INTERNATIONAL TRADE

Course 5 Yudy Yunardy S.E., M.M.

WHO AM I ?

Fifteen years of Banking experience, six years’ experience in Trade Finance Operations background with Unsecured Loan experience, equipped with another seven years’ experience in Management Information Analyst and Dashboard Reporting. Vastly experienced in Bank Indonesia reporting (LBU, SID, LBBU, BMPK etc.)

EMPLOYMENT SUMMARY

2014 Present Indonesia Banking School

2013 2014 Deutschebank AG

2011 2012 Misys Plc

2010 2011 DBS Indonesia

2010 2010 ANZ Bank

2005 2010 RBS Bank

2004 2005 Vendor at Bank Mandiri, BCA and Circle K

1999 2004 HSBC Bank

1998 1999 MetLife Insurance

1997 1998 Demographic Institution FEUI

1996 1997 Private Investment Manager

RULES

1.Disable your comm. device2.Presence 80% minimum3.Time alloc. 08.00 – 10.30

TEXTBOOK

Koch, Timothy (2015), Bank Management, The Dryden Press

GRADING EVALUATION

1. Participation 5%2. Quiz / exercise 10%3. Assignment 15%4. Midterm 35%5. Final 35%

PREVIOUSLY…

EXPORT LC PAYMENT MECHANISM

1. MT 700 (LC itself)

2. MT 705 (LC pre-advice)

3. MT 707 (LC Amendment)

ADVISING BANK RECEIVE

1. This message is sent by the issuing bank to the

advising bank

2. It is a brief advice of a documentary credit, the full

details of which will follow

3. The pre-advice is not an operative credit

instrument. Unless otherwise stated, the issuing

bank must forward the operative credit

instrument, ie, MT 700 Issue of a Documentary

credit, without delay

MT 705

MT 705

MT 705

SENDER: ABC BANK, MELBOURNE, AUSTRALIA

RECEIVER: IOB, MUMBAI, INDIA

:27: SEQUENCE OF TOTAL 1/1

:40A: FORM OF DOCUMENTARY CREDIT IRREVOCABLE TRANSFERABLE

:20: DOCUMENTARY CREDIT NUMBER EL20088033319

:31C: DATE OF ISSUE 150105

:40E: APPLICABLE RULES UCP LATEST VERSION

:31D: DATE AND PLACE OF EXPIRY 150609 OPENING BANKS COUNTERS

:50: APPLICANT HOT AND SPICY PTE LTD

240 YARROWEE STREET

SEBASTOPOL

VICTORIA, AUSTRALIA 3356

TRADE CYCLE

ISS.BANK

IMPORTER

ADV.BANK

EXPORTER

S C

4. Goods

1. Apply

LC

9. Uang

10. Docs

7. Uang

2. Issued LC

6. Docs

8. Uang

5. Docs

3. A

dvis

e L

C

MT 707

MT 707 Amendment to a Documentary Credit

Status Tag Field Name

M 20 Sender's Reference

M 21 Receiver's Reference

O 23 Issuing Bank's Reference

O 52a Issuing Bank

O 31C Date of Issue

O 30 Date of Amendment

O 26E Number of Amendment

M 59 Beneficiary (before this amendment)

O 31E New Date of Expiry

O 32B Increase of Documentary Credit Amount

O 33B Decrease of Documentary Credit Amount

O 34B New Documentary Credit Amount After Amendment

O 39A Percentage Credit Amount Tolerance

O 39B Maximum Credit Amount

O 39C Additional Amounts Covered

O 44A Place of Taking in Charge/Dispatch from .../ Place of Receipt

O 44E Port of Loading/Airport of Departure

O 44F Port of Discharge/Airport of Destination

O 44B Place of Final Destination/For Transportation to.../ Place of Delivery

O 44C Latest Date of Shipment

O 44D Shipment Period

O 79 Narrative

MT 707Sender ESSESESS

Message Type 707

Receiver GEBABEBB

Message Text

Sender's Reference :20:DC.IMP 3410/3444

Receiver's Reference :21:NONREF

Date of Issue :31C:030517

Date of Amendment :30:030521

Number of

Amendment

:26E:01

Beneficiary :59:PROQUINAL S.A.

48 RUE DE LA BOURSE

BRUSSELS

New Date of Expiry :31E:030930

Increase of D/C :32B:USD3250,

New D/C Amount :34B:USD34750,

Narrative :79:BILLS OF LADING TO BE ISSUED NOT

LATER THAN 20 SEPTEMBER 2003

TRADE CYCLE - AMENDMENT

ISS.BANK

IMPORTER

ADV.BANK

EXPORTER

S C

9. Goods

1. Apply

LC 1

4. U

ang

15

. Docs

12. Uang

2. Issued LC

11. Docs

13

. U

ang

10

. D

ocs

3. A

dvis

e L

C

4. R

eq A

md

5. Req Amd

6. Apply

Am

d

7. Issued Amd

8. A

dvis

e A

md

MT 754 (Advice of Payment,

Acceptance or Negotiation)

