Industrial Engineering (English)
Bachelor	TR-NQF-HE: Level 6	QF-EHEA: First Cycle	EQF-LLL: Level 6

General course introduction information

Course Code:

ITRD302

Course Name:

Financing International Trade

Course Semester:

Fall

Course Credits:

Theoretical	Practical	Credit	ECTS
3	0	3	6

Language of instruction:

Course Requisites:

Does the Course Require Work Experience?:

Type of course:

Compulsory

Course Level:

Bachelor

TR-NQF-HE:6. Master`s Degree

QF-EHEA:First Cycle

EQF-LLL:6. Master`s Degree

Mode of Delivery:

Face to face

Course Coordinator :

Assoc. Prof. BÜLENT GÜNCELER

Course Lecturer(s):

Assoc. Prof. BÜLENT GÜNCELER

Course Assistants:

Course Objective and Content

Course Objectives:

The purpose of this course is to prepare students to learn how to identify the need of foreign trade, the different kinds of foreign trade product , how to approach to the best appropriate choice, as well as assessing various risks to bank, buyer and sellers at international trade transactions.

Students will also gain the ability to understand and identify ways of analyzing the underlying risks associated with trade finance transactions. They will be trained to find-out how to carry out the processes involved international payment terms especially in open accounts, documentary collections, letters of credit and international contract guarantees.

In addition to all these students will be provided information about other types of international trade financing techniques such as buyers credit, government incentives, export credit agency facilities, project financing and also various financing alternatives through Turkish Eximbank products.
Furthermore, the students will see some other financing products like factoring, leasing and acceptance credits.

Through chapters, readings, and case analyses, we will discuss issues related to comparison of environmental framework between theories and reality.

Course Content:

• To recognize and identify the meaning and basics of International Trade Financing tools.
• To underline the critical importance of choosing the best among the various financing alternatives
• To explain and discuss the opportunities, benefits and structure of many different financing methods for developing international business.
• To explain and discuss the various risks in terms of finance techniques in international business life

Learning Outcomes

The students who have succeeded in this course;

Learning Outcomes

1 - Knowledge
Theoretical - Conceptual
1) - Basics of Foreign Trade Regulations
2) - The Law for Protection of Turkish Currency
3) - Decree Nr. 32 for Foreign Transactions
4) - Invisible Transactions
5) - Regulatory environment of banks and other related parties
6) - Free Trade Zones
7) - Transit Trade
8) - Boarder Trade
2 - Skills
Cognitive - Practical
3 - Competences
Communication and Social Competence
Learning Competence
Field Specific Competence
Competence to Work Independently and Take Responsibility

Lesson Plan

Week	Subject	Related Preparation
1)	• Syllabus • Discuss Course Outline, • Verifying full schedule.	Review the Syllabus
2)	• Finance • Financial System • Banking System	Homework: Assigned reading for next class session ( Chapter II )
3)	• Describe International Trade Methodologies • Identify the governing rules • Explain International Payment Systems • Explain how international relations affect international business activities	Homework: assigned reading for next class session ( Chapter III )
4)	• Chapter III. Export/Import Documentary Collections • Relationship between Exporter and Remitting Banker • Relationship between Correspondent Banks (agency arrangements) • The duties of the remitting bank • Liability of the banks and other parties involved • The rules for release of documents • Conditions for transfer of funds • Risk Areas in Documentary Collection : • Partial payments • Avalizing • Consignment of goods to banks • Release of goods on trust • Procedures for non-payment cases and underlying risks • Basics of the Uniform Rules for Collection ICC 522	Homework: assigned reading for next class session ( Chapter IV )
5)	• CHAPTER IV. Documentary Letters of Credit – • 4.a Letter of Credit as a financing product • Banker/Customer Relationship and the structure of Letter of Credit • Risk factors when issuing letters of credit. The risk points. • Why Letter of Credit is a Financing Tool ? • Case Study: Full cycle of Letter of Credit transactions. • 4.b Types of Letters of Credit • Revocable – Irrevocable • Confirmed • Standby Letters of Credit • Transferable • Back-to-Back • Deferred • Red Clause Letter of Credits • Revolving Letter Credits	Homework: assigned reading for next class session ( Chapter V )
6)	• Chapter V. .Contract Bonds and Guarantees • Types of guarantees: • Tender/bid bonds • Performance bonds • Retention money guarantees • Advance payment guarantees • Maintenance guarantees • Counter Guarantees • Risks of Guarantee Letter • Wording of Guarantees • International Banking Practices • Uniform Rules for Demand Guarantees 758 • Expiry and Cancellation • Case Study: Analysis of samples of Guaranty Letters • Discussion and reviewing the text of guarantees • Possibilities of cases which may cause a loss to the bank • Examining the wording of a range of guarantees issued by banks abroad.	Homework: assigned reading for next class session ( Chapter VI )
7)	• CHAPTER VI. . The impacts of International Trade Financing at Balance Sheet • Trade Finance versus ‘balance sheet lending’ • Understanding and controlling the cash flow • Typical users of Trade Finance products and services	Study for the mid-term exam
8)	MID-TERM EXAM	Homework: assigned reading for next class session ( Chapter VII )
9)	CHAPTER VII. Risk – The Critical Issues • Understanding, identifying and managing risk • Sovereign, Political / Country risk • Institutional risk / Bank risk • Corporate and other critical risks • Importer and Exporter’s risk • Risk mitigation, management and transfer	Homework: assigned reading for next class session ( Chapter VIII )
10)	CHAPTER IX. Export Financing • Rules of Exporting in terms of financing • Pre-export Financing • Turkish Eximbank Financing Export Tools • Country risk issues and how to cover these risks	Homework: assigned reading for next class session ( XI )
11)	CHAPTER X. Financing through Factoring – Forfaiting & Leasing • Factoring • Forfaiting • Leasing • Calculation of Average Maturities when discounting receivables	Homework: assigned reading for next class session ( XI )
12)	CHAPTER XI. Other Special Types of Conventional Trade Financing • Country Export Agency Financing • Project Financing • Using the goods in the warehouse as collateral • Asset Securitization • Syndications • Counter Trade	Editing of first draft of the project
13)	Chapter XII • Asset Securitization • Syndications • Counter Trade	Editing of first draft of the project.
14)	PREPARATIONS FOR PRESENTATIONS FOR FINAL PROJECTS
15)	PRESENTATIONS FOR FINAL PROJECTS ( IV )

Sources

Course Notes / Textbooks:	1) Trade Finance Guide, A Quick Reference for U.S. Exporters, by US Department of Commerce, Int’l Trade Administration. 2) Günceler, Bülent , Basics of Financing Foreign Trade Transactions ( 2014 )
References:	1) Course Supp. Doc. 1 Madura, Financing Int’l Trade, Section – Int’l Financial Management (2010). 2) Course Supp. Doc. 2 Tools of Export Financing at Turk Eximbank (Aug 2015). 3) Course Supp. Doc. 3 CGFS Papers – Trade Finance Developments & Issues – by BIS Jan 2014.

Course-Program Learning Outcome Relationship

Learning Outcomes	1	2	3	4	5	6	7	8
Program Outcomes
1) Adequate knowledge in mathematics, science and engineering subjects pertaining to the relevant discipline; ability to use theoