Chapter 1 General introduction

单击此处编辑母版标题样式,单击此处编辑母版文本样式,第二级,第三级,第四级,第五级,*,International Trade Finance,主讲：陈建新,chenjianxin1969,Trade & Finance Definition,International trade,refers to countries around the world exchange of goods and services activities.,Trade:,Study on the law of world,commodity flow,Finance:,Study on the law of world,capital flow,While international,trade,has been present throughout much of history (see,Silk Road,), its economic, social, and political importance has been on the rise in recent centuries.,Without international trade, nations would be limited to the goods and services produced within their own borders.,Exercise:,Its international trade or domestic trade between Wuxi and,Hongkong,?,Please talking about the difference between international,trade,and,domestic trade,?,such as,tariffs, time costs due to border delays and costs associated with country differences such as language, the legal system or culture.,International finance is the branch of economics that studies the dynamics of exchange rates, foreign investment, and how these affect international trade.,Key principal,in all business :,- maximize sales &,profits,and,managing,risk,& reducing exposure,Risks,in international transactions include:,- legal risk,- political risk,- marketing risk,-,nancial,risk,Risk,in international trade,nance,:,-,non-payment,-,incorrect goods,received,-,currency issues,Most financial risk,can be,Minimized,or,eliminated,with good,contracts,and,planning,Assignments 1,Please talking about the difference:,risk , danger , insurance,Chapter One General Introduction,1.1 Origin and development of international settlement,1.2 Basis and conditions of inter-national settlement,1.3 International payment systems,1.1,Origin and development of international settlement,Basic concepts and content of international settlement,Evolution of international concept,Characteristics of modern international settlements,1.1.1 Basic concepts and content of international settlement,Basic Concepts,kinds,Basic content,the,financial activities,conducted,among different countries,in which payments are effected or funds are transferred from one country to another in order to,settle accounts, claims and debts that have,emerged in the course of political, economic or cultural contacts among them.,Concept of International Settlement,Trade settlement:,payments for,visible trades,Non-trade settlement,:,1、,invisible trade,settlement,：,payments for services, technology transfer, patents and copyright contracts, etc,Kinds of international settlement,2、,financial transaction settlement：,buying and selling of financial assets,overseas money-raising,and investing,3、,payments between governments:,aids and grants,4、,others: overseas remittances, inheritances, etc,Negotiable instruments or,financial documents,:,bills of exchange,promissory notes,checks,Basic content of international settlement,Payment methods,:,remittances,collections,letters of credit,standby letter of credit,bank guarantees,international factoring,forfaiting,Commercial documents:,bills of lading,insurance policies,certificates of origin,packing list,invoice,bill of exchange,etc,From cash settlement to non-cash settlement,From goods trading to documents trading,From direct payment between traders to payment effected through a financial intermediary,safety, high efficiency, low cost, standardization,From payments under simple price terms to payments under more complex price terms,Settlement through the Internet,1.1.2 Evolution of international settlement,Transfer of foreign exchange funds and conveyance of messages are very much facilitated due to international banking network connected with electronic telecommunication,International lending and financing is closely combined with international payments,More diversified vehicle currencies,Greater importance is attached to high efficiency on the part of the foreign exchange banks.,1.1.3 Characteristics of modern,international settlements,1.2 Basis and conditions of international settlement,Correspondent banks,Some organizations relevant to international settlement,Banking institutions,Definition of correspondent bank,Services provided by correspondent bank,Control documents,Inter-bank accounts,How to select the best bank,1.2.1Correspondent banks,Foreign branch bank,Correspondent bank,Representative office,Agency,Subsidiary bank,Affiliate bank,Consortium bank,Banking institutions,Correspondent bank,the basis for cooperation of commercial banks all over the world to fulfill international settlement,“a bank having direct connection or friendly service relations with another bank.”,Definition of correspondent bank,Collecting checks, drafts, and other credit instruments;,Making loan or investments as agents for their customer bank;,Making credit investigations on firms that borrow in open market;,Providing banks with foreign exchange facilities;,Providing banks with funds/loans in case of need.,Services provided by correspondent bank,Correspondent arrangement,Control documents,Specimen of authorized signatures,Telegraphic test key/SWIFT authentic key,Schedule of terms and conditions,Establishment of a,correspondent bank,Nostro,and,vostro,account,Samples of reimbursement methods,eg,: “In cover, we have credited the sum to your account with us.”;,“Please debit the sum to account with you.”,“in cover, we have authorized Bank of China, Beijing to debit our account and credit your account with them.”,Inter-bank accounts,reputation and creditworthiness;,size and financial status;,location;,services offered by it;,polices and strength of it;,physical features and personnel;,momentum of early start,Selecting a correspondent bank,1.2.2. Some organizations relevant to international settlement,IMF,The World Bank Group,The International Chamber of Commerce,The ICC Commission on Banking Technique and Practice,1.3 International payment systems,Brief introduction,Some major payment system,1.3.1 Brief Introduction,Definition of payment system,Clear principles,A payment system is the means whereby cash value is transferred between a payers bank account and a payees account. It includes:,1) policies and procedures, including rules for crediting and debiting balance;,2) a medium for storing and transmitting payment information;,3) financial intermediaries for organizing information flow, carrying out value transfer instructions, and generally administering payment activities.,Definition of payment system,Clearing principles,paying bank,receiving bank,A,B,C,D,E,Sum of receivable,Net debit,A,0,20,10,20,50,100,B,20,0,20,30,30,100,0,C,20,10,0,30,40,100,D,10,30,20,0,40,100,10,E,10,40,20,30,0,100,60,Sum of payable,60,100,70,110,160,500,Net credit,40,0,30,70,1.3.2 Some major payment system,SWIFT,Society for worldwide inter-bank financial telecommunication,established in 1973,advantages:,faster, more reliable communication;,reduced transaction errors;,lower transmission costs;,greater efficiency;,better statistics;,increased security,CHIPS,CHAPS,TARGET,Fed Wire,As to negotiable instruments, there are three laws used worldwide today:,Uniform Law for Bills of Exchange and Promissory Notes of Geneva of 1930;,UK Bills of Exchange Act of 1882;,US Uniform Commercial Code of 1962;,1.3.3 Related international customs,and practice,For documentary collections, documentary credits, standby credits, or guarantees, the applicable international customs and practices are:,Uniform Rules for Collection, ICC Publication No.522;,Uniform Customs and Practice for Documentary Credit, ICC Publication No.600;,UCP Supplement for Electronic Presentation;,International Standard Banking Practice for examination of documents under documentary credits, ICC Publication No.645,International Standby Practice 98 (ISP98);,Uniform Rules for Demand Guarantees, ICC Publication No.458;,Uniform Rules for Contract Guarantees, ICC Publication No.325;,General Rules for International Factoring.,In addition, there are international conventions for bills of lading, such as:,Hague Rules;,Visby Rules; and,Hamburg Rules.,International practice,International practice refers to the customary practice with the fixed content from formation of long-term,Feature :,1, itself is not a legal,2, have a strong role in practice,3, practice-based treaty,