The Handbook of International Trade and Finance, Fourth Edition

The Handbook of International Trade and Finance, Fourth Edition

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The Complete Guide for International Sales, Finance, Shipping and Administration

Anders Grath

Subjects: LCSH: International trade. | International finance.

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Book Details
 265 p
 File Size 
 3,129 KB
 File Type
 PDF format
 978 0 7494 7598 7
 978 0 7494 7599 4
 Anders Grath,
 2005, 2008, 2012, 2014, 2016 

This handbook was originally published more than 40 years ago, and has since
been expanded and updated in new editions. Originally it was published as
separate country-specific editions in different European countries where it soon
became a reference handbook for companies, banks and other institutions
involved in international trade, irrespective of their size or the nature of their business.

However, for practical and logistical reasons it was not possible to cover
more than a handful of countries in this way, thus the idea for a completely
new and country-neutral edition that could be marketed in most countries
involved in international trade around the world. The only drawback with
this approach is that it is then not feasible to describe the specifics for
every country; on the other hand, the basic aspects of international trade,
payments and finance are almost the same all over the world, which is also
the basis for this handbook.

Furthermore, there is great advantage in being able to combine this basic
description with detailed references where such country-specific information
can be found. This information is nowadays readily available from internet
sites from a variety of domestic institutions in most countries. It has then
been possible to create a situation where this book provides the foundation
but also gives readers the possibility to add whatever detailed and countryspecific
information they require from other sources. There is another
advantage in such an approach: that the basics of this handbook should
be relatively stable over time, whereas detailed information from local and
domestic institutions will certainly change over time.

All editions published over the years have been based on the same concept,
which is their practical nature. They contain no theoretical elements,
just information based on the author’s payment and finance experience
gained from managerial positions as head of international departments in
a number of European banks. In such positions you are necessarily involved
in thousands of trade transactions each year, and the advice and comments
given in this book are based on that experience.

I am very pleased with this fourth international edition now published by
Kogan Page which contains considerably more examples and illustrations
in a new book format. I thus feel confident that it will continue to be the
reference handbook of choice in numerous countries around the world, for
many years to come. It will certainly be of significant benefit to international
traders in the daily work of expanding their businesses or when entering
new markets, but the book will equally be increasingly used in trade education
and as a practical tool within international departments of commercial
banks and other trade-related institutions.

The author would like to thank the companies and institutions that have
contributed with support, advice and comments when creating this new
edition. This help has been greatly appreciated.
Anders Grath

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Table of Contents
Preface viii
Introduction 1
01 Trade risks and risk assessment 9
Business beyond borders: trade risks 9
International trade practices 10
Product risks 16
Commercial risks (purchaser risks) 20
Adverse business risks 24
Political risks 26
Currency risks 30
Financial risks 31
02 Methods of payment 35
Different methods of payment 35
Bank transfer (bank remittance) 38
Cheque payments 47
Documentary collection 49
Letter of credit 56
Counter-trade 77
03 Bonds, guarantees and standby letters of credit 81
The use of bonds and guarantees 81
Common forms of guarantee 89
Demand guarantees 94
Standby letters of credit 98
The structure and design of guarantees 100
vi Contents
04 Currency risk management 105
Currency risk 105
The currency markets 108
Currency exposure 113
Hedging currency risks 117
Practical currency management 125
05 Export credit insurance 129
A mutual undertaking 129
The private sector insurance market 132
Export credit agencies (official export credit institutions) 137
Investment insurance 146
06 Trade finance 149
Finance alternatives 149
Pre-shipment finance 151
Supplier credits 154
Refinancing of supplier credits 159
Buyer credits 169
The international money market 174
07 Structured trade finance 179
International leasing 179
Lines of credit and local currency finance 185
Project finance and joint venture 187
Multilateral development banks 191
08 Terms of payment 195
Terms of payment and cash management 195
Contents of the terms of payment 196
Structure of the terms of payment 200
Composite terms of payment 205
The final design of the terms of payment 208
Contents vii
09 The export quotation 209
Appendix I: Electronic documents in international trade 217
Appendix II: International transport documents 221
Glossary of terms and abbreviations 227
Index 245

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First published in Great Britain in 2005 by Nordia Publishing Ltd for The Institute of Export as
International Trade Finance
Published in Great Britain and the United States in 2008 by Kogan Page Limited as The Handbook
of International Trade and Finance
Second edition 2012
Third edition 2014
Fourth edition 2016