What would you do if you had a million dollars? Would you buy a new house or a car; or would you go on a world tour or perhaps donate it to a charitable institution? Most likely you would invest in stocks/bonds, mutual funds or a business that would bring you a regular return on your investment. It is not difficult to make money when you have money. The real challenge is how to make money without money? This book is devoted to answering that question.
In simple language the author brings to light ways to use someone else's money to make money through a thorough knowledge of documentary credit transactions. The book focuses on practical aspects of international trade and banking and teaches the reader the most basic and the more complicated aspects of letters of credit. It is both a how-to manual and a resource book.
Chapter 1 describes the ins and outs of "the contract," the critical first step in the transaction. Incoterms such as Ex-Works, FOB, and CIF, and the basic aspects of letters of credit are covered in this chapter.
Chapter 2 provides the crucial information necessary to make money without money. Practical uses of transferable letter of credit, assignments of proceeds and back-to-back credits, are introduced and explained.
Chapter 3 brings to light various uses of stand by letters of credit and performance bonds and gives samples of how such documents should be structured.
Chapter 4 is true to its title "Trader's Know How." It compiles information about international marketing, exclusive rights, foreign exchange and other pertinent aspects of the trading business. In this chapter, the risks of selling FOB are discussed in great detail and suggestions of how to minimize them are presented.
The case studies in Chapter 5 give a taste of what it is like to trade and teaches using examples of other trader's mistakes. The first case study, "Telephones from Hong Kong to Russia," shows how to use an independent quality inspection certificate in the letter of credit to protect the company against claims. The second, "The Vessel Named Yick Fat," describes the use of performance bonds. The third case study "Exclusive Rights" explains how a Russian trading company made millions through an exclusive rights to sell Belgian brick-making machines in the former Soviet Union.
Chapter 6 presents checklists for the seller after the documentary credit issuance and upon submission of documents to the bank. This part of the book presents actual shipping documents such as: bills of lading, commercial invoice, certificate of origin and others from successfully concluded transactions in a point by point format. For newcomers to international trade, this chapter will be the most valuable asset.
Chapter 7 is the actual text of UCPDC 500 as published by the International Chamber of Commerce. As this document provides the laws and regulations of letters of credit that the banks rely upon when checking documents, UCPDC 500 is reprinted in its entirety to enable the reader to have a complete reference guide within the confines of this book.
Chapter 8 is a glossary of technical terms used in documentary credits, shipping and banking in general. This chapter will help readers familiarize themselves with the language used in the trade.
In essence the book not only teaches how to use transferable letters of credit and assignments of proceeds to make money without money, but provides a manual for the international trading business. It gives the reader the most valuable asset of all: Power of Knowledge.