COURSE SYLLABUS



COURSE SYLLABUSInternational settlement Spring 2013 BEIJING NORMAL UNIVERSITY Time: Tues 10:00-12:00 amLocation: No.7 building 302Lecturer: Yang JuanContact Info: yangjuan@bnu.Prerequisite: The students should have some basic knowledge of economics before learning.Overview: The course provides a full explanation of the key finance areas of international trade - including risk management, international payments, currency management, bonds and guarantees, and trade finance. Upon completion of this course, students should be able to: understand how the international transactions are settled and financed: identify the most competitive finance alternatives, how to reduce risks and improve cash flow, structure the best payment terms, minimize finance and transaction costs how these activities are governed and the related international customs and practices. The overall objective of this course is to provide those students who would like to work in companies or banks involved in international sales, finance, shipping and administration a good specialty foundation and a prospective professional future.Learning Goals：Learning GoalDescriptionKnowledgeComprehensivenessStudents will learn a general knowledge about risks involved in international settlement and how to deal with it.Problem-Solving CapabilityThough case study, students can understand the risks involved in real international trade and think about possible and efficient ways to solve it using learned settlement munication Skills and LeadershipEnhance the communication skills and leadership by teamwork , presentation and debates.InnovationAble to integrate economics and management theories and methods into the problems discussed, and put forward the uniqueness of the academic point of view and solve problems.EntrepreneurshipGet the insight of business opportunities in technology and business model development by analysis the financial results of business model innovation, and can successfully carry out business operations.Cross-Cultural Management CapabilityImprove the ability to understand the management ways in different institutional and cultural circumstances, help students to accept and respect cultural differences, and master the skills of cross-cultural communication with international vision.Social ResponsibilityEnhance understanding of social responsibility of default in letter of credit and collection. After learning the new development of settlement, students should build up credit conscious.Teaching Approach:The teaching approach is composed by lectures delivery, case study and classroom discussionsTexts and Materials:1 Yang, Juan, International settlement, Beijing Normal University Press, 20122 David, Hinkelman, A short Course in International Payment, 2nd Edition, World Trade Press, 20033 Anders Grath The handbook of international trade and Finance, Kogan Page Limited 2008 Recommended background textbooksA N Yianopoulos, Ocean Bill of Lading，Kluwer Law International,1995Charles Del Busto. ICC Guide to Documentary Credit Operations for UCP 500: A Stage-by-Stage Presentation of the documentary Credit Process. ICC, the World Business Organization, 1994.Christopher Hill, Maritime Law, Lloyds of London Press Ltd., 4th. Edition,1995 Clive M Schmitthoff, Export Trade, The Law and Practice of International Trade, London Sweet & Maxwell, 2000Hugh M Kindred, Muti-modal Transport Rules, Kluwer Law International, 1997General Rules for International Factoring, 2000Uniform Customs and Practices for Documentary Credits, ICC Publications 600, 2006.Uniform Rules for Collection, ICC Publication 522, 1995.Uniform Rules on Demand Guarantees， ICC Publications 458, 1992International Standard Banking Practices for the Examination of Documents under Documentary Credits（ISBP）, ICC Publication No.681, 2007Uniform Rules for Bank-to-Bank Reimbursements under Documentary Credits, ICC Publication No.725, 2008Official Rules for the Interpretation of Trade Terms (Incoterms 2000), ICC Publication No. 560, 1999International Standby Practice 98 （ISP98）, ICC Publication No. 590, 1998Johan Bergamin. Payment Techniques in Trade Finance. ING Barings, 1999John S. Gordon. Export/Import letters of Credit and Payment Methods: Making Payments in International Trade. 2nd edition. Global Training Center, Inc. Dayton, 2002Paul Todd, Cases and Materials on Bills of Lading, BSP Professional Books, 1990R H Brown, Dictionary of Marine Insurance Terms and Clauses, Witherby & Co Ltd, 1989UNCTAD/ICC rules for Mulitmodel Transport DocumentsWim Albert Timmermans, Carriage of Goods by Sea in the Practice of the USSR Maritime Arbitration Commission, Martinus Nijhoff Publishers, 1991Required Readings:No required readings before the classGrading:10% attendance + 10% course performance + 40% Assignments (presentation) +40% final examThe course requires students to analyze a real case of international settlement by collecting related materials and present it to other studentsmark 90-100, exceptional, 80-89 good, 70-79 satisfactory, 60-69 unsatisfactory, below 60 failingCourse Schedule:chapter 1:General Introduction 2 hoursThe definition of international trade settlement, international non-trade settlement, visible trade, invisible trade.Characteristics of the evolution of international settlementSWIFT, CHIPS, CHAPS, TARGET, CNAPS, FEDWIRE Players and their roles in international tradeFactors considered by an exporter in making payment decisionsTypes of payment techniquesRelated customs and practice, banking institutionschapter 2:Instruments of international settlement 2 hoursBroadly and narrowly defined negotiable instrument; characteristics of negotiable instruments: negotiability, unconditional promise or order to pay, requisite in form, non-causative nature; functions of negotiable instruments; negotiable instrument laws；parties to a negotiable instrument; the relationship of the parties to a negotiable instrumentBills of exchange; essential items required in a bill of exchange; acts relating to a bill of exchange; classification of bills of exchangePromissory notes; essential items of a promissory note; joint notes; joint and several notes; difference between a bill and a note; types of notesCheques; essential items of a cheque, types of cheques, differences between a bill and a chequechapter 3:Remittance 2 hoursRemittance Basic parties to a remittance: