International Trade Finance

Module Title	International Trade Finance
Module Code	25-5021-00S
Semester of Delivery	See Module Information Table
Mandatory/Elective/Option	See Module Information Table
Level	5
Credit Points	20
Assessment Mode Weighting	Coursework	25%
	Examination	75%
Pre-requisites	None
Co-requisites	None
Class Contact Hours
Average Weekly	2.5
Directed Learning
Average Weekly	10
Module Leader	Paul Cowdell
	Sheffield Business School
Module Banding	A
Approval Status	Validated

Rationale

With the growing use of the internet and the ever increasing importance of information technology as an efficient communication tool , businesses of all sizes are now trading on a global scale. Consequently, there are widespread career opportunities in the international trade area, not only in the international divisions of financial institutions which finance this trade but also in the import and export departments of the businesses concerned. This module will therefore provide students with an appreciation of the risks and procedures involved in international trade.

Summary of Aims

1. To develop an understanding for students of the services and products provided by banks and others in respect of the financing and general facilitation of international trade.
2. To provide students with an understanding of the procedures involved in international trade transactions.
3. To develop the student's appreciation of risk in international trade and how it can be handled effectively .

Anticipated Learning Outcomes

On completion of this module, the student should be able to:

1. Recognise and distinguish between the various services and products provided by banks and others in respect of the financing and general facilitation of international trade.
2. Identify and evaluate the risks faced by the participants in international trade.
3. Review the documentation or e-commerce equivalent used in international trade
4. Assess and contrast the appropriateness of different services, products and procedures in different circumstances.

Assessment and Feedback Strategy

Summative assessment will be achieved by a final three hour closed book examination (75% module weighting) and one piece of coursework (25% module weighting).

The latter will be a group oral presentation based upon a case study or on a topical matter within the international trade area.

Formative assessment will be carried out via a series of seminars which will look at various topic areas.

Module Assessment Criteria

Learning Outcomes	Assessment Criterion	Level descriptors
		fail	PASS	2.2	2.1	First
Outcome 1	Examination & coursework	Weak, sketchy or inadequate content	Recognise and distinguish between basic relevant services and products provided by banks and others in respect of the financing and general facilitation of international trade.	Recognise and distinguish between a broad number of relevant services and products provided by banks and others in respect of the financing and general facilitation of international trade.	Recognise and distinguish between a wider range of relevant services and products provided by banks and others in respect of the financing and general facilitation of international trade.	Recognise and distinguish between an extensive range of relevant services and products provided by banks and others in respect of the financing and general facilitation of international trade.
Outcome 2	Exam and coursework	Weak, sketchy or inadequate content	Fundamental identification and some relevant evaluation of the risks faced by the participants in international trade.	Fuller identification and a broader evaluation of the risks faced by the participants in international trade.	Substantial identification and a thorough evaluation of the risks faced by the participants in international trade.	Extensive identification and a full and thorough evaluation of the risks faced by the participants in international trade.
Outcome 3	Examination	Weak, sketchy or inadequate content	Basic review of the documentation or e-commerce equivalent used in international trade	Fuller review of the documentation or e-commerce equivalent used in international trade	Broad review of the documentation or e-commerce equivalent used in international trade	Extensive review of the documentation or e-commerce equivalent used in international trade
Outcome 4	Examination & coursework	Weak, sketchy or inadequate content	Basic assessment and contrast of the appropriateness of different services, products and procedures in different circumstances.	Broader assessment and contrast of the appropriateness of different services, products and procedures in different circumstances.	Rigorous assessment and contrast of the appropriateness of different services, products and procedures in different circumstances.	Extensive assessment and contrast of the appropriateness of different services, products and procedures in different circumstances.

Teaching and Learning Strategy and Methods

The learning outcomes for this module will be achieved by a mixture of methods and activities. The means of accumulating knowledge will be achieved by directed learning, independent student research via the internet and paper-based publications and lectures covering key topic areas and recent developments.

Within seminars, this knowledge will then be applied to specific questions and case studies either as individual or group activities. These methods will provide the necessary preparation for summative assessment by helping develop student skills in presentation, communication, analysis, numeracy and problem solving.

Indicative Content

• Commercial issues in international trade including the use of incoterms.
• The nature of foreign exchange markets and the determination of forward and spot exchange rates.
• The nature of risks in international trade ; buyer/seller risk, credit risk, political risk, transit risk and foreign exchange risk.
• Terms of payment and their associated risks; factors influencing the terms of payment decision.
• Credit and commercial insurance against risks associated with international trade.
• Methods of settlement of funds transfer provided by banks and analysis of their benefits and problems for the user; nostro and vostro accounts; bank drafts, mail transfers, telegraphic transfers and their electronic equivalents e.g. SWIFT message.
• Clean and documentary collections and the regulatory effect of Uniform Rules for Collections.
• Bank guarantees, indemnities, and bonds and the regulatory effect of relevant ICC rules.
• Produce and merchandise advances against the security of goods.
• Discounts, negotiations and advances against bills of exchange.
• Acceptance credits and their relationship with financial commercial paper.
• Documentary credits as a means of raising finance and the use of red clause, transferable, back-to-back, revolving, reinstatement and standby credits.
• The regulatory effect of Uniform Customs and Practice for Documentary Credits.
• The nature and operation of countertrade deals.
• Services relevant to international trade finance offered by UK government agencies and other providers e.g. Chambers of Commerce.
• Overseas travel support facilities.
• The developing role of e-commerce.

Indicative Reading List

By its nature, the international trade finance area is volatile. Advances in modern technology, updated regulations, new procedures and practices, innovative new products and services are continually appearing. Consequently, each year the Module Guide will contain a revised list of indicative texts and websites which are suitable to support the learner.

Cowdell P, Hyde D, Watson A - 'Finance of International Trade 7^th Edition', Financial World Publishing 2000