World Trade

DOCUMENTS

Bill of Lading (UCP 600 – Article 20)

Research indicates that trade and exchange of goods and commodities via sea can be traced back to the Stone Age.
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Insurance Document – Part II

There are many shipping horror stories, for instance consignment comprising of rare stones disappeared, shipment containing glass sheet found to be broken into a thousand pieces at destination or a dent on an imported car.
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Insurance Document – Part I

Exporter may suffer a huge loss if the goods are damaged or lost in transit, insurance coverage protects the exporter from financial loss.
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Beneficiary Certificate – ISBP 745

Beneficiary certificate is a document that provides beneficiary admittance that the action or the event stipulated in the credit has been fulfilled.
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Certificate of Origin

Certificate of Origin is an important document to determine the Customs duty or to avail any preferential customs duty (GSP) and/or incentive based on the geographic location.
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Packing list – ISBP 745

A packing list or shipping list is a catalog of all the articles that are included in a package that has been shipped from one place to another. Packing list is an optional document, UCPDC 600 has not provided any guiding article for presentation of a packing list.
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Air Transport document (UCP 600 – Article 23)

Air Cargo transport constitutes only a meager 1% of the total world trade volume but 30% of the total world trade value, this is because air transport is targeted and more suitable for high value or time sensitive products.
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Multimodal Transport document (UCP 600 Article 19)

It is interesting to note that the article 19 applies even when the credit does not call for a Multimodal transport document explicitly. If the the port of loading or the port of discharge required by the credit is not a port but is an inland place, it is evident to all parties that more than one mode of transport will be utilized and hence UCP Article 19.
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Commercial Invoice (UCP 600 Article 18)

All the banks and financial institutions handling LC transactions know that they are required to deal with documents and not concerned with the underlying goods/services/performance, but when you minutely study the rules around the value and the description to be provided/not provided on the invoice with examples you will notice that with these rules a sincere attempt has been made to maximize the authenticity and genuineness of the goods/services/performance.
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ORGANIZATIONS

International Chamber of Commerce (ICC)

ICC is headquartered in Paris and Harold McGraw III is the Chairman of ICC. Today ICC has thousands of member companies and associations from over 130 countries.
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Working for a World Free of Poverty – The World Bank

The World Bank was created in 1944 at the Bretton Woods Conference. The World Bank is headquartered in Washington DC and has more than 100 offices in member countries.
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PRODUCTS

MT103 – Single Customer Credit Transfer

MT103 is also used in the form on MT103+ and MT103REMIT which facilitates straight through processing.
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SWIFT MT1xx and MT2xx : Payments

SWIFT Message Type (MT) 1xx and Message Type (MT) 2xx are used for payment related messages.
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International Trade Payments (SWIFT)

The volume of world trade payments is gigantic and the volume of SWIFT messages reached an all time high of 5 billion messages in 2013.
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SWIFT MT7xx: Documentary Credits and Guarantees

SWIFT or Society for Worldwide Inter-bank Financial Telecommunication is a global provider of financial secure messages. It provides a network to allow both financial and non-financial institutions to exchange financial transactions in a secured manner.
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Revolving Credit

If the importer wants to import a specified material from the overseas seller for a specified period at regular intervals, revolving type of credits are useful.
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Bitcoin – an illusionary wallet

Bitcoin is an innovative, decentralized digital currency that enables instant payments to anyone, anywhere in the world. Bitcoins are finite and only 25 bitcoins can be mined every 10 minutes.
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Bank Guarantee – An introduction

Bank Guarantees demonstrate the applicant’s repayment abilities and prove his solvency and credit worthiness towards his business partners.
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Post-shipment Finance

The relationship of Trade finance with Cross border trade is like that of an oil with the engine. Trade finance is a major driver of international trade and banks/financial institutions play the most important role in facilitating trade finance.
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Factoring

Today, almost every industry can profit from factoring. Factoring is also known as Receivables finance and is an export finance instrument available in international trade market.
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Pre-shipment Finance or Packing Credit

Trade finance may come in the form of secured or unsecured loans or lines of credit from banks or financial institutions. Pre-shipment financing is especially important to smaller enterprises because the international sales cycle is longer than the domestic sales cycle.
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Forfaiting

International Forfaiting is gaining rapid popularity in export oriented countries with a global market size of more than US$ 300 billion annually.
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Bank Payment Obligation (BPO)

BPO is ICC’s response to new market needs to help deal with increasing cost pressures and changing risk dynamics arising as a result of widespread liberalization in emerging markets.
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Currency Trading – Introduction to Derivative instruments Part II

In today's global markets a good understanding of how foreign exchange can affect your business and investment decisions is crucial. Derivative products facilitate hedging of currency volatility risk and opportunity to make speculative profits. In this part we shall discuss Futures, Option and Swaps with examples.
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Currency Trading – Introduction to Derivative instruments Part I

Foreign exchange trading market happens to be one of the largest financial markets in the world. On an average, foreign exchange worth $5.3 trillion is traded every day.
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Documentary Letter of Credit – Types

The fundamental purpose of a Letter of credit is to provide transaction payment security to the beneficiary and documentary performance to the applicant and hence all LCs are fundamentally similar. There are however a few categories of LCs which do have a customized usage.
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Documentary Credit – An introduction

A letter of credit is a document issued by a financial institution, or a similar party, assuring payment to a seller of goods and/or services provided certain documents have been presented to the bank.
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REGULATIONS

Documentary Letter of Credit – Parties

Documentary Letter of credit (LC) is a financial contract between the issuing bank, applicant and the beneficiary. Let us understand the role of various parties involved in an LC transaction.
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Incoterms 2010 – A Quick reference chart

The last rules, Incoterms 2010, were published on January 1, 2011. Our quick reference guide makes it easier for our readers to remember the characteristics of each incoterm.
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International Commercial Terms 2010 (INCOTERMS 2010) – Part II

Incoterm minimizes the risk of dispute arising in the sales contract. We have discussed DAT and DAP in Part I now let us discuss the balance incoterms which are a part of both Incoterms 2000 and Incoterms 2010.
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International Commercial Terms 2010 (INCOTERMS 2010) – Part I

Incoterms are a set of three-letter standard trade terms commonly used in international contracts for the sale of merchandise.
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Documentary Letter of Credit scrutiny – Common discrepancies

An understanding of the most common discrepancies that banks find in examining documentary credit (DC) presentations can instruct the exporters and help them avoid the common rejections.
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TRADE BLOCK

The Australia New Zealand Closer Economic Relations Trade Agreement (ANZCERTA or CER)

Closer Economic Relations (CER) is a free trade agreement entered into by governments of Australia and New Zealand on 28th March, 1983.
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TAFTA – The Transatlantic Free Trade Agreement

The Transatlantic Free Trade Agreement (TAFTA) intends to create world’s largest free trade area between the United States and the European Union.
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North American Free Trade Agreement (NAFTA)

NAFTA took effect on January 01, 1994 and marks its 20th anniversary this year. NAFTA agreement is executed between the governments of Canada, Mexico and United States in San Antonio, Texas.
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ASEAN Free Trade Area (AFTA)

AFTA concord was signed in Singapore in 1992 and has 10 countries, Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. These countries have also formed an association known as ASEAN – Association of South East Asian Nations.
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