil their cr contractual obligations by ea si Confirmed Letter providing a ng of Credit se cu rit Bank Guarantee y Unconfirmed Letter of Credit (Aval) Documentary Collection The guarantee compensates for e.g. financial disadvantages out of Payment after receipt of goods non-payment, non-delivery,non- perfomance, warranty.Darko Trbojevic Financial Institutions Belgrade / September 2011 9
  11. 11. The Documentary Letter of Credit: Advantages and Disadvantages Exporter‘s view Advantages Disadvantages The risk of non acceptance of goods and the The commercial and the political risk remains risk of Importer‘s unwillingness to pay or (if the credit is not confirmed/ silently confirmed). inability to pay are excluded by the irrevocable Exporter is liable for costs arising from handling payment undertaking of the issuing bank and, if of the credit. so, the confirming bank. Increased time and effort for the compiling of The credit can serve as a financing instrument. complying documents. Importer‘s view Advantages Disadvantages Exclusion of risk of quality: quality and quantity The risk of non-delivery and non-performance of goods can be ensured by requirements of remains (if the goods and/or services are not specific documents (e.g. inspection certificate). delivered/rendered in due time). Payment will be only effected upon presentation Utilisation of credit line. of complying documents. Importer is liable for costs arising from issuance and handling of the credit.Darko Trbojevic Financial Institutions Belgrade / September 2011 10
  12. 12. The Documentary Letter of Credit: Flow Chart(Credit available with the advising bank by sight payment) 1. Order, Contract or similar Importer Exporter 5. Shipment of goods8. 2. Instruction 6. Presentation 4.a Delivery of Advising, documents/ to issue of Documents/ confirmation Debit of a credit Payment 4.b (if any) account 7. Remittance of documents/ Debit of account Issuing Bank 3. Issuing of credit Advising BankDarko Trbojevic Financial Institutions Belgrade / September 2011 11
  13. 13. The Bank Guarantee: Advantages and Disadvantages View of the Ordering Party Advantages for the Guarantee Orderer Disadvantages for the Guarantee Orderer He avoids to deposit an unfavourable and high- His credit line is charged. risk cash collateral with his partner. He must pay the costs for the issuance of the The guarantee amount will be debited to his guarantee. account only in case of a complying claim for Additional costs of the second bank occur in case payment. of an indirect guarantee. View of the Beneficiary Advantages for the Beneficiary Disadvantages for the Beneficiary He holds an irrevocable payment undertaking of a The economic and political risks remain (in case bank, in case of an indirect guarantee of a bank of direct guarantee or if the guarantee is not he has chosen, in his own country, according to confirmed). local law and with the possibility of a simple and Payment will only be effected when a complying fast claim for payment. claim for payment has been lodged.Darko Trbojevic Financial Institutions Belgrade / September 2011 12
  14. 14. Flow chart Direct Guarantee (example: performance guarantee) 1. Contract Buyer/ Seller/ Importer Exporter 3. Guarantee 2. Order to issue a guarantee Guaranteeing BankDarko Trbojevic Financial Institutions Belgrade / September 2011 13
  15. 15. Legal Regulations for the Documentary Business in GermanyForeign Trade Act (Außenwirtschaftsgesetz/AWG)is the law that provides guidelines for the German Foreign Trade and Payments Ordinance (AWV) mentionedbelow, and contains definitions, authorizing bodies as well as penal, fine and monitoring provisions.German Foreign Trade and Payment Ordinance (Außenwirtschaftsverordnung/AWV)contains current provisions such as reporting provisions, foreign trade restrictions (embargo provisions,boycott regulations) and the country list K.DUAL-USE Regulation (DUAL-USE-Verordnung)governs the export of items, technologies and skills from the European Union, which can serve both civil andmilitary purposes. Violations are punishable in accordance with, amongst other things, the Foreign Trade Act.War Weapons Control Act (Kriegswaffenkontrollgesetz/KWKG)provides a ban on the production of and trade in ABC weapons as well as involvement in such activities andthe duty to obtain a licence for the production and transport and trade of equipment, substances andorganisms specified in the War Weapon List.Money Laundering Act (Geldwäschegesetz/GwG)obligates banks to verify the identity of the customers and economic beneficiaries of business transactionswhen entering into business relations and certain transactions („Know Your Customer“-/ KYC-principle).Darko Trbojevic Financial Institutions Belgrade / September 2011 14
  16. 16. Darko Trbojevic Commerzbank AG Financial InstitutionsRepresentative Commerzbank Belgrade KaiserplatzTelephone: +381 (0)11 / 3018 520 Frankfurt am MainFax: +381 (0)11 / 3018 523E-mail: darko.trbojevic@commerzbank.com Postal address: Vladimira Popovica 6, A-112 11070 Beograd, SerbiaDarko Trbojevic Financial Institutions Belgrade / September 2011

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