Rosanna Murabito

TRADE FINANCE PRODUCTS

2

ITALIAN

EXPORTER

FOREIGN

IMPORTER

UBI><BANCA

FOREIGN BANK OF

THE IMPORTER

INCOMING L/C (UBI EXPORT)

Italy

WORLD

1-

CO

NT

RA

CT

2- LC opening request

3-

L/c

Issued o

n U

BI

gro

up

4 – ADVICE OF L/C

5 -

Sh

ipm

en

t o

f g

oo

ds

5 - Docs presentation

6 –

Do

cu

me

nts

ma

iled

7 - Docs release to collect the goods

7 - Payment

8–

Pa

ym

en

t

9 - Payment

UBI Corporate Banking

MT 710 Advice of a Third

Bank's or a Non-Bank's

Documentary Credit

MT 720 Transfer of a

Documentary Credit

Article 39 Assignment

of Proceeds

UBI Corporate Banking

MT 710 Advice of a Third

Bank's or a Non-Bank's

Documentary Credit

MT 720 Transfer of a

Documentary Credit

Article 39 Assignment

of Proceeds

3

ITALIAN

EXPORTER

FOREIGN

IMPORTER

UBI><BANCA

FOREIGN BANK OF

THE IMPORTER

INCOMING L/C (UBI EXPORT) CONFIRMATION

Italy

WORLD

1-

Pu

rch

ase

co

ntr

act

2- LC opening request

3-

LC

issu

e o

n U

BI>

<B

an

ca

4 - LC advised and reach

a confirmation agreement

5 -

Sh

ipm

en

t o

f g

oo

ds

5 - Docs presentation

6 –

Do

cu

me

nts

ma

iled

7 - Docs release to collect the goods

9- Payment

8–

Pa

ym

en

t

7 - Payment

CreDoc Online

TFP

Trade Facilitation

Program

Article 9.

Reimbursement

Undertaking

Silent Confirmation

4

ITALIAN

EXPORTER

FOREIGN

IMPORTER

UBI><BANCA

FOREIGN BANK OF

THE IMPORTER

Export LC discounting (Both confirmed and unconfirmed)

Italy

CO

NT

RA

CT

2- Deferred LC opening request

3-

De

ferr

ed

LC

issu

e o

n U

BI>

<B

an

ca

4 - LC advice

5 -

Sh

ipm

en

t o

f g

oo

ds

6 - Docs presentation with request to discount before maturity

8 –

Do

cu

me

nts

ma

iled

9 - Docs release to collect the goods

10

– P

aym

en

t o

n m

atu

rity

7 – Payment, less discount fee

Article 12

Nomination

“in lieu” tax

10- Payment

5

ITALIAN

EXPORTER

FOREIGN

IMPORTER

UBI><BANCA

FOREIGN BANK

OF THE

IMPORTER

Export LC with Post-financing to the foreign importer

Italy

WORLD

1-

Pu

rch

ase

co

ntr

act

2- Sight LC opening request with Post-

financing + agreement 3

- L

C issu

e o

n U

BI>

<B

an

ca

4 - LC advice

5 -

Sh

ipm

en

t o

f g

oo

ds

6 - Docs presentation under LC terms

8 –

Do

cu

me

nts

ma

iled

9 - Docs release to co

llect the goods

7 – Sgiht Payment of LC

10

– In

form

atio

n o

f P

ost-

fin

an

cin

g p

rovid

ed

11– Information of Post-financing provided

12

- L

C r

ep

aym

en

t +

in

tere

st

6

Warning

7

Discounting Bills of exchange “without recourse”

Supplier

Credit Policy

8

Foreign

EXPORTER

ITALIAN

IMPORTER

Foreign BANK OF

EXPORTER

UBI><BANCA

OUTGOING L/ C (UBI IMPORT) Discounting to foreign exporter

WORLD

Italy

1-

Pu

rch

ase

co

ntr

act

2- Deferred LC opening with

«Discountable» clause 3

- D

efe

rre

d L

C issu

e o

n F

ore

ign

b

an

k

4 - LC advice

5 -

Sh

ipm

en

t o

f g

oo

ds

6 - Docs presentation with request to

discount under LC before maturity

7 –

In

form

UB

I a

bo

ut d

isco

un

tin

g r

eq

ue

st

8 –

Assig

nm

ent of pro

ceeds o

n m

atu

rity

9–

Pa

ym

en

t le

ss d

isco

un

tin

g in

tere

st

10 – Payment less discount interest

11 – Repayment on maturity

.

