Institute of Commercial Management | Qualification Subject

Finance of International Trade

ICM Professional Diploma Unit

This qualification is being withdrawn, the last available series to sit the assessment for this qualification is December 2024.

The International Trade

  • The law of comparative costs
  • Origins of international trade
  • The benefits of international trade
  • The structure of international trade
  • Economic, commercial and political factors
  • Countertrade
  • Trading with Eastern Europe
  • Multinational companies and direct investment
  • International organisations seeking to facilitate world trade
  • Regional organisations seeking liberalisation

Country and Buyer Risk

  • Country risk
  • Balance of payments
  • The International Monetary Fund and the World Bank
  • Political risk
  • Buyer risk
  • Credit insurance

The Quotation

  • Delivery terms
  • Calculation of the quoted export price
  • Profit margin, pricing policy and delivery terms
  • Credit terms
  • Foreign exchange pricing

Foreign Exchange

  • Convertibility of currencies
  • Quoting in currency, the exchange risk
  • Understanding rates of exchange
  • Forward exchange contracts
  • Forward exchange rates, calculating forward exchange rates
  • Closing out forward contracts
  • Pure currency options, the wider picture
  • Avoiding the spread, euro-currency markets
  • Tender to contract cover

Agreeing a Method of Payment

  • Risks associated with the country or the buyer
  • The role of the credit controller
  • Types of methods of payment, methods of remittance

Documentary Collections

  • The bill of exchange
  • Uniform rules for collection

Documentary Credits – Obtaining the Credit

  • The definition of a letter of credit
  • Opening a documentary credit
  • The main categories of documentary credits, types of documentary credit

Documentary Credits – Securing Payment

  • Examination of a credit on receipt, amending letters of credit
  • The doctrine of strict compliance
  • Discrepancies in presentations, the pre-presentation examination
  • Action in the event of discrepancies

Banker’s Guarantees (Bonds) and Indemnities

  • Guarantees issued by local banks
  • The exporter’s liability to the bank
  • Indemnities securing the release of goods
  • Bank guarantees in support of loan or overdraft facilities
  • Custom clearance guarantees

Finance for International Trade

  • Bank finance to establish export markets – overdrafts and loans
  • Bank finance from contract to payment – overdrafts and loans
  • Credit insurance cover, bills of exchange
  • Forfeiting, factoring
  • Other sources of finance, finance for imports

Other Trading Methods

  • Consignment trading
  • Joint ventures overseas
  • Pick-a-back schemes and group selling
  • Royalty agreements and licensing

Example Candidate Response Booklet

Example Candidate Response (ECR) Booklets are a source of crucial information for Centres and Candidates as they use real candidate responses. We ask Senior Examiners to comment on five or more responses in terms of why the mark was awarded with commentary about how to improve the answer (if necessary).

Recommended Reading

Main Text:

Principles of International Trade & Payments – Peter Briggs (Blackwell Publishing)

Indicative Text:

Alternative Text and Further Reading:

Trade Finance: Payments & Services – D B Cox (Northwick Publishers)

Multi-National Finance – Buckley (Prentice Hall)

Exchange Rates & International Finance – Dufey & Giddy