Accessible Credit Risk Tools for Chinese Executives

T3P LIMITED is pleased to advise that the Chinese language (Mandarin Simplified Characters) version of Global Credit Management - an Executive Summary is available.

The Authors are grateful to have had this opportunity to make such key information accessible to Mandarin literate executives and students. The original English text was adapted prior to translation in order to ensure it would be understood in the reader’s context.

This book is ideal for Chinese business executives of all types; Chief Executives (CEOs), Chief Financial Officers (CFOs), Treasurers, Credit Managers, Entrepreneurs starting or running their own businesses, and students of business practice preparing to face the tough challenges of business management.

It has been designed to provide the essential basic information needed to understand payment risk management in a domestic and international setting, with the addition of a practical tool kit covering the essential aspects.

Above all it is easy to read, Dr Jing Zhang commented; "I have enjoyed greatly reading this book as it has presented this complex subject in a very light and lively manner. The authors have summarised the entire world of credit management within an effective length, focusing on the practitioners’ perspective."

Professor Yang commented; "I believe this book should be extremely useful and helpful for Chinese firms and managers to learn about international practices and standards in credit management and improve their competitiveness."

The Hong Kong based magazine Asset Publishing & Research Ltd reported on October 28; “Taiwan and China are the markets that are the least 'credit-friendly' in the region with less than 40% of respondents conducting business-to-business (B2B) sales over credit, a new survey shows.” The result of this research strongly supports the notion that the practical skills and knowledge imparted in this book are urgently needed in China. (http://www.theasset.com.hk)

Click here to read the introductory pages, which have been translated into English to enable you to judge the book's value for yourself; the original Chinese text is also included.

The book (ISBN: 978-988-99586-1-9) consists of 250 pages; unfortunately the Paperback version is out of print so only a PDF electronic format is available. To purchase the electronic version (an eBook) click here.

BarrettWells

Now there are 16 Banking Groups Live on BPO

This list includes 6 of the top15 Trade banks (based on Cat 7 traffic)

ANZ - Australia & New Zealand Banking Group
Bank of China
Bank of Tokyo-Mitsubishi UFJ
Bangkok Bank
BNP Paribas
China CITIC Bank
CIMB - Commerce International Merchant Bankers Berhad
Commerzbank
Hua Nan Bank (Head Office: Taipei )
Korea Exchange Bank ( KEB )
Maybank - Malayan Banking Berhad
Siam Commercial Bank ( SCB Thailand )
Standard Chartered Bank ( SCB )
Türkiye Is Bankasi ( Isbank )
Turkish Economy Bank Inc. ( TEB )
UniCredit

Information as at November 17, 2014 supplied by SWIFT

As you can see there are plenty of banks to turn to for this service if yours is being unhelpful.

Ron Wells

Ode to LCs past and BPOs to come

Do you have BPO?
What's BPO?
I'll take that as a NO
BPO replaces SBLCs
BPO-Plus replaces DocLCs
BPO Reduces Costs
Improves Working Capital!

Why haven't I heard of BPO?
'Cause your TF Banker is afraid
Afraid to spill the beans.
Why?
'Cause it threatens his/her job
Oh, I shall find another bank
a BPO friendly bank

Where can I find a list?
A BPO ready bank list?
At SWIFT.com you'll find a list
A BPO ready bank list :o)

I can't find the list
The BPO ready bank list
It's hidden on SWIFT.com
Search for 'BPO Market Adoption SWIFT’
To find the BPO ready bank list

The BPO & Friends have a Stranglehold on the LC and will soon finally lay it to rest…

Read why every business that accepts Standby Letters of Credit as collateral cover (security) for its sales transactions should switch to requiring Bank Payment Obligations (BPOs).

Discover how the BPO-Plus (BPO & Friends) will gradually but inexorably replace transaction related Documentary LCs over the next five years or less. The considerable rewards intrinsic to using BPO and electronic documents in combination are available to every trading partnership today; you should be benefiting.

To read the full article click here.

Ron Wells

Ron Wells is a B2B counterparty credit risk and trade finance practitioner and author of “Credit Risk Management – The Novel (Part One)”. This is not a text book, it is a story that follows the day to day work of a credit risk management team as they face and overcome various challenges. You are invited to ‘listen in’ to their conversations and read the outline of the solutions they employ. There is a parallel story that follows the adventures of James E Cricket, providing and undercurrent of twists and turns.

Ron also wrote “Global Credit Management – an Executive Summary” published by John Wiley & Sons. His books are sold by Amazon.com and other retail outlets.

Letters of Credit … should state applicable law and jurisdiction

Letters of Credit (LCs) are still widely used in international trade, although they cover a diminishing proportion of that trade. Most sellers who receive and buyers who initiate LCs and their bankers know that their LCs must be opened subject to the Uniform Customs and Practices for Documentary Credits 2007 revision, as published by the International Chamber of Commerce, in publication number 600; generally called UCP 600.

However relatively few bankers and very few exporters and importers realise the importance of ensuring that the LCs they open, receive or initiate should stipulate the law and legal jurisdiction which applies in each case.

This becomes vitally important if a dispute arises regarding an LC. If applicable law and jurisdiction are not stated, the parties to the dispute may do some ‘jurisdiction shopping’ and/or place the matter in the hands of a court inexperienced in matters of international trade, which has to work with law that does not adequately support an equitable ruling.

UCP 600 is a body of rules incorporated into the LC contract. It is not law hence it does not have the force of law in any jurisdiction. It is a contract between the parties to the LC so the rules will be interpreted by a court simply as rules agreed by the parties, against the background of the applicable law.

I recommend the inclusion of a clause in all LCs stipulating either English law and English Courts, or Singapore law and Singapore Courts, or Hong Kong law and Hong Kong Courts, or New York law and New York Courts; simply because it is these courts that by virtue of the fact that they are based in trading hubs, have extensive experience and sound legislation and/or precedent decisions on which to base broad-minded judgements.

It may not always be possible to persuade an opening bank to include a law and jurisdiction clause but I have found through experience that most banks will agree. I have found that if you persist in requesting this clause it is possible to achieve a high percentage of success.

Feel free to take professional legal advice on this matter, but I recommend that if you do so you consult a lawyer with experience in international trade. I will be happy to recommend some appropriate legal firms if you are not familiar with the field.

Ron Wells