Demand Guarantees And Standby Letter Of Credit - An Overview

Types & Uses in International Trade | URDG 758 & ISP 98 - Main Points | Clauses & Examples | Related SWIFT Messages

What you'll learn

Handle a Guarantee/ SBLC desk job confidently by understanding the various types, categories, process flows and life cycle of Guarantees/ SBLCs

Understand URDG 758 and ISP 98 - Main points

How to use Safeguard clauses while drafting Guarantees/ SBLC wordings

Use of Category 7 SWIFT messages in Guarantees/ SBLCs

More than 100 questions to evaluate your understanding

Requirements

Basic knowledge of trade finance

Description

Demand guarantees and standby letter of credit are crucial instruments which are used in international trade finance. It is very important to know the concepts behind these instruments for correct and effective usage in international contracts and business. This course starts from the very basics and provides all the relevant information needed to handle the guarantee/SBLC trade desk. It also provides all the essential information for handling consulting assignments for business analysts.It covers not only the theoretical knowledge but also the practical aspects like how to use safeguard clauses in the guarantee wordings to avoid wrongful claims. It also discusses how SWIFT messages are used in guarantees and standby letter of credit, the related message types and message and guarantee examples.This course also has more than 100 questions so that you can evaluate your understanding on the subject.This course is the best choice to begin learning about guarantees and SBLCs and can be used as a stepping stone for certifications like Certificate for Specialists in Demand Guarantees (CSDG).Ideal for-Bankers handling trade finance deskBusiness Analysts/ ConsultantsAspirants of CSDGCourse Content-IntroductionWhat is guarantee and Standby Letter of Credit?Key features of Guarantee and Standby letter of credit  Parties in a demand guarantee and Standby letter of creditICC Rules for guarantees and Standby letter of creditProcess flow of a demand guaranteeProcess flow of a Standby letter of creditBroad Categories of Guarantees/ SBLCsIndependent/Unconditional/Demand Guarantees and Dependent/Conditional/ Accessory/ Suretyship GuaranteesDirect Guarantees/SBLC and Indirect/ Counter Guarantees and Confirmed SBLCsPayment Guarantees and Performance GuaranteesExport related Guarantees and Import related GuaranteesTypes of Guarantees and Process Flow and Sample ClausesBid BondPerformance GuaranteeAdvance Payment GuaranteeRetention Money Guarantee and Warranty GuaranteePayment GuaranteeChronology of Guarantees in a contractOther types of GuaranteesBrief summary of URDG 758 and ISP 98URDG 758 Article 1 - Article 14URDG 758 Article 15 - Article 33ISP 98 RulesComparisonsComparison between SBLC and demand guaranteeComparison between SBLC and Letter of CreditComparison between Letter of Credit and GuaranteeDrafting of SBLC/Guarantee - Safeguard ClausesMandatory information to be includedVariation of value - Reduction in payment guarantee/SBLCVariation of value - Reduction in advance payment guarantee/SBLCVariation of value - Increase in performance guarantee/SBLCOperative Event/ Date of a Guarantee/ SBLCEvergreen/ Auto Renewal ClauseOperational Steps of issuing a bank guarantee/ SBLCSWIFT Messages used in Guarantees and SBLCsRelevant Message TypesRecent changes in MT 760 StructureExamples of Guarantee and SBLCExample of a Performance GuaranteeMT 700: Example of a Standby Letter of CreditMT 760: Example of a Standby Letter of CreditPractice Test

Overview

Section 1: Guarantee and Standby Letter of Credit - Background Concepts

Lecture 1 Introduction

Lecture 2 What is a Guarantee and a Standby Letter of Credit?

Lecture 3 Key features of Guarantees and Standby letter of credit

Lecture 4 Parties in a Demand guarantee and Standby letter of credit

Lecture 5 ICC Rules for Guarantees and Standby letter of credit

Lecture 6 Process flow in a Demand Guarantee

Lecture 7 Process flow of a Standby letter of credit

Section 2: Broad Categories of Guarantees/ SBLCs

Lecture 8 Demand Guarantees and Accessory Guarantees

Lecture 9 Direct Guarantees/SBLC and Indirect/ Counter Guarantees and Confirmed SBLCs

Lecture 10 Payment Guarantees and Performance Guarantees

Lecture 11 Export related Guarantees and Import related Guarantees

Section 3: Types of Guarantees with Process Flows and Sample Clauses

Lecture 12 Bid Bond

Lecture 13 Performance Guarantee

Lecture 14 Advance Payment Guarantee

Lecture 15 Retention Money Guarantee and Warranty Guarantee

Lecture 16 Payment Guarantee

Lecture 17 Chronology of Guarantees in a contract

Lecture 18 Other types of Guarantees

Lecture 19 Scenario - Choice of Guarantees

Section 4: Brief summary of URDG 758 and ISP 98

Lecture 20 URDG 758 Articles 1 - 14

Lecture 21 URDG 758 Articles 15 - 33

Lecture 22 ISP 98 Rules

Section 5: Comparisons

Lecture 23 Comparison between SBLC and Demand Guarantee

Lecture 24 Comparison between SBLC and LC

Lecture 25 Comparison between LC and Guarantee

Section 6: Drafting of SBLC/Guarantee - Safeguard Clauses

Lecture 26 Mandatory information to be included

Lecture 27 Variation of value - Reduction in payment guarantee/SBLC

Lecture 28 Variation of value - Reduction in advance payment guarantee/SBLC

Lecture 29 Variation of value - Increase in performance guarantee/SBLC

Lecture 30 Operative Event/Date of a Guarantee/ SBLC

Lecture 31 Evergreen/ Auto Renewal Clause

Section 7: Operational Steps of issuing a Bank Guarantee/ SBLC

Lecture 32 Operational Steps of issuing a Bank Guarantee/ SBLC

Section 8: SWIFT Messages used in Guarantees and SBLCs

Lecture 33 Relevant Message Types

Lecture 34 Recent changes in MT 760 Structure

Section 9: Examples of Guarantees and SBLCs

Lecture 35 Example of a Performance Guarantee

Lecture 36 MT 700: Example of a Standby Letter of Credit

Lecture 37 MT 760: Example of a Standby Letter of Credit

Section 10: Practice Test

Business Consultants/ Bankers handling trade finance desk,Students of International Trade,CSDG Aspirants