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INTERNATIONAL TRADE
Course 5 Yudy Yunardy S.E., M.M.
WHO AM I ?
Fifteen years of Banking experience, six
years’ experience in Trade Finance
Operations background with Unsecure...
EMPLOYMENT SUMMARY
2014 Present Indonesia Banking School
2013 2014 Deutschebank AG
2011 2012 Misys Plc
2010 2011 DBS Indon...
RULES
1.Disable your comm. device
2.Presence 80% minimum
3.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%
PREVIOUSLY…
EXPORT LC PAYMENT MECHANISM
1. MT 700 (LC itself)
2. MT 705 (LC pre-advice)
3. MT 707 (LC Amendment)
ADVISING BANK RECEIVE
1. This message is sent by the issuing bank to the
advising bank
2. It is a brief advice of a documentary credit, the full...
MT 705
MT 705
SENDER: ABC BANK, MELBOURNE, AUSTRALIA
RECEIVER: IOB, MUMBAI, INDIA
:27: SEQUENCE OF TOTAL 1/1
:40A: FORM OF...
TRADE CYCLE
ISS.BANK
IMPORTER
ADV.BANK
EXPORTER
S C
4. Goods
1.ApplyLC
9. Uang
10. Docs
7. Uang
2. Issued LC
6. Docs
8. Ua...
MT 707
MT 707 Amendment to a Documentary Credit
Status Tag Field Name
M 20 Sender's Reference
M 21 Receiver's Reference
O ...
MT 707Sender ESSESESS
Message Type 707
Receiver GEBABEBB
Message Text
Sender's Reference :20:DC.IMP 3410/3444
Receiver's R...
TRADE CYCLE - AMENDMENT
ISS.BANK
IMPORTER
ADV.BANK
EXPORTER
S C
9. Goods
1.ApplyLC
14.Uang
15.Docs 12. Uang
2. Issued LC
1...
MT 754 (Advice of Payment,
Acceptance or Negotiation)
ADVISING BANK RECEIVE
PAYMENT
MT 754 SAMPLE
Sender DEUTDEMM
Message Type 754
Receiver CHEMUS33
Message Text
Sender's Reference :20:CL934372
Related Refe...
DOCUMENTS CHECKING
MT 700
MT 700
SENDER: ABC BANK, MELBOURNE, AUSTRALIA
RECEIVER: IOB, MUMBAI, INDIA
:27: SEQUENCE OF TOTAL 1/1
:40A: FORM OF...
MT 700
:59: BENEFICIARY AACHI MASALA PTY LTD
41, NORTH CAR STREET,
CHENNAI, INDIA-600007
:32B: CURRENCY CODE, AMOUNT AUD 6...
MT 700
:45A: DESCRIPTION OF GOODS MANGO PICKLE, GARLIC PICKLE,
SAMBAR POWDER, RASAM POWDER,
DHAL POWDER AS PER PERFORMA
IN...
MT 700
:47A: ADDITIONAL CONDITIONS
1. A COPY OF ALL DOCUMENTS TO BE SENT TO APPLICANT WITHIN 5 DAYS AFTER
SHIPMENT DATE
2....
COVERING SCHEDULE
DRAFT
COMMERCIAL INVOICE
CERTIFICATE OF ORIGIN
DOCUMENTS CHECKING RESULT
1. Clean documents (comply with LC
terms)
2. Discrepanci(es), there’s one or more
discrepant in ...
TRADE FINANCING ON EXPORT LC
After the seller has submitted his documents to the
Bank (for the case of sight bill) or obtained
acceptance on the bill o...
1. Export LC negotiation amount is the amount applied for negotiation
deducted by all the estimated negotiation interest a...
FEES AND CHARGES
FEES AND CHARGES
THANK YOU AND GOODBYE
International trade course 5
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International trade course 5

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Export LC payment mechanism, documents checking, Trade financing on export LC, MT 700, MT 705, MT 707, MT 754, Pre-advice, Advice Payment, Reimbursement, Negotiation

Published in: Economy & Finance
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International trade course 5

