Introduction:

Documentary credits, also commonly known as letters of credit (LC), are often used for settlement of international trade transactions. While the seller takes comfort that the issuing bank provides an undertaking to honour payment upon presentation of documents that are in strict compliance with the terms and conditions of the LC, more often than not the seller is unable to fully comply with the terms and conditions of the LC either through circumstances that are beyond his control or due to lack of understanding of international rules governing LC which are technical. It is often costly for the seller when discrepancies are detected as apart from no longer enjoying the issuing bank’s undertaking to honour payment, discrepancy fees are imposed and there is a delay in payment as the issuing bank contacts the buyer to accept the discrepancies.  In extreme situations, it may lead to buyer requesting for a huge discount or even non-payment.

While letters of credit are preferred for settlement of international trade transactions as it is the next best alternative to advance payment, Bankers Acceptances (BA) has emerged over the years as a low cost trade financing instrument which enable manufacturers and traders to remain competitive in the international and domestic market.

This two-day program will enable participants to understand the mechanics of documentary credits, resolution of potential issues in the operation of credits, the protection given to each of the parties and the use of bankers acceptances as a cost effective trade financing instrument to provide manufacturers and traders with a competitive edge.

Learning Objectives:

At the end of this program, participants would be able to:

• Have an understanding of the operation of documentary credits;
• Identify the key issues in the letter of credit transactions;
• Explain documentary credit operation;
• Be aware of the existence of international rules and practice governing documentary credits, i.e. Uniform Customs and Practice for Documentary Credits (UCP 600) and International Standard Banking Practice for examination of documents under UCP 600 (ISBP 745);
• Solve the practical problems and find ways to overcome the problems in the credit transactions;
• Have an understanding of how to use special documentary credits;
• Avoid being a victim of fraud in documentary credit transactions;
• Be aware of eligible trade finance transactions for BA financing;
• Understand the features and conditions for BA financing;
• Understand and comply with Guidelines on Bankers Acceptances that are issued by Bank Negara Malaysia;
• Use BA as a cost effective financing instrument.

Who Should Attend:

Manufacturers, Traders, Exporters, Importers, Finance Managers, Sales Managers, Marketing Managers and their staff those who are interested to enhance their knowledge in LC and BA.