Using Documentary Letters of Credit, Drafts and Bills

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LEIGH COURT, Abbots Leigh, Bristol, City of Bristol, BS8 3RA
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Using Documentary Letters of Credit, Drafts and Bills

The use of Letters of Credit has increased significantly by UK exporters and importers because of the global economic situation, political insecurity in some markets and the withdrawal of credit insurance cover.

75% of documentary submissions by exporters are rejected on first presentation because of non compliance with the conditions of the Letter of Credit

These failures can lead to increased costs for all parties, loss of goodwill, delayed payment and possible default.

To use Letters of Credit effectively importers and exporters will need to fully understand the dynamics and terminology of a Letter of Credit, the role of each party, the importance of the shipping documents and the level of security offered.

This course will examine the Letter of Credit process in detail and offer guidance on how to create a workable credit. It will consider the different interests of the exporter, importer and the banks and methods of reducing the risks for all parties.

It will also discuss methods of creating and collating accurate documents, the role of the draft (Bill of Exchange) and consider the options for negotiation of the credit and the current version of the rules that govern letters of credit (UCP600).

Why attend?

International trade is a very complex subject with many different terms, procedures and regulations. Training is essential to successful trading overseas. 

Who should attend?

This course is suitable for both importers and exporters.The content will be relevant to field and office based sales staff, purchasing staff, shipping and despatch personnel, accounts and finance staff, customer services, freight forwarders. No previous knowledge or experience is necessary and it will be suitable for experienced personnel who require an update on the latest rules.

How will you benefit?

  • Understand the Government's 'Letter of Credit Guarantee Scheme'
  • Stimulate exports to emerging markets by sharing the credit risk associated with Letters of Credit from these markets
  • Avoid being the 75% of documentary submissions by exporters that are rejected on first presentation
  • Get it right first time
  • Significantly reduce lack of understanding, costs for all parties, loss of goodwill, delayed payment and possible default

Programme content
  • Options available for international trade payments
  • Terminology, structure, dynamics and content of a letter of credit
  • Importance of the sales/purchasing contract and its role in creating a workable Letter of Credit
  • The roles and agendas of each of the parties involved in a letter of credit
  • Why documents are required to satisfy the conditions of the Letter of Credit
  • Creation and completion of documents
  • Confirmation of Letters of Credit
  • UCP 600 – The rules for letters of credit
  • Electronic Letter of Credit
  • Methods for the collation and submission of documents
  • Options available in the event of rejection
  • Charges and Commissions - who pays?
  • Various types of Letters of Credit – transferable, back to back, revolving, red clause, standby
  • Bills of Exchange (Drafts)
  • The roles of drafts in conjunction with Letters of Credit
  • The options for negotiation of an Letter of Credit

Training Methods

The trainer will use oral and visual presentations, reference to fictitious and real examples and participatory exercises to illustrate course content. The delegates will receive a copy of the presentation on which notes can be made together with the workbook for future reference.

Continuous Professional Development

This export training course is graded as entry level and would qualify for 10 Continuous Professional Development points. If required, the CPD certificate will be issued by the Institute of Export.