Training
International Trade Finance and Letters of Credit Training
International trade finance is the process of providing financial services to businesses that are engaged in international trade. These services can include things like letters of credit, trade financing, and other financial instruments
that help businesses manage the risks associated with international trade.
A letter of credit (LOC) is a financial instrument that is often used in international trade as a way to mitigate the risks of non-payment. An LOC is a promise by a bank to pay the seller a certain amount of money, usually in a
foreign currency, once certain conditions are met. These conditions are typically outlined in the sales contract between the buyer and the seller. The buyer typically provides the bank with a letter of credit, which the seller
can use to obtain financing from the bank.
An LOC can be used to mitigate the risks of non-payment by the buyer, as well as the risks of non-delivery by the seller. It acts as a guarantee that the buyer will pay for the goods, and that the seller will deliver them as agreed
upon.
International trade finance and letters of credit are important tools for businesses that are engaged in international trade, as they help to mitigate the risks associated with cross-border transactions and provide a mechanism
for financing trade. These tools are typically provided by banks and other financial institutions, which play a critical role in supporting international trade and helping businesses to grow and expand their operations.
“Letters of credit are the backbone of international trade.”
- John Cryan
What we offer in this Training
A training session on international trade finance and letters of credit covers a variety of topics, such as:
- Understanding international trade finance: Trainees may learn about the various financial products and services that are available to support international trade, including letters of credit, trade financing, export credit
insurance, and other financial instruments.
- Regulations and compliance: Trainees may learn about laws, regulations, and policies that apply to international trade finance, including compliance with anti-money laundering (AML) laws, know-your-customer (KYC) requirements,
and trade sanctions.
- Letter of Credit (LOC) operations: Trainees may learn about how letters of credit work, including the different types of letters of credit, the process for issuing and advising letters of credit, and the documentation required
to support a letter of credit transaction.
- Risk management: Trainees may learn how to evaluate the risks associated with international trade finance and how to mitigate those risks using financial instruments such as letters of credit.
- Incoterms: Trainees may learn about the Incoterms which are the internationally recognized trade terms that are used to define the responsibilities of buyers and sellers in international trade transactions.
- Financing and credit analysis: Trainees may learn how to evaluate the creditworthiness of customers and how to structure trade financing deals to meet the needs of both the buyer and the seller.
- Payment methods in international trade: Trainees may learn about the various payment methods used in international trade such as open account, cash in advance, documentary collections and letter of credit.
- Trade finance in practice: Trainees may learn about case studies and real-world examples of how international trade finance and letters of credit are used in practice.
- Digital trade finance: Trainees may learn about the use of technology in international trade finance, such as digital platforms for issuing and advising letters of credit and trade finance.
- Continuous improvement: Trainees may learn how to continuously monitor and improve the international trade finance process to ensure that it remains aligned with the company's overall strategy and goals.
