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Expert Commentaries

  • Guarantees versus standby letters of credit

    Approaches to standby letters of credit (standbys) and guarantees differ in different parts of the world. People perceive things differently, and that has an impact on how practice evolves. Take for example the Americas where standbys are generally used when issuing a guarantee undertaking. In Europe, however, (and for that matter in other parts of the world) guarantees serve the same purpose.

    If you ask a banker, an exporter, an international cargo insurance specialist, a carrier or a freight forwarder, what the biggest problem is when d...
  • Supply Chain Finance – a case study

    The article by Carlos Bacigalupe in the last edition of Trade Brief highlighted the advantages of Supply Chain Finance (SCF) and in particular how new methods of funding trade via SCF and Trade Receivable programmes are greatly assisting the improvement in liquidity and working capital for both buyer and supplier alike. Whilst it is true that since its inception some ten years ago SCF is primarily used in developed countries, such is the growing popularity of SCF with key multinational buyers that many suppliers located in emerging markets are now beginning to benefit financially from the introduction of SCF programmes.
  • Pumping Private Money into Trade Activities

    Traditionally, trade finance has been provided to import/export companies by banks and/or other financial institutions. Such dependency of the financial sector adversely affects to both importers and exporters in their needs to get either funding or credit, especially in downturn times. Actually, in any financial crisis, the inevitable shortage of cash and credit imposed by banks to their clients implies an additional burden to producers and/or manufacturers adding such lack of financing to the problems experienced by the effect of the crisis. We all know examples of companies that have been forced to reduce their activity, or even close, by the lack of liquidity or credit necessary to continue operations.
  • Muddying the export waters

    Muddying the export waters The row boiling up in Washington over the „no‟ vote on America‟s ExIm Bank charter and lending cap extension has made h...
  • Notations and Multimodal Transport Documents

    In the autumn 2009 issue of DCInsight, Haluk Erdemol tackled on board notations as they apply to a B/L and multimodal transport documents (multimodal bills of lading). This is perhaps the most controversial issue that has emerged in UCP 600 so far, and his article was an excellent contribution to the ongoing debate, which hopefully will be resolved some time soon. Here I would like to add some personal comments. Bill of lading First, it is unfortunate that this confusion took place, as it was, in my view, clearly avoidable.
  • Financing Options for Exporters – Nigerian Perspective

    Nigeria is an emerging economy with high growth potential. Unfortunately, most of it remains untapped due to many exportable commodities being neglected, as the federal government’s main focus is the exploration and exportation of crude oil. In addition, the government and financial institutions have so far given little or no attention to developing commodity export in terms of policy implementation and export financing, respectively.
  • The DOC CREDIT CLINIC – ‘Can you tolerate this?’

    In our regular section, Vincent O'Brien tackles queries from our readers.
  • Cash Crunch

    It is apparent that business can fail – over time – due to declining profitability. Furthermore, failure can stem from a lack of readily available cash, and poor short term cash flow can be ruinous, irrespective of whether or not the overall business is profitable. 

  • The “fraud exception” and the L/C independence principle

    The “fraud exception” and the L/C independence principle As L/C practitioners know, the documentary credit is a bank’s undertaking to pay against ...
  • Perhaps it’s time for a URC 522 revision

    One of the most valuable activities of the ICC Banking Commission is, without any doubt, the constant updating of the International Rules that the...
  • Doc Credit – Letter of Credit : Stamp it out!

    eBSI Faculty Experts answer more technical queries from our readers!