Rules for trade products, UCP 600, ISP 98, URC 522, URR 725, URDG 758, Import LC Payment Mechanism, Trade cycle amendment, Trade fees and charges

1. INTERNATIONAL TRADE
Course 4 Yudy Yunardy S.E., M.M.

2. 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.)

3. 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

4. RULES
1.Disable your comm. device
2.Presence 80% minimum
3.Time alloc. 08.00 – 10.30

5. TEXTBOOK
Koch, Timothy
(2015), Bank
Management,
The Dryden Press

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

7. LAST WEEK’S EXERCISE
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 150609
:40E: APPLICABLE RULES UCP LATEST VERSION
:31D: DATE AND PLACE OF EXPIRY 150105 OPENING BANKS COUNTERS
:50: APPLICANT HOT AND SPICY PTE LTD
240 YARROWEE STREET
SEBASTOPOL
VICTORIA, AUSTRALIA 3356

8. LAST WEEK’S EXERCISE
: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 NOT ALLOWED
:44E: PORT OF LOADING ANY INDIAN PORT
:44F: PORT OF DISCHARGE ANY INDONESIAN PORT
:44C: LATEST SHIPMENT DATE 150525

9. LAST WEEK’S EXERCISE
:45A: DESCRIPTION OF GOODS CUTE 15 YEARS OLD GIRLS, RPG,
FLAMETHROWER, M-16, AR-15,
KALASHNIKOV AK-47,
INVOICE NO 123456.
CIF 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

10. PREVIOUSLY…

11. RULES FOR TRADE PRODUCTS

12. 1. Uniform Customs & Practice (UCP 600)
2. International Standby Practices (ISP 98)
3. Uniform Rules for Collections (URC 522)
4. Uniform Rules for Bank-to-Bank
Reimbursements (URR 725)
5. Uniform Rules for Demand Guarantees
(URDG 758)
RULES FOR TRADITIONAL TRADE
PRODUCTS

13. 1. Article 8 and 6 (part) which
refer to revocable LC was
removed
2. Article 38 ‘Other documents’
was removed
3. Article 5 and 12 was removed
UCP 600 VS UCP 500

14. UCP 600

15. 1. General Provisions
2. Liability
3. Examination
4. Documents
5. Misc Issues
6. Disclaimers
7. Transfer & Assignment
UCP 600

16. 1. Article 1 Application of UCP
2. Article 2 Definitions
3. Article 3 Interpretations
4. Article 4 Credits v. Contracts
5. Article 5 Documents v. Goods,
Services or Performance
UCP 600 – GENERAL PROVISIONS

17. 6. Article 6 Availability, Expiry Date and Place for
Presentation
7. Article 7 Issuing Bank Undertaking
8. Article 8 Confirming Bank Undertaking
9. Article 9 Advising of Credits and Amendments
10. Article 10 Amendments
11. Article 11 Teletransmitted and Pre-Advised
Credits and Amendments
12. Article 12 Nomination
13. Article 13 Bank-to-Bank Reimbursement
Arrangements
UCP 600 – LIABILITY

18. 14. Article 14 Standard for Examination
of Documents
15. Article 15 Complying Presentation
16. Article 16 Discrepant Documents,
Waiver and Notice
17. Article 17 Original Documents and
Copies
UCP 600 – EXAMINATION

19. 18. Article 18 Commercial Invoice
19. Article 19 Transport Document
Covering at Least Two Different Modes
of Transport
20. Article 20 Bill of Lading
21. Article 21 Non-Negotiable Sea Waybill
22. Article 22 Charter Party Bill of Lading
UCP 600 – DOCUMENTS

20. 23. Article 23 Air Transport Document
24. Article 24 Road, Rail or Inland Waterway
Transport Documents
25. Article 25 Courier Receipt, Post Receipt or
Certificate of Posting
26. Article 26 "On Deck", "Shipper's Load and
Count", "Said by Shipper to Contain" and
Charges Additional to Freight
27. Article 27 Clean Transport Document
28. Article 28 Insurance Document and Coverage
UCP 600 – DOCUMENTS

21. 29. Article 29 Extension of Expiry Date or Last
Day for Presentation
30. Article 30 Tolerance in Credit Amount,
Quantity and Unit Prices
31. Article 31 Partial Drawings or Shipments
32. Article 32 Instalment Drawings or
Shipments
33. Article 33 Hours of Presentation
UCP 600 – MISC ISSUES

22. 34. Article 34 Disclaimer on
Effectiveness of Documents
35. Article 35 Disclaimer on Transmission
and Translation
36. Article 36 Force Majeure
37. Article 37 Disclaimer for Acts of an
Instructed Party
UCP 600 – DISCLAIMERS

23. 38. Article 38 Transferable Credits
39. Article 39 Assignment of
Proceeds
UCP 600 – TRANSFER &
ASSIGNMENT

24. ISP 98

25. 1. RULE 1: GENERAL PROVISIONS
2. RULE 2: OBLIGATIONS
3. RULE 3: PRESENTATION
4. RULE 4: EXAMINATION
5. RULE 5: NOTICE, PRECLUSION, AND
DISPOSITION OF DOCUMENTS
ISP 98