MT 710 Advice of a Third

Bank's or a Non-Bank's

Documentary Credit

“this letter of credit

is discountable”

Conform

documents

Assignment

9

“REQUEST” MT760

Contractual Guarantees (bid

bond, advance, performance,

maintainance

Tax refund payment bond

ISSUANCE OF INTERNATIONAL /LOCAL GUARANTEES

ISSUE” MT 760

Issue SBLC

Contractual Guarantees (bid

bond, advance, performance,

maintainance

Funding Requirements

10

Summary:

ADVICE OF NON

CONFIRMED L/C

ADDING

CONFIRMATION

DISCOUNTING L/C

EXPORT

POST FINANCING DISCOUNTING B/E

IMPORT

DISCOUNTING

ISSUE OR REQUEST TO ISSUE GUARANTEES / S.B.L.C.

11

Annex

…….in case you

wish to learn

more………

12

Flow MT 710: examples from SWIFT U.H.

13

Flow MT 720 – examples from SWIFT U.H.

14

Assignment of Proceeds

Dear Sirs,

We transcribe hereafter, for your proper knowledge, the text of the letter which has been transmitted to us

from ……………..(beneficiary of l/c)………………. on (date)

“QUOTE”

Re: IRREVOCABLE DOCUMENTARY CREDIT N. XXXXXXXX = (amount) OUR REF. N. ZZZZZZZZ

With reference to the above mentioned irrevocable documentary credit please note that we confirm you hereby our irrevocable

order to transfer on our behalf to …..(indicazione del beneficiario estero – indirizzo e n. di conto )………, the amount of

……….(importo in cifre e lettere del solo impegno)….. soon after the full amount equal to ….(importo del credito)……...-

relevant to the above stated Credit, will be ready and available for us, after dispatch, within the stated validity terms, with all

duly complying documents.

Without any responsibility on your part, you are kindly requested to give immediate advice to the concerned party:

………..(beneficiario estero)…….., by stating the validity terms of said credit.

“UNQUOTE”

In advising you of the instructions stated in the above said letter, without any engagement or responsibility

on our part, please note that, as it is a credit domiciled for payment at a Foreign Bank counter, we will carry

out the instructions received by our client, only after the Foreign Bank has credited us the relevant covering

amount. We assure you , however that, as it is an irrevocable order, no further instructions from

……………..(beneficiary of l/c )………………. – meant to modify or revoke these instructions, will be

accepted by ourselves, without your previous approval. Please also note that the undertaking we have been

charged with will be accepted by ourselves unless 1) we have any prior claims on our customer or 2) there

are judicial rulings preventing the payment.

15

T.F.P.

Mt 799:

WE HEREBY OPEN OUR IRREVOCABLE STANDBY LETTER OF

: CREDIT NO. AAA/16 IN YOUR FAVOUR UNDER THE TERMS

: OF THE LETTER OF AGREEMENT BETWEEN OURSELVES AND

: YOURSELVES DATED (..)(THE 'CONFIRMING

: BANK AGREEMENT'). OUR IRREVOCABLE STANDBY LETTER

: OF CREDIT IS ISSUED IN SUPPORT OF THE FOLLOWING

: INSTRUMENT (THE 'ELIGIBLE INSTRUMENT')

: CLAIMS: PAYMENT WILL BE MADE IN ACCORDANCE WITH

: THE TERMS OF THE CONFIRMING BANK AGREEMENT WITHIN

: FIFTEEN DAYS AFTER RECEIPT BY US OF YOUR NOTICE

: OF UNPAID CLAIM IN THE FORMAT AND ACCOMPANIED BY

: THE ENCLOSURES DESCRIBED IN THE CONFIRMING BANK

: AGREEMENT (OR, IF THAT FIFTEENTH DAY IS NOT A

: TRANSFER (TARGET) SYSTEM, THE NEXT FOLLOWING

: NOTICE OF UNPAID CLAIM.

