Module 1: Introduction to International Trade

     
1.    Appraise the benefits and risks of international trade and international trade finance

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2.    Analyse the documents used in international trade and the roles of international trade participants     and organisations
 

• Analyse the differences between domestic trade and international trade.

• Examine the benefits of international trade and trade agreements.

• Distinguish and classify the various risks in international trade.

• Demonstrate the roles of participants in international trade.

• Describe the contents and purpose of the various documents used in international trade.

• Outline the function of commercial documents, Bill of lading, Non-negotiable sea waybill, charter party bill of lading, telex released Bill of Lading, combined transport documents, Air transport document, Road, rail and inland waterway, courier and post receipts, general provisions for transport documents and Insurance documents.

• Examine the role of the International Chamber of Commerce (ICC).

• Analyse the purpose and nature of Incoterms.

• Differentiate between the various Incoterms and the responsibilities and costs of seller and buyer with each term.

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Module 2: Methods of Payment in International Trade

        
1.    Examine the payment methods used in international trade and the systems, mechanics and risks of those methods

 

2.    Analyse the uses and limitations of countertrade
   

• The 4 common methods of payment used in International Trade

• Describe the concept of 'open account' and the payment obligations of buyers and sellers in international trade.

• Compare and contrast the different methods of payment in international trade.

• Analyse the role of banks with each method of payment and in the transfer of payments.

• Describe the role of SWIFT in the international messaging and payments system.

• Appraise the use of foreign currency accounts for international payments.

• Appraise the use of cheques and bank drafts as methods of payment in international trade.

• Demonstrate the purpose and nature of countertrade.

• Compare the advantages and disadvantages of countertrade.

 

Module 3: Documentary Collections

        
1.    Analyse the purpose, advantages and risks of documentary collections and bills of exchange

 

2.   Appraise the role of the International Chamber of Commerce and the application of the Uniform Rules for Collections

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• Analyse the nature of collections and the difference between clean and documentary collections. 

• Identify the parties to a collection.

•  Analyse the stages in the documentary collection process and the role of banks in the process.

• Distinguish the nature and features of bills of exchange.

• Distinguish between documents against payment and documents against acceptance.

• Analyse the purpose, advantages and risks of documentary collections and bills of exchange.

• Describe the information included on a collection instruction.

• Demonstrate the application of the rules in the Uniform Rules for Collections (ICC Publication Number 522).

• Describe the advantages and practical problems with documentary collections.

• Examine the main rules in the Uniform Rules for Collections (URC 522).

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Module 4: Documentary Credits

        
1.    Analyse the purpose, contents, advantages and risks of documentary credits or letters of credit

 

2.    Examine the role of the International Chamber of Commerce including the application and benefits of the Uniform Customs and Practices for Documentary Credits

 

3.    Analyse the legal and regulatory issues involved in documentary credits, particularly in the context of money laundering
 

• Examine the nature of a documentary credit (letter of credit).

• Identify the participants in a documentary credit.

• Describe the documentary credit process. 

• Distinguish between sight payment, deferred payment and acceptance letters of credit and letters of credit available by negotiation.

• Distinguish between negotiation with and without recourse and how banks honour guarantees in a letter of credit.

• Examine the contents of a letter of credit.

• Describe the features of a letter of credit.

• Analyse the nature and purpose of confirmation of a letter of credit and silent confirmation.

• Appraise the different levels of security offered by various letter of credit arrangements.

• Describe the different roles banks play in a documentary credit arrangement.

• Describe the letter of credit application process.

• Demonstrate the role of the seller and third parties in the presentation of documents.

• Analyse the purpose, contents, advantages and risks of documentary credits or letters of credit.

• Examine the role of the issuing bank in the presentation of document.

• Examine the settlement process for a letter of credit.

• Describe the purpose and use of a transferable letter of credit, a back-to-back credit, a red clause letter of credit, a green clause letter of credit and a revolving letter of credit.

• Examine the role of the International Chamber of Commerce.

• Appraise the rules in ICC Uniform Customs and Practice UCP 600.

• Explain the purpose of anti-money laundering procedures for international trade transactions.

• Explain the purpose of the Wolfsberg Trade Finance Principles.

• Examine trade-based money-laundering methods and AML risk-based control measures.

• Analyse the legal and regulatory issues involved in documentary credits, particularly in the context of money laundering.

• Describe the nature of anti-money laundering procedures for documentary credit and documentary collection transactions

Module 5: Guarantees and Standby Credits

       
1.    Analyse the purpose, form, uses and limitations of guarantees and standby letters of credit

2.    Examine the role of the International Chamber of Commerce and the application and benefits of their Uniform Rules in relation to guarantees
  

• Describe the nature of bank guarantees and the main parties to a guarantee 

• Differentiate between direct and indirect guarantees

• Analyse the nature of a conditional guarantee and a demand guarantee

• Explain the risks for the principal with a demand guarantee

• Analyse the purpose of guarantees or bonds issued by a commercial bank

• Describe the different types of guarantees or bonds that may be issued by a bank

• Examine the rules that apply to the examination of a demand for payment under the terms of a bank guarantee.