  1. 1. INTERNATIONAL TRADE Course 5 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. PREVIOUSLY…
  8. 8. EXPORT LC PAYMENT MECHANISM
  9. 9. 1. MT 700 (LC itself) 2. MT 705 (LC pre-advice) 3. MT 707 (LC Amendment) ADVISING BANK RECEIVE
  10. 10. 1. This message is sent by the issuing bank to the advising bank 2. It is a brief advice of a documentary credit, the full details of which will follow 3. The pre-advice is not an operative credit instrument. Unless otherwise stated, the issuing bank must forward the operative credit instrument, ie, MT 700 Issue of a Documentary credit, without delay MT 705
  11. 11. MT 705 MT 705 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 150105 :40E: APPLICABLE RULES UCP LATEST VERSION :31D: DATE AND PLACE OF EXPIRY 150609 OPENING BANKS COUNTERS :50: APPLICANT HOT AND SPICY PTE LTD 240 YARROWEE STREET SEBASTOPOL VICTORIA, AUSTRALIA 3356
  12. 12. TRADE CYCLE 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
  13. 13. MT 707 MT 707 Amendment to a Documentary Credit Status Tag Field Name M 20 Sender's Reference M 21 Receiver's Reference O 23 Issuing Bank's Reference O 52a Issuing Bank O 31C Date of Issue O 30 Date of Amendment O 26E Number of Amendment M 59 Beneficiary (before this amendment) O 31E New Date of Expiry O 32B Increase of Documentary Credit Amount O 33B Decrease of Documentary Credit Amount O 34B New Documentary Credit Amount After Amendment O 39A Percentage Credit Amount Tolerance O 39B Maximum Credit Amount O 39C Additional Amounts Covered O 44A Place of Taking in Charge/Dispatch from .../ Place of Receipt O 44E Port of Loading/Airport of Departure O 44F Port of Discharge/Airport of Destination O 44B Place of Final Destination/For Transportation to.../ Place of Delivery O 44C Latest Date of Shipment O 44D Shipment Period O 79 Narrative
  14. 14. MT 707Sender ESSESESS Message Type 707 Receiver GEBABEBB Message Text Sender's Reference :20:DC.IMP 3410/3444 Receiver's Reference :21:NONREF Date of Issue :31C:030517 Date of Amendment :30:030521 Number of Amendment :26E:01 Beneficiary :59:PROQUINAL S.A. 48 RUE DE LA BOURSE BRUSSELS New Date of Expiry :31E:030930 Increase of D/C :32B:USD3250, New D/C Amount :34B:USD34750, Narrative :79:BILLS OF LADING TO BE ISSUED NOT LATER THAN 20 SEPTEMBER 2003
  15. 15. 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
  16. 16. MT 754 (Advice of Payment, Acceptance or Negotiation) ADVISING BANK RECEIVE PAYMENT
  17. 17. MT 754 SAMPLE Sender DEUTDEMM Message Type 754 Receiver CHEMUS33 Message Text Sender's Reference :20:CL934372 Related Reference :21:IMP 693/70224 Principal Amount Paid :32A:030817EUR95000, Charges Added :73:COMMISSION EUR200, Total Amount Claimed :34A:030817EUR95200, Reimbursing Bank :53A:CHEMDEFF End of Message Text/Trailer
  18. 18. DOCUMENTS CHECKING
  19. 19. MT 700 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 150105 :40E: APPLICABLE RULES UCP LATEST VERSION :31D: DATE AND PLACE OF EXPIRY 150609 OPENING BANKS COUNTERS :50: APPLICANT HOT AND SPICY PTE LTD 240 YARROWEE STREET SEBASTOPOL VICTORIA, AUSTRALIA 3356
  20. 20. MT 700 :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 ALLOWED :44E: PORT OF LOADING ANY INDIAN PORT :44F: PORT OF DISCHARGE ANY AUSTRALIAN PORT :44C: LATEST SHIPMENT DATE 150525
  21. 21. MT 700 :45A: DESCRIPTION OF GOODS MANGO PICKLE, GARLIC PICKLE, SAMBAR POWDER, RASAM POWDER, DHAL POWDER AS PER PERFORMA INVOICE NO 123456. CFR 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
  22. 22. MT 700 :47A: ADDITIONAL CONDITIONS 1. A COPY OF ALL DOCUMENTS TO BE SENT TO APPLICANT WITHIN 5 DAYS AFTER SHIPMENT DATE 2. THIRD PARTY DOCUMENTS ACCEPTABLE 3. ALL DOCUMENTS TO BE FORWARDED TO ABC BANK, MELBOURNE, AUSTRALIA IN TWO LOTS BY BLUE DART COURIERS. 4. CHARGES ADDITIONAL TO FREIGHT NOT ACCEPTABLE 5. THIS LC IS TRANSFERRABLE BY INDIAN OVERSEAS BANK, TIRUNELVELI, INDIA :71B: CHARGES ALL BANK COMMISSIONS AND CHARGES OUTSIDE AUSTRALIA, PLUS ADVISING AND REIMBURSING COMMISSIONS, ARE FOR THE ACCOUNT OF THE BENEFICIARY. :48: PERIOD FOR PRESENTATION DOCUMENTS TO BE PRESENTED WITHIN 15 DAYS AFTER THE DATE OF SHIPMENT BUT WITHIN THE CREDIT VALIDITY. :49: CONFIRMATION INSTRUCTIONS WITHOUT :57A: ADVISE THROUGH BANK INDIAN OVERSEAS BANK, TIRUNELVELI, INDIA
  23. 23. COVERING SCHEDULE
  24. 24. DRAFT
  25. 25. COMMERCIAL INVOICE
  26. 26. CERTIFICATE OF ORIGIN
  27. 27. DOCUMENTS CHECKING RESULT 1. Clean documents (comply with LC terms) 2. Discrepanci(es), there’s one or more discrepant in the documents according to LC terms. In this case bank could ask for revision from exporter OR send the documents and asking for acceptance to issuing bank
  28. 28. TRADE FINANCING ON EXPORT LC
  29. 29. After the seller has submitted his documents to the Bank (for the case of sight bill) or obtained acceptance on the bill of exchange by the issuing bank (for the case of term bill), he may request for bills purchased/discounting to obtain working capital prior to getting payment from the issuing bank. In the event of default in payment or documents being rejected by the issuing bank, the Bank may seek reimbursement from the seller FINANCING ON EXPORT
  30. 30. 1. Export LC negotiation amount is the amount applied for negotiation deducted by all the estimated negotiation interest and bank commissions 2. The tenor of export negotiation starts from the date of negotiation by the bank and ends by the date the bank receives payment from the issuing bank. Export negotiation under sight letter of credit shall not exceed 21 days principally. For usance letter of credit the tenor shall not exceed five working days after the acceptance date by the issuing bank 3. The negotiation currency should be the original currency of the draft under letter of credit 4. The interest rate for export negotiation shall be determined according to the situation on international financial markets, the funding costs of our bank and creditworthiness of the issuing bank NEGOTIATION LC
  31. 31. FEES AND CHARGES
  32. 32. FEES AND CHARGES
  33. 33. THANK YOU AND GOODBYE

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