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Presented by: Charles Avaunzaff Vice President Global Trade Sales

Global Trade Sales Presented to MBIA. Presented by: Charles Avaunzaff Vice President Global Trade Sales. Know Your Counterparty. Major Risks in International Trade. Country Business / Commercial Risk. Who should take the Risk and how are we going to get Paid ?.

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Presented by: Charles Avaunzaff Vice President Global Trade Sales

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  1. Global Trade Sales Presented to MBIA Presented by: Charles Avaunzaff Vice President Global Trade Sales

  2. KnowYourCounterparty

  3. Major Risks in International Trade • Country • Business / Commercial Risk

  4. Who should take the Riskand how are we going to get Paid?

  5. METHODS OF EXPORT PAYMENT

  6. WHAT ARE THE OPTIONS? • Open Account • Documentary Collection • Letters of Credit • Pre-Payment

  7. Risks in Methods of Payment Buyer Seller High Open Account Low R I Documentary Collection R S I K Letter of Credit S K Low Pre-Payment High

  8. STANDARD DOCUMENTS • BILL OF EXCHANGE OR DRAFT • TRANSPORT DOCUMENTS (OCEAN B/L, AIR WAYBILL, TRUCK B/L) • COMMERCIAL INVOICES • PACKING LIST • MISCELLANEOUS DOCUMENTS

  9. OCEAN BILL OF LADING • Receipt for the Merchandise • Contract of Carriage • Title to Merchandise

  10. Letters of Credit

  11. LETTER OF CREDIT • OPENING BANK’S GUARANTEE THAT THE SELLER’S DRAFT WILL BE HONORED, IF THE TERMS AND CONDITIONS OF CREDIT ARE MET BY THE SELLER . • MINIMAL RISK TO SELLER

  12. Letter of Credit Payment Terms • Sight • Payment is Due When Conforming Documents Are Presented • Usance - Banker’s Acceptance • Payment is Due at a Later Date up to 180 Days • Can be Paid at a Discount Before Maturity • Deferred Payment • Future Payment Undertaking Without Draft • Discount Difficult

  13. INT’L COMMERCIAL TERMS (INCOTERMS) • EX-WORKS • FAS (Free Along Side) • FOB (Free on Board) • CFR (Cost & Freight) • CIF (Cost, Insurance & Freight) • Others

  14. Some of Union Bank of California’s Ex-Im Closings • Solar panel exporter Northern California. • Grocery goods exporters in Northern California • Software exporter in the Central Valley • Seafood exporter in the Pacific Northwest • Cosmetic exporter in Southern California • Publishing company in Northern California.

  15. Current Ex-Im Deals Pending • Environmental company in Pacific Northwest. • Scrap metal exporter Southern California. • Gas valve exporters Northern California. • Environmental company Northern California

  16. Benefits for Prospects in UBOC Ex-Im Partnership Expedited loan approval process due to UBOC being a delegated authority lender Local Union Bank Trade Specialists navigate the program for the exporters. Structuring complex transactions with the support from Ex-Im Bank.

  17. Other Ways GTS can Help! There are other ways GTS can help import/export customers: • Problem: Customer wants to increase export sales but is uncomfortable with non-payment risk (commercial & political) and cannot finance foreign A/R. Solution: Export credit insurance and potential UBOC financing of foreign A/R that is credit-insured by an acceptable insurer. GTS works with several reputable export credit insurance brokers & insurers. • Problem: Customer wants to increase sales by offering invoices payable in local and/or USD. Solution: Work with F/X to provide dual currency invoices or simply invoices in local currency. • Problem: Customer processes import or export payments through another bank but is not happy with the level of service. Solution: GTS performs a “diagnostic” and proposes a Web-based service solution at competitive prices.

  18. Global Trade Sales Division Thank You

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