• Examine the nature and use of a standby letter of credit

• Explain the difference between a guarantee and standby letter of credit

• Analyse the purpose, form, uses and limitations of guarantees and standby

• letters of credit

• Analyse the nature and purpose of a shipping guarantee issued by a bank

• Examine the uses and limitations of URCG 325

• Apply the rules in URDG 758 for demand Guarantees 

• Examine the role of the International Chamber of Commerce and the application and benefits of their Uniform Rules in relation to guarantees

• Apply the rules in ISP98 for international standby letters of credit

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Module 6: Foreign Exchange and Exchange Control

        
1.    Analyse the role of the systems and arrangements for making foreign currency settlements

2.    Analyse the function of foreign exchange markets, exchange rate risk and methods available for hedging or limiting that risk

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3.    Examine the use of exchange controls    

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• Demonstrate how foreign currency (FX) payments are made.

• Contrast the nature of nostro and vostro accounts.

• Describe the main participants in the foreign currency markets.

• Examine the nature of spot FX transactions, spot rates, margins and the spread between bid and ask rates.

• Apply a spot rate to calculate an amount payable or receivable in a spot transaction. 

• Calculate a cross rate.

• Analyse the reasons for exchange rate volatility

• Describe the nature of currency risk 

• Appraise the nature of  forward FX contracts and the use of these contracts to hedge exposures to currency risk

• Apply a forward rate to calculate an amount payable or receivable at settlement of a forward FX contract

• Demonstrate how forward FX rates are derived 

• Compare a fixed forward FX contract and an option forward FX contract

• Describe how forward FX contracts may be closed out or extended

• Calculate the settlement amount on close-out of a forward contract

• Appraise methods of hedging exposures to currency risk, other than forward FX contracts

• Describe the features of currency options and how these options may be used to hedge exposures to currency risk

• Compare over the counter and exchange traded currency options

• Analyse the nature and features of a range forward option and a participating forward contract

• Explain how to decide whether to hedge FX exposure and what hedging method to use

• Analyse the function of foreign exchange markets, exchange rate risk and methods available for hedging or limiting that risk

• Compare economic FX exposure and translational FX exposure

• Analyse the purpose and effectiveness of exchange controls

• Examine the use of exchange controls 

• Examine the impact of exchange controls on international trade

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Module 7: Trade Finance

        
1.    Examine the uses and limitations of the various forms of trade finance

2.    Analyse the characteristics, discounting, risks and regulations applicable to bills of exchange and banker’s acceptances

   

 

• Analyse the stages of the working capital cycle

• Explain the negotiation and discounting of bills

• Distinguish between structured trade finance and conventional banking finance

• Appraise the nature of structured trade finance and structured trade commodities finance

• Describe methods of import financing, including trust receipts and banker’s acceptances

• Analyse the advantages and risks of trust receipt financing for a bank

• Describe methods of export financing, including banker’s acceptances, export factoring, invoice discounting and forfaiting

• Calculate amount receivable from a discounted BA

• Calculate the amount payable for early redemption of a BA

• Examine methods of structured trade commodities financing, including escrow accounts, off-balance sheet financing, asset backed financing and tolling finance

• Analyse the characteristics, discounting, risks and regulations applicable to bills of exchange and banker’s acceptances

• Analyse the nature of structured trade commodity financing models, including export receivables-backed finance, prepayment financing and warehouse receipt financing

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Module 8: Trade Support from Government agencies

        
1.    Analyse the services offered by government agencies in facilitating and controlling the risk inherent in international trade

 

• Describe the banking and insurance services provided by government agencies to support exports and foreign trade

• Explain the difference between the different types of export credit risk

• Compare the costs and benefits of export credit insurance

• Analyse the services offered by government agencies in facilitating and controlling the risk inherent in international trade

• Analyse the purpose and benefits of the Bilateral Payments Arrangement (BPA) Agreement

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Module 9: International Trade Finance and Islamic Banking

       
1.    Examine the principles and products of Islamic trade finance and banking

2.    Differentiate between conventional and Islamic financial systems and arrangements 
    

 

• Analyse the nature of Shariah-compliant arrangements for export and import financing

• Compare Islamic and conventional trade finance and banking products

• Analyse the nature of Shariah-compliant forward foreign exchange transactions and bank guarantees

• Differentiate between conventional and Islamic financial systems and arrangements

• Compare Islamic and conventional financial systems and arrangements