Complying with the Rules and Regulations Pertaining to Letters of Credit: OFAC, Anti-Boycott, and the USA PATRIOT Act

Why Should You Attend:

There are many rules and regulations governing international trade. The rules are standards of practice, many created and maintained by the International Chamber of Commerce, to facilitate trade. The regulations contain legal restrictions on what one is allowed to sell to whom and required (and prohibited) business conduct, with penalties for failure to comply including fines, loss of export privileges, and even jail terms. In many cases, banks are required to police transactions they handle and report violations.

This 90-minute session will provide an overview and introduction to rules and regulations governing international trade and take an in-depth look at some with broad applicability: the Incoterms 2010, the Uniform Customs and Practice for Documentary Credits (UCP), US sanctions enforced by the Office of Foreign Assets Control (OFAC), Anti-Boycott regulations maintained by the US Department of Commerce, and section 326 of the USA PATRIOT Act (“Know Your Customer”). Exporters, importers, and their bankers must know the rules in order to play the game and avoid losses and penalties.

Learning Objectives:

Objective #1: Understand the difference between international rules, domestic laws & regulations, and international conventions and when they apply.
Objective #2: Eliminate common confusion over selected articles in the UCP600 and the International Standard Banking Practices.
Objective #3: Review what the Incoterms 2010 cover, how they are intended to be used, how they are often misused, and what they have to do with transfer of title.
Objective #4: Learn under what circumstances payment from a foreign buyer could get frozen by the U.S. government and deemed “trading with the enemy”.
Objective #5: Understand makes a transaction “reportable” under the anti-boycott regulations.
Objective #6: Review how the USA PATRIOT Act applies to trade transactions and information banks actually need in order to satisfy “Know-Your-Customer” requirements.

Areas Covered in This Session:

• Export licensing (e.g., the Export Administration Regulations (“EAR”) and International Traffic in Arms Regulations (“ITAR”)).
• FX controls.
• Sanctions against “enemy” countries (e.g., the Office of Foreign Assets Control and U.N. sanctions).
• Antiboycott regulations.
• Anti-Money Laundering regulations (e.g., the USA PATRIOT Act).
• Anti-corruption regulations (e.g., the Foreign Corrupt Practices Act).
• The International Commercial Terms (“Incoterms”).
• The U.N. Convention on Contracts for the International Sale of Goods (“CISG”).
• The Uniform Customs and Practice for Documentary Credits (“UCP”).
• International Standard Banking Practice for the Examination of Documents under Documentary Credits (“ISBP”).
• The eUCP.
• The International Standby Practices (“ISP98”).
• The Uniform Rules for Demand Guarantees.
• The Uniform Commercial Code, Article 5.
• The Uniform Rules for Collections.

Who Will Benefit:

The following personnel from across industries will benefit:

• Attorneys
• Credit and collection managers
• Compliance officers
• Company presidents
• Company vice presidents
• Business owners
• Managers
• Lending professionals
• Trade finance professionals
• Accountants
• Bankers

Instructor Profile:

Walter (Buddy) Baker, has over 30 years of experience in international trade finance. In May 2009 he joined Fifth Third Bank where he heads their Global Trade Solutions Delivery team. Fifth Third is one of the 20 largest banks in the US and provides a full range of risk mitigation and financing products for exporters and importers. Prior to Fifth Third, Buddy worked for Atradius Trade Credit Insurance, ABN AMRO Bank, Bank of America, Wachovia Bank, and The First National Bank of Chicago.

Buddy is a recognized expert in trade finance and author of 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 owns the consulting firm Global Trade Risk Management Strategies, which specializes in educational training, and makes frequent presentations for national associations of exporters, importers, bankers and lawyers. Mr. Baker serves as a member-at-large of the National Letter of Credit Committee of the International Financial Services Association and is actively involved in establishing national and worldwide standard practices for LCs, such as the recent revision 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, the eUCP supplement to the UCP dealing with electronic documents, the International Standby Practices, and Article 5 of the Uniform Commercial Code. He acts as an advisor to the Institute for International Banking Law and Practice and 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.

Buddy earned his undergraduate degree at Yale University and his MBA at Northwestern.