Letters of Credit, OFAC, Antiboycott and AML Regulations for Trade Service Bankers

Why Should You Attend:

The primary focus of this webinar is to look at regulations with their applicability to trade services: US sanctions enforced by the Office of Foreign Assets Control (OFAC), Antiboycott regulations maintained by the US Department of Commerce, and anti-money laundering regulations found in section 326 of the USA PATRIOT Act/Bank Secrecy Act (“Know Your Customer”).

In order to understand their purpose, participants will learn about the origins and rationale for these regulations in addition to the requirements and penalties for noncompliance. Participants will be provided with cheat sheets to use in their daily tasks to identify and distinguish between transactions that are prohibited, transactions with know-your-customer requirements, transactions where assets must be frozen, and transactions that merely must be reported.

Learning Objectives:

• Recognize the circumstances under which payment of a letter of credit or documentary collection must be blocked
• Understand whether blocking a payment exposes the bank to lawsuits for nonpayment of letters of credit it issued or confirmed
• Review the red flags of a suspicious transaction that may make it reportable as potential money laundering
• Be able to identify who the customer is in a trade transaction: When is it the importer, the exporter, or the foreign bank?
• Learn what makes a transaction “reportable” or “prohibited” under the antiboycott regulations
• Understand what banks are required to do in order to verify compliance with export licensing requirements (ITAR and EAR)

Areas Covered in the Webinar:

• The intent of sanctions against enemy countries (e.g., the Office of Foreign Assets Control and U.N. sanctions)
• Procedures followed by banks to filter letter of credit and collection transactions for Specially Designated Nationals
• The intent of the antiboycott regulations
• What banks are expected to do when confronted with an antiboycott violation
• The intent of anti-money laundering regulations (e.g., the USA PATRIOT Act/Bank Secrecy Act)
• Identifying who the customer is in a trade transaction
• How banks are supposed to handle suspicious letters of credit

Who Will Benefit:

• Bank operations staff, including supervisors and managers, involved in handling letters of credit, documentary collections, and other trade transactions
• Bank sales representatives and relationship managers who work with exporters and importers
• Bank regulatory compliance staff
• Bank risk managers
• Attorneys
• Accountants
• Exporters and importers

Instructor Profile:

Walter Baker brings more than 30 years of experience in international trade finance to his current position as vice president and head of global trade solutions delivery for Fifth Third Bank. Fifth Third is one of the 20 largest banks in the US and provides a full range of risk mitigation and financing products for domestic and international trade. His professional experience includes earlier stints with Atradius Trade Credit Insurance, ABN AMRO Bank, Bank of America, Wachovia Bank, and The First National Bank of Chicago.

Mr. Baker is a recognized expert in trade finance and makes frequent presentations for national associations of exporters, importers, bankers, and lawyers. He designed the online training/certification programs used by the Association of International Credit and Trade Finance Professionals (ICTF) and by the Association of Trade and Forfaiting in the Americas (ATFA) and the trade finance sections of the certification program used by the Finance, Credit and International Business Group (FCIB) of the National Association of Credit Management (NACM). Mr. Baker has authored numerous magazine articles, and the books: Users’ Handbook to Documentary Credits under UCP600, Documentary Payments & Short-Term Trade Finance, and The Regulatory Environment of Letters of Credit and Trade Finance. He serves as a member-at-large of the National Letter of Credit Committee of the Bankers’ Association for Finance and Trade/International Financial Services Association and is actively involved in establishing national and worldwide standard practices for LCs, such as the current version of the Uniform Customs and Practice for Documentary Credits (referred to as UCP600), the official ICC guide for examining letter of credit documents, called the International Standard Banking Practices for the Examination of Documents under Documentary Credits (ISBP), the eUCP supplement to the UCP dealing with electronic documents, the International Standby Practices (ISP98), and Article 5 of the Uniform Commercial Code.

Mr. Baker also serves on the board of directors of the Association of International Credit and Trade Finance Professionals (ICTF), a multinational association of export credit managers, on the advisory council of the Institute for International Banking Law and Practice, and on the council of International Standby Practices. He earned his undergraduate degree at Yale University and his MBA at Northwestern.

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