26. 6. RULE 6: TRANSFER, ASSIGNMENT, AND
TRANSFER BY OPERATION OF LAW
7. RULE 7: CANCELLATION
8. RULE 8: REIMBURSEMENT OBLIGATIONS
9. RULE 9: TIMING
10. RULE 10: SYNDICATION/PARTICIPATION
ISP 98

27. URC 522

28. A. General Provisions and Definitions
B. Form and structure of collections
C. Form of presentation
D. Liabilities and responsibilities
E. Payment
F. Interest charges and expenses
G. Other provision
URC 522

29. 1. Applications of URC 522
2. Definition of collection
3. Parties to a collection
GENERAL PROVISIONS AND
DEFINITIONS

30. 4. Collection instruction
FORM AND STRUCTURE OF
COLLECTIONS

31. 5. Presentation
6. Sight/Acceptance
7. Release of commercial
documents
8. Creation of documents
FORM OF PRESENTATION

32. 9. Good faith and reasonable care
10. Documents vs goods/services/ performances
11. Disclaimer for acts of an instructed party
12. Disclaimer on documents received
13. Disclaimer on effectiveness of documents
14. Disclaimer on delays, loss in transit and
translation
15. Force majeure
LIABILITIES AND RESPONSIBILITIES

33. 16. Payment without delay
17. Payment in local currency
18. Payment in foreign currency
19. Partial payments
PAYMENT

34. 20. Interest
21. Charges and expenses
INTEREST CHARGES AND EXPENSES

35. 22. Acceptance
23. Promissory notes and other
instruments
24. Protest
25. Case-of-need
26. Advises
OTHER PROVISIONS

36. URR 725

37. A. General Provisions and Definitions
B. Liabilities and responsibilities
C. Form of notification of
authorisations, amendments and
claims
D. Miscellaneous provisions
URR 725

38. 1. Applications of URR 725
2. Definitions
3. Reimbursement
authorisations versus credits
GENERAL PROVISIONS AND
DEFINITIONS

39. 4. Honour of a reimbursement
claim
5. Responsibility of the issuing
bank
LIABILITIES AND RESPONSIBILITIES

40. 6. Issuance and receipt of a reimbursement
authorization or reimbursement amendment
7. Expiry of a Reimbursement Authorization
8. Amendment or Cancellation of Reimbursement
Authorization
9. Reimbursement undertaking
10. Standards for a Reimbursement Claim
11. Processing a Reimbursement Claim
12. Duplications of a Reimbursement Authorization
FORM OF NOTIFICATION OF
AUTHORISATIONS, AMENDMENTS AND
CLAIMS

41. 13. Foreign Laws and Usages
14. Disclaimer on the Transmission of
Messages
15. Force Majeure
16. Charges
17. Interest Claims/Loss of Value
MISCELLANEOUS PROVISIONS

43. IMPORT LC PAYMENT MECHANISM

44. TRADE CYCLE - SIGHT
ISS.BANK
IMPORTER
ADV.BANK
EXPORTER
S C
4. Goods
1.ApplyLC
9. Uang
10. Docs
7. Uang
2. Issued LC
6. Docs
8. Uang
5. Docs
3.AdviseLC

45. UCP 600 Article 7 Issuing bank
undertaking
ISSUANCE LC

46. 1. UCP 600 Article 9 Advising of
Credits and Amendments
2. UCP 600 Article 10
Amendments
AMENDMENT LC

47. TRADE CYCLE - AMENDMENT
ISS.BANK
IMPORTER
ADV.BANK
EXPORTER
S C
9. Goods
1.ApplyLC
14.Uang
15.Docs 12. Uang
2. Issued LC
11. Docs
13.Uang
10.Docs
3.AdviseLC
4.ReqAmd
5. Req Amd
6.ApplyAmd
7. Issued Amd
8.AdviseAmd

48. UCP 600 Article 16 Discrepant
Documents, Waiver and Notice
DISCREPANT DOCUMENTS

49. 1. In UCP 600 there is no major
or minor discrepancies
2. Strike through
3. Correction
4. Typo
DISCREPANT DOCUMENTS

50. 1. Latest delivery date (at BL or
AWB)
2. LC Expiration date
3. Latest presentation date
(UCP 600 Art.29)
DISCREPANT DATES

51. A document that allows a customer
to take possession of shipped goods
before the shipping company
receives the bill of lading,
indemnifying the shipping company
from any loss in case the customer
fails to pay
SHIPPING GUARANTEE

52. 1. Will require cash margin
and/or
2. Promissory note
SHIPPING GUARANTEE

53. 1. Reduction of capital tied up. Pick up and resell
goods in advance with bank credit in order to
speed up circulation of capital and reduce
capital tied up.
2. Grasp market opportunities. It will assist
importers in obtaining documents of title to
goods, picking up and reselling goods in case
of arrival of goods prior to documents.
3. Less financial expense. Importers can pick up
goods in time to avoid demurrage charge.
SHIPPING GUARANTEE BENEFITS

54. FEES AND CHARGES

55. FEES AND CHARGES