This eCourse consists of two modules. Module 1 covers trade finance security - it is the collective term for risk mitigation instruments which are particularly suited to large-scale international projects. This module focuses on bank guarantees or bonds, standby letters of credit, and demand guarantees, which are the most common risk mitigation tools in this area. These instruments can help to reduce cash flow uncertainty, non-payment risk, and non-performance risk.
Module 2 provides the background to the development of UCP 600 and describes how documentary credits are structured according to the ICC guidelines. The basic principles and processes are covered, as are the roles of the parties involved in documentary credit transactions.
On completion of this course, you will be able to:
- Describe the differences between various guarantees/bonds that are offered by banks for international trade transactions
- Outline the purpose of standby letters of credit and demand guarantees
- Explain the role of export credit agencies (ECAs) in the provision of security for trade finance transactions
- Outline the background and history of UCP 600
- Describe the essentials of documentary credits under UCP 600
Module 1: Trade Finance Security
Topic 1: Bank Guarantees/Bonds
Topic 2: Demand Guarantees & Standby Letters of Credit
Topic 3: Role of Export Credit Agencies in Trade Finance Security
Module 2: UCP 600
Topic 1: Background to UCP 600
Topic 2: Essentials of UCP 600 & Documentary Credits