ADVISING BANK RECEIVE PAYMENT

MT 754 SAMPLE

Sender DEUTDEMM

Message Type 754

Receiver CHEMUS33

Message Text

Sender's Reference :20:CL934372

Related Reference :21:IMP 693/70224

Principal Amount Paid :32A:030817EUR95000,

Charges Added :73:COMMISSION EUR200,

Total Amount Claimed :34A:030817EUR95200,

Reimbursing Bank :53A:CHEMDEFF

End of Message Text/Trailer

DOCUMENTS CHECKING

MT 700

MT 700

SENDER: ABC BANK, MELBOURNE, AUSTRALIA

RECEIVER: IOB, MUMBAI, INDIA

:27: SEQUENCE OF TOTAL 1/1

:40A: FORM OF DOCUMENTARY CREDIT IRREVOCABLE TRANSFERABLE

:20: DOCUMENTARY CREDIT NUMBER EL20088033319

:31C: DATE OF ISSUE 150105

:40E: APPLICABLE RULES UCP LATEST VERSION

:31D: DATE AND PLACE OF EXPIRY 150609 OPENING BANKS COUNTERS

:50: APPLICANT HOT AND SPICY PTE LTD

240 YARROWEE STREET

SEBASTOPOL

VICTORIA, AUSTRALIA 3356

MT 700

:59: BENEFICIARY AACHI MASALA PTY LTD

41, NORTH CAR STREET,

CHENNAI, INDIA-600007

:32B: CURRENCY CODE, AMOUNT AUD 60,000.00

:41D: AVAILABLE WITH ANY BANK BY NEGOTIATION

:42C: DRAFT AT SIGHT

:42A: DRAWEE ABC BANK, MELBOURNE, AUSTRALIA

:43P: PARTIAL SHIPMENTS NOT ALLOWED

:43T: TRANSHIPMENTS ALLOWED

:44E: PORT OF LOADING ANY INDIAN PORT

:44F: PORT OF DISCHARGE ANY AUSTRALIAN PORT

:44C: LATEST SHIPMENT DATE 150525

MT 700

:45A: DESCRIPTION OF GOODS MANGO PICKLE, GARLIC PICKLE,

SAMBAR POWDER, RASAM POWDER,

DHAL POWDER AS PER PERFORMA

INVOICE NO 123456.

CFR AUSTRALIA

:46A: DOCUMENTS REQUIRED

1. SIGNED COMMERCIAL INVOICE

2. 3/3 CLEAN ON BOARD BL MADE OUT TO ORDER OF ABC BANK AND MARKED FREIGHT PREPAID EVIDENCEING NOTIFY PARTY AS APPLICANT.

3. CERTIFICATE OF ORIGIN ISSUED BY LOCAL CHAMBER OF COMMERCE

MT 700

:47A: ADDITIONAL CONDITIONS

1. A COPY OF ALL DOCUMENTS TO BE SENT TO APPLICANT WITHIN 5 DAYS AFTER SHIPMENT DATE

2. THIRD PARTY DOCUMENTS ACCEPTABLE

3. ALL DOCUMENTS TO BE FORWARDED TO ABC BANK, MELBOURNE, AUSTRALIA IN TWO LOTS BY BLUE DART COURIERS.

4. CHARGES ADDITIONAL TO FREIGHT NOT ACCEPTABLE

5. THIS LC IS TRANSFERRABLE BY INDIAN OVERSEAS BANK, TIRUNELVELI, INDIA

:71B: CHARGES ALL BANK COMMISSIONS AND CHARGES OUTSIDE AUSTRALIA, PLUS

ADVISING AND REIMBURSING COMMISSIONS, ARE FOR THE ACCOUNT OF THE

BENEFICIARY.

:48: PERIOD FOR PRESENTATION DOCUMENTS TO BE PRESENTED WITHIN 15 DAYS AFTER THE DATE OF SHIPMENT BUT WITHIN THE CREDIT VALIDITY.

:49: CONFIRMATION INSTRUCTIONS WITHOUT

:57A: ADVISE THROUGH BANK INDIAN OVERSEAS BANK, TIRUNELVELI, INDIA

COVERING SCHEDULE

DRAFT

COMMERCIAL INVOICE

CERTIFICATE OF ORIGIN

DOCUMENTS CHECKING RESULT

1. Clean documents (comply with LC terms)

2. Discrepanci(es), there’s one or more discrepant in the documents according to LC terms. In this case bank could ask for revision from exporter OR send the documents and asking for acceptance to issuing bank

TRADE FINANCING ON EXPORT LC

After the seller has submitted his documents to the

Bank (for the case of sight bill) or obtained

acceptance on the bill of exchange by the issuing

bank (for the case of term bill), he may request for

bills purchased/discounting to obtain working capital

prior to getting payment from the issuing bank. In the

event of default in payment or documents being

rejected by the issuing bank, the Bank may seek

reimbursement from the seller

FINANCING ON EXPORT

1. Export LC negotiation amount is the amount applied for negotiation

deducted by all the estimated negotiation interest and bank

commissions

2. The tenor of export negotiation starts from the date of negotiation by

the bank and ends by the date the bank receives payment from the

issuing bank. Export negotiation under sight letter of credit shall not

exceed 21 days principally. For usance letter of credit the tenor shall not

exceed five working days after the acceptance date by the issuing

bank

3. The negotiation currency should be the original currency of the draft

under letter of credit

4. The interest rate for export negotiation shall be determined according to

the situation on international financial markets, the funding costs of our

bank and creditworthiness of the issuing bank

NEGOTIATION LC

FEES AND CHARGES

FEES AND CHARGES

THANK YOU AND GOODBYE