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CDCS Syllabus Content Outline

CDCS Syllabus Content Outline

Learning Outcome

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Syllabus
1. Understand the main types, characteristics and uses of documentary credits.

• Understanding of the term documentary credit
• A basic documentary credit transaction (including generic flow
chart of this process)
• Types of documentary credit
• Primary characteristics of documentary credits
• Secondary characteristics of documentary credits:
– Revolving credits
– Instalment
– Advance payments
– Transferable
– Evergreen
– Clean
– Direct pay
• Categorisation of documentary credit by type and characteristic
• Commercial documentary credits
• Standby letters of credit
2. Know the industry rules, standards, guidelines and trade terms that govern the delivery of documentary credit transactions.

• Incoterms 2010
• UCP 600 – Uniform Customs and Practice for Documentary
Credits
• ISP98 – International Standby Practices
• URR 725 – Uniform Rules for bank-to-bank reimbursement
under documentary credits
• ICC decision on original documents (Appendix to ICC
publication 645 – ISBP)
• ISBP 681
• eUCP

3. Understand the ways in
which documentary credit
transaction rules and regulations can be breached
and the implications of such
breaches.

• Money Laundering
• Sanctions
• Terrorist Financing
4. Understand the roles and
obligations of the parties to
documentary credit
transactions and the relationships between them.

• Parties to documentary credits roles and responsibilities:
– Issuing bank
– Beneficiary
– Applicant
– Non-bank issuers
– Confirming bank
– Advising bank
– Negotiating bank
– Paying bank
– Accepting bank
– Reimbursing bank
– Transferring bank
– Nominated bank
– Presenting bank
• Banks roles and obligations:
– Issuing bank
– Confirming bank
– Advising bank
– Negotiating bank
– Paying bank
– Accepting bank
– Reimbursing bank
– Transferring bank
– Nominated bank
– Presenting bank
– Beneficiary
• Relationship of parties in respect of payment of conforming
documents and non-payment of non-conforming documents
• Roles and responsibilities in reimbursement

5. Understand the types and
methods of payment and
credit used in documentary
credit transactions.

• Types of payment:
– Sight
– Deferred
– Negotiation
– Acceptance
• Transmission of proceeds
• Types of credit
• With and without recourse
• The autonomy of a documentary credit as a payment
mechanism
6. Understand the types of
transport, commercial and
financial documents used in
documentary credit
transactions and their
requirements under ICC
rules.

• Characteristics, processing and rules that apply to transport
documents:
– Bill of Lading
– Charter Party Bill of Lading
– Non-negotiable Seaway Bill
– Multimodal Transport Document
– Air Transport Document
– Road, Rail or Inland Waterway Transport Document
– Forwarder’s Cargo receipt, Mate’s Receipt and
Consolidator’s Receipt
– Post Receipt or Certificate of Posting
– Courier or Expedited Delivery Service Document
• Financial and Commercial documents:
– Draft / bill of exchange
– Commercial Invoice
– Insurance Document
– Weight Certificate
– Certificate of Origin
– Packing Lists
– Inspection Certificate
• Documents for official purposes and checking mechanisms
7. Understand the processes
and challenges involved in
documentary credit
transactions.

• Processes and activities associated with:
– Sales agreement / contract of sale
– Issue
– Pre-advise
– Advise
– Confirm
– Amend
– Transfer
– Present
– Examine
– Pay / Reject
– Claim
– Reimburse Funds
– Cancel
• Presentation, Examination and Settlement / Rejection
• Identifying and handling discrepant documents
Syllabus
• Electronic presentations
• Problems that can arise during the documentary credit
transaction process
8. Understand and manage the risks involved in
documentary credit
transactions.

• Types of Risk
– Operational / UCP 600
– Credit
– Foreign Exchange
– Fraud
– Legal
– Political
• Other risks / considerations
– Money Laundering
– Sanctions
– Terrorist Financing
– Credit Risk Assessment / Management
• Risks to the parties to documentary credits:
– applicant
– issuing bank
– beneficiary
– advising bank
– nominated bank
– confirming bank
– reimbursing bank
• How risks can be controlled

9. Understand the related
products used in
documentary credit
transactions.

• Letter of Indemnity
• Air Way Release
• Steamship Guarantee
• Assignment of Proceeds
• Participation and Syndication
• Refinance Credits
• Reimbursement undertaking
10. Be able to manage the
transport, commercial and
financial documents used in
documentary credit
transactions.

• Apply and analyse the transport, commercial and financial documents used in documentary credit transactions in order to recommend appropriate courses of action and manage documentary credit transactions.

Source: http://www.letterofcredit.biz/CDCS-Certificate-Contents.html

 

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