: MORE THAN ONE NOTICE OF UNPAID CLAIM MAY BE

: PRESENTED.

: THIS STANDBY LETTER OF CREDIT IS SUBJECT TO UCP

: 600 AND SHALL BE GOVERNED BY AND CONSTRUED IN

: ACCORDANCE WITH THE LAWS OF ENGLAND AND WALES.

MT 700:

:78: PLEASE ADD CONFIRMATION BASED ON 100 PCT COVER FROM EBRD.

16

I.R.U

: WE ARE AUTHORIZED BY ABCD BANK : TO ISSUE OUR IRREVOCABLE REIMBURSEMENT UNDERTAKING FOR THE AMOUNT OF

: EUR 00000,00 IN F/O YR GOOD BANK.

: .

: HEREBY WE ISSUE OUR IRREVOCABLE REIMBURSEMENT EUR 00000,00

TO HONOUR YOUR

CLAIM UNDER LETTER OF CREDIT NO :aaaaaaa ISSUED ON ..

: BY ABCD BANK FOR THE AMOUNT OF EUR 00000,00.

: .

: WE HAVE BEEN INFORMED BY THE ABOVE NAMED ISSUING BANK THAT YOU ARE

AUTHORIZED TO PRESENT REIMBURSEMENT CLAIM TO US UNDER THE SAID L/C.

: WE IRREVOCABLY UNDERTAKE TO HONOUR YOUR REIMBURSEMENT CLAIM UP TO

AMOUNT OF EUR 00000,00 PROVIDED YOU CONFIRM TO US THAT

: TERMS AND CONDITIONS OF A/M L/C HAVE BEEN

: COMPLIED WITH OR THE ISSUING BANK HAS ACCEPTED

: THE APPLICANT'S CONSENT TO PAY AGAINST DISCRDOCS.

: .

: OUR REIMBURSEMENT UNDERTAKING EXPIRES ON ………

: ANY REIMBURSEMENT CLAIM MUST REACH

: US BY AUTHENTICATED TELETRANSMISSION AT LEAST 3

: BANKING DAYS PRIOR MATURITY.

: ANY PAYMENT THE MATURITY DATE OF WHICH DOES NOT

: FALL ON A U.S./EC/BY BANKING DAY SHALL BE

: BROUGHT FORWARD TO THE NEXT BANKING DAY.

: .

: ALL CHARGES UNDER THE REIMBURSEMENT UNDERTAKING

: ARE FOR THE ACCOUNT OF THE APPLICANT.

: .

: REIMBURSEMENT IS SUBJECT TO URR 725.

: .

: YOUR CLAIM MUST INDICATE OUR REF.

17

Post Finance SES/OSN 3483/550759 RICEV.IL 99/99/99 ORE 00:00 MSG 700

AVAILABLE WITH..BY.. :41 : A BCABIT21

BY DEF PAYMENT

F:DEFF PAYMENT :42P: ON 360DAYS FROM THE DATE OF SHIPMENT

:78 :

UPON RECEIPT OF CREDIT CONFORM DOCS PLS PAY TO THE BENEFICIARY

BENEFICIARY AT SIGHT AND GRANT US A FINANCING FOR THE PERIOD OF

12 MONTHS FROM THE DATE OF PAYMENT TO THE BENEFICIARY.

.

PROVIDED PRESENTATION OF STIPULATED DOCUMENTS REPAYMENT OF THE

PRINCIPAL AMOUNT TO BE EFFECTED BULLET.