remitter, remitting bank, paying bank and payee or beneficiaryTypes of remittance: mail transfer, telegraphic transfer and demand draftReimbursement of remittance coverApplication of remittance in international trade: cash in advance, open account and consignmentChapter 4Collection 2hoursCollection; URC522; Basic Parties to a Collection: Principal/drawer, remitting bank, collecting bank, presenting bank, and drawee; Types of collection: clean collection and documentary collectionTerms of Releasing documents: D/P, D/A, D/P after sightDirect collectionProcedures of a documentary collection transactionBanks’ liabilities and disclaimers under a collectionFinancing provided by banks under a collection: negotiation, advance against collection, trust receipt, and release of goods against guarantee. Problems frequently arising from collectionChapter 5Letters of Credit 12 hoursGeneral Introduction of Letter of CreditCharacteristics of a letter of credit: a written undertaking on the part of the issuing bank, independent of the sales contract, exclusively dealing with documentsParties to a letter of credit: applicant, issuing bank, beneficiary, advising/transmitting bank, confirming bank, paying/accepting bank, negotiating bank, claiming bank, reimbursing bankProcedures of a documentary credit operationContents of a letter of credit: items on the credit itself, items on draft, items on goods, shipping documents and transport, other itemsExamination of a documentary credit: establishing the authenticity of the authorized signature or the test key; investigating the creditworthiness of the issuing bank; investigating the credit rating of the country where the issuing bank resides; checking the liability clause of the transmitting bank, if any; checking the credit rating of the transferring bank; checking the credit itselfTypes of credit: revocable credit; irrevocable credit; confirmed irrevocable credit; sight payment credit; acceptance credit; buyer’s acceptance credit; deferred payment credit; negotiation credit; straight credit; anticipatory credit; transferable credit; back-to-back credit; revolving credit; reciprocal credit; standby creditFinancing Provided by Banks: negotiation; packing loan; credit line approved to the importer by the issuing; inward bill purchasing; trust receipt; delivery of the goods against bank guaranteeLetters of credit and other payment methodsChapter 6Standby Letters of Credit 2 hoursMeaning of standby creditDifferences between a standby L/C and a commercial L/C; UCP 500 vs. ISP98 Characteristics of a standby L/C: clean L/C; financial obligation; non-financial obligation; irrevocable form; duration and amount; payment proceduresTypes of standby L/C: performance standby; advance payment standby; bid bond/tender bond standby; counter standby; financial standby; direct pay standby; insurance standby; commercial standbyChapter 7Bonds and Guarantee 2 hoursGeneral introduction of bank guarantee; Uniform Rules for Demand Guarantees; Uniform Rules for Contract Guarantees Basic parties to a letter of guarantee: applicant/principal; beneficiary; guarantor; advising or transmitting bankDirect and Indirect GuaranteeTypes of guarantees: tender guarantee/bid bond; performance guarantee; repayment guarantee; advance payment guarantee; maintenance guarantee; retention money guarantee; counter guaranteeContents of a bank guarantee: basic contents of a bank guarantee; basic contents of a counter guarantee; additional clauses of a bank guarantee: validity clause, reduction of the value clause, authentication clause, legal clause, automatic extension clause, no change or addition clause, joint and several liability clause, interest clause, return clause, non-negotiable clause, assignment of proceeds clause, unconditional to pay clause, no deduction clause, primary obligor clause.Procedures of a bank guarantee operationChapter 8International Factoring 2 hoursOrigin and evolution of factoring General introduction of factoring; general rules for international factoring Basic Parties and procedures of international factoring (supplier, debtor, export factor, import factor) Types of factoring: maturity factoring and financed factoring, disclosing factoring and undisclosed factoring, single factoring and co-factoringServices provided to the exporter by a factor: credit investigation; collection of proceeds; maintenance of the sales ledger; risk protection; payment on accountLegal Framework for Factoring TransactionThe Role of Factoring in International TradeFactoring and its Prospects in ChinaChapter 9International Forfaiting 2 hoursThe evolution of forfaiting The meaning of forfaiting; parties to a forfeiting finance transaction; characteristics and documentation of forfaiting, including evidence of debts, evidences of the commercial transaction and guarantee; costs of forfaiting finance?????? The Procedures of a Forfaiting TransactionPrimary and Secondary Forfaiting MarketsForfaiting vs. Other Trade Financing Methods: forfaiting vs. officially supported export credits; forfaiting vs. factoring; forfaiting vs. invoice discountingForfaiting in ChinaChapter 10Documents 4 hoursTypes of documents; roles of documents: representing the title to the ownership of the goods and evidencing the fulfillment of obligationDrafts drawn under a letter of credit: characteristics of drafts( requisite form, compliance with the credit); examination of drafts drawn under a letter of credit; frequently found discrepancies with draftsCommercial Invoices: contents of commercial invoices( heading, body, complementary clause); frequently found discrepancies with invoices; other invoices( proforma invoice, customs invoice, consular invoice) Bills of lading; basic parties to a bill of lading; main contents of a bill of lading; types of bills of lading; frequently found discrepancies with a bill of lading; other transport documents: airway bill, railway billInsurance documents: types of marine cargo transport insurance; checking of an insurance policy under a letter of creditCertificates of Origin: GSP Certificate of Origin Form A; CCPIT Certificate of Origin; Certificate of Origin issued by the exporterInspection CertificateOther documents: packing list and weight list, cable copy, beneficiary statement, shipping company’s certificate ................
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