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International trade course 4

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Rules for trade products, UCP 600, ISP 98, URC 522, URR 725, URDG 758, Import LC Payment Mechanism, Trade cycle amendment, Trade fees and charges

Published in: Economy & Finance
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International trade course 4

  1. 1. INTERNATIONAL TRADE Course 4 Yudy Yunardy S.E., M.M.
  2. 2. 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.)
  3. 3. 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
  4. 4. RULES 1.Disable your comm. device 2.Presence 80% minimum 3.Time alloc. 08.00 – 10.30
  5. 5. TEXTBOOK Koch, Timothy (2015), Bank Management, The Dryden Press
  6. 6. GRADING EVALUATION 1. Participation 5% 2. Quiz / exercise 10% 3. Assignment 15% 4. Midterm 35% 5. Final 35%
  7. 7. 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
  8. 8. 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
  9. 9. 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
  10. 10. PREVIOUSLY…
  11. 11. RULES FOR TRADE PRODUCTS
  12. 12. 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
  13. 13. 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
  14. 14. UCP 600
  15. 15. 1. General Provisions 2. Liability 3. Examination 4. Documents 5. Misc Issues 6. Disclaimers 7. Transfer & Assignment UCP 600
  16. 16. 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
  17. 17. 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
  18. 18. 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
  19. 19. 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
  20. 20. 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
  21. 21. 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
  22. 22. 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
  23. 23. 38. Article 38 Transferable Credits 39. Article 39 Assignment of Proceeds UCP 600 – TRANSFER & ASSIGNMENT
  24. 24. ISP 98
  25. 25. 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
  26. 26. 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
  27. 27. URC 522
  28. 28. 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
  29. 29. 1. Applications of URC 522 2. Definition of collection 3. Parties to a collection GENERAL PROVISIONS AND DEFINITIONS
  30. 30. 4. Collection instruction FORM AND STRUCTURE OF COLLECTIONS
  31. 31. 5. Presentation 6. Sight/Acceptance 7. Release of commercial documents 8. Creation of documents FORM OF PRESENTATION
  32. 32. 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
  33. 33. 16. Payment without delay 17. Payment in local currency 18. Payment in foreign currency 19. Partial payments PAYMENT
  34. 34. 20. Interest 21. Charges and expenses INTEREST CHARGES AND EXPENSES
  35. 35. 22. Acceptance 23. Promissory notes and other instruments 24. Protest 25. Case-of-need 26. Advises OTHER PROVISIONS
  36. 36. URR 725
  37. 37. A. General Provisions and Definitions B. Liabilities and responsibilities C. Form of notification of authorisations, amendments and claims D. Miscellaneous provisions URR 725
  38. 38. 1. Applications of URR 725 2. Definitions 3. Reimbursement authorisations versus credits GENERAL PROVISIONS AND DEFINITIONS
  39. 39. 4. Honour of a reimbursement claim 5. Responsibility of the issuing bank LIABILITIES AND RESPONSIBILITIES
  40. 40. 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
  41. 41. 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
  42. 42. IMPORT LC PAYMENT MECHANISM
  43. 43. TRADE CYCLE - SIGHT ISS.BANK IMPORTER ADV.BANK EXPORTER S C 4. Goods 1.ApplyLC 9. Uang 10. Docs 7. Uang 2. Issued LC 6. Docs 8. Uang 5. Docs 3.AdviseLC
  44. 44. UCP 600 Article 7 Issuing bank undertaking ISSUANCE LC
  45. 45. 1. UCP 600 Article 9 Advising of Credits and Amendments 2. UCP 600 Article 10 Amendments AMENDMENT LC
  46. 46. TRADE CYCLE - AMENDMENT ISS.BANK IMPORTER ADV.BANK EXPORTER S C 9. Goods 1.ApplyLC 14.Uang 15.Docs 12. Uang 2. Issued LC 11. Docs 13.Uang 10.Docs 3.AdviseLC 4.ReqAmd 5. Req Amd 6.ApplyAmd 7. Issued Amd 8.AdviseAmd
  47. 47. UCP 600 Article 16 Discrepant Documents, Waiver and Notice DISCREPANT DOCUMENTS
  48. 48. 1. In UCP 600 there is no major or minor discrepancies 2. Strike through 3. Correction 4. Typo DISCREPANT DOCUMENTS
  49. 49. 1. Latest delivery date (at BL or AWB) 2. LC Expiration date 3. Latest presentation date (UCP 600 Art.29) DISCREPANT DATES
  50. 50. 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
  51. 51. 1. Will require cash margin and/or 2. Promissory note SHIPPING GUARANTEE
  52. 52. 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
  53. 53. FEES AND CHARGES
  54. 54. FEES AND CHARGES

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