.

YOUR FINANCING COMMISSION IS TO BE CALCULATED AS FOLLOWS: ON THE

AMOUNT OF SET OF DOCS PAID FOR THE PERIOD FROM THE DATE OF

PAYMENT TO THE BENEFICIARY TILL MATURITY DATE AT EURIBOR FOR

RESPECTIVE MATCHING PERIOD FIXED AT TWO BUSINESS DAYS PRIOR TO

THE DATE OF PAYMENT TO THE BENEFICIARY PLUS 0.XX0 PCNT P.A.

COMPOUNDED 365/360 DAYS/YEAR BASIS.

10 PCNT INCOME TAX WILL BE WITHELD BY US IN RESPECT TO THE

FINANCING COMMISSION CALCULATED BY YOUR GOOD BANK.

YOUR FINANCING COMMISSION WILL BE PAID AT THE END OF FINANCING

PERIOD SIMULTANEOUSLY WITH PRINCIPAL REPAYMENT INSTALLMENT.

.

PRINCIPAL REPAYMENT INSTALLMENT AND FINANCING COMMISSION WILL BE

PAID UPON RECEIPT OF YOUR AUTHENTICATED SWIFT MESSAGE INDICATING

ITS EXACT AMOUNT AND DETAILS OF CALCULATION.

18

Discounting Import L/C

TO: UBI BANCA (UNIONE DI BANCHE ITALIANE) SCPA

RE: Assignment of irrevocable L/C Nr. .…….. matur. on……, issued by…… Bank

for a total amount of ……….. – Our Ref. ....

______________________________________________________________________________________

With reference to the above mentioned Letter of Credit, we hereby confirm that our client has assigned their rights to us

and that we have irrevocably and unconditionally assigned to you, accepting your offer price of ....., plus 3 banking

days, plus the amount of USD 150,00 for foreign bank charges.

We hereby represent and warrant that we will notify ...name of the L/C issuing bank... (“the Issuing Bank” of the above

L/C) to pay directly to you any proceeds under the above L/C or accept your instructions in that regard.

Notwithstanding the foregoing, we further confirm that in case of receiving of any proceeds under the above L/C from

the Issuing Bank at maturity, we shall hold such proceeds in trust for your benefit and we shall pay directly to you or

your assignees in accordance with your instructions, for the full face value we received and any interest accrued

thereon, free of any deduction whatsoever from our side.

We further undertake to indemnify you any loss and damages should the documents presented for negotiation under

this L/C be forged, fabricated or fraudulent, or contain any material misrepresentation or no genuine underlying

transaction exists in connection with the L/C or the beneficiary commits fraud in relation to the underlying transaction.

We confirm that all the copies of the documents provided by us under this transaction are authenticated.

Please provide to credit the discounted proceeds to our (USD/EUR/etc) Acct. Nr. xxx with xxx Bank (swift code: xxx).

Kindly acknowledge receipt.

19

Counter Guarantee –MT 760

In consideration of you, UBI Banca , issuing the above guarantee to ( ..beneficiary …) in

the terms stated above, we,…(requesting Bank)…hereby irrevocably and unconditionally

agree to pay to you on your r first written demand an amount equal to and in the same

currency as each sum paid by you under or in connection with the above guarantee, and

we undertake to indemnify you and keep you indemnified against any and all claims,

losses, costs, damages, interest or expenses you may sustain in connection with the

above guarantee, provided that the maximum amount recoverable from us under this

counter guarantee shall not exceed the sum of ...( amount )

All amounts payable under this counter guarantee will not be subject to counterclaim or

set-off and all such payments must be made free and clear and without deduction of any

kind.

This counter guarantee is valid until receipt of your authenticated SWIFT message in

confirmation of release from all liability thereunder.

We agree that this counter guarantee shall be construed and decided in accordance

with Italian law and subject to the jurisdiction of the Court in Brescia (ITALY).

(or, in alternative)

International Rules for Demand Guarantees – URDG 758 ICC Publication.