Trade Finance Basics

Introduction

Dive into the essentials of Trade Finance with this comprehensive course tailored for professionals, students, and anyone keen to understand global trade mechanisms. This course provides a detailed overview of trade finance, regulatory frameworks, and critical operational aspects, ensuring you are well-equipped to navigate the complexities of international trade.

Course Highlights

  • International Trade Environment and Methods of Settlements
  • Explore global trade dynamics and various methods like Letters of Credit, Bills of Exchange, and Documentary Collections.
  • Foreign Exchange Management Act (FEMA), 1999
  • Gain insights into FEMA regulations governing foreign exchange transactions in India.
  • Export Finance
  • Understand pre-shipment and post-shipment finance solutions for exporters.
  • Import Finance and Handling of Imports
  • Learn about import financing options and best practices for handling imports effectively.
  • Uniform Customs and Practice for Documentary Credits (UCPDC)
  • Master UCPDC guidelines that govern Letters of Credit in international trade.
  • Non-Resident Accounts and Foreign Currency Accounts
  • Get a clear understanding of NRE, NRO, FCNR accounts, and their significance in trade finance.
  • Remittances (IR and OR including Liberalized Remittance Scheme)
  • Explore inward and outward remittance mechanisms, including the Liberalized Remittance Scheme (LRS).
  • Trade-Based Money Laundering (TBML)
  • Learn to identify and mitigate risks associated with TBML in trade finance operations.

Benefits of the Programme

  • Understand Global Trade Dynamics: Learn the foundational principles of international trade.
  • Manage Risks and Compliance: Gain insights into regulatory frameworks like FEMA, UCPDC, and AML practices.
  • Enhance Operational Skills: Master the use of trade finance tools like letters of credit, bank guarantees, and remittance mechanisms.
  • Boost Career Opportunities: Certification provides a competitive edge in trade finance roles.

Self-Learning Program - Best Suited For

  • Trade and Finance Professionals: Bankers, trade officers, and compliance specialists.
  • Entrepreneurs & SMEs: Business owners managing cross-border transactions.
  • Students & Academics: Ideal for those studying international business, finance, or trade law.
  • Legal and Financial Advisors: Advisors assisting clients in trade finance operations.
Programme Content Overview

1. International Trade Environment and Methods of Settlements

  • Overview of global trade dynamics and their impact on economies.
  • Key trade instruments: letters of credit, documentary collections, and bank guarantees.
  • Comparison of settlement methods: open account, advance payment, and consignment.
  • Role of trade agreements (e.g., WTO, FTA) in shaping international trade policies.
  • Managing trade risks: political, credit, and currency risks.
  • Digital platforms and their influence on modern trade settlements.
2. Foreign Exchange Management Act (FEMA), 1999

  • Objectives and scope of FEMA in regulating foreign exchange transactions.
  • Key definitions: current account and capital account transactions.
  • Role of Authorized Dealers (AD) in facilitating foreign exchange.
  • Documentation requirements for export and import transactions.
  • Penalties for non-compliance under FEMA regulations.
  • RBI circulars and updates impacting cross-border trade operations.
3. Export Finance

  • Pre-shipment finance: Packing credit, factoring, and advance payments.
  • Post-shipment finance: Export bills discounting, FDBP, and forfaiting.
  • Role of EXIM Bank and ECGC in promoting exports.
  • Export credit insurance: Coverage and claim processes.
  • Understanding export incentives under India’s Foreign Trade Policy (FTP).
  • Case studies: Real-world application of export finance tools.
4. Import Finance and Handling of Imports

  • Funded facilities: Working capital loans, term loans for capital goods.
  • Non-funded facilities: Import letters of credit, bank guarantees, and standby LCs.
  • Customs clearance process and associated documentation.
  • Key regulations: Importer Exporter Code (IEC) and IDPMS compliance.
  • Handling high-sea sales and special import cases (e.g., replacements, non-physical goods).
  • Risk management: Exchange rate risks and supplier defaults.
5. Uniform Customs and Practice for Documentary Credits (UCPDC)

  • Overview of UCP 600 and its significance in international trade.
  • Types of letters of credit: Confirmed, revolving, transferable, and back-to-back LCs.
  • Examination of documents under UCP 600 guidelines.
  • Common discrepancies in documentary credits and how to resolve them.
  • Understanding ISBP (International Standard Banking Practice) guidelines.
  • Practical scenarios: Using UCP rules for trade dispute resolution.
6. Non-Resident Accounts and Foreign Currency Accounts

  • Features and benefits of NRO, NRE, and FCNR-B accounts for NRIs.
  • Specialized accounts: SNRR, Diamond Dollar, and EEFC accounts.
  • Tax implications and repatriation rules for non-resident accounts.
  • Opening and maintaining foreign currency accounts under RBI guidelines.
  • Currency risk management for businesses using foreign accounts.
  • Case studies: Best practices in managing cross-border accounts.
7. Remittances (Inward, Outward, and Liberalized Remittance Scheme - LRS)

  • Understanding inward remittance mechanisms: SWIFT, MTSS, and RDA.
  • Permissible outward remittances under LRS: Education, travel, and investments.
  • Documentation and compliance requirements for remittances under FEMA.
  • Exchange control regulations for trade-related remittances.
  • Role of banking channels and digital platforms in facilitating remittances.
  • Case studies: Challenges and solutions in managing cross-border remittances.
8. Trade-Based Money Laundering (TBML)

  • Definition and red flags for identifying TBML activities.
  • Techniques used in TBML: Over/under invoicing, multiple invoicing, and false descriptions.
  • Regulatory guidelines for combating TBML in international trade.
  • Role of banks and financial institutions in detecting suspicious activities.
  • AML (Anti-Money Laundering) compliance: Processes and penalties.
  • Case studies: High-profile TBML cases and lessons learned.

Course Materials include –

Study material of Mastering Trade Finance Basics: From International Trade to TBML prepared by Market Experts available on SIFL Learning platform (SIFL-LMS).

Video Presentation for explanation of the Topics Presentation–wise SIFL Mock/Assessment test.

One SIFL Final tests for the Mastering Trade Finance Basics: From International Trade to TBML

Self-learning training program with access to the SIFL Learning Platform (SIFL-LMS)

Course Fees- INR 20,000 INR 5,000

USD 250 USD 100

LMS Availability: 90 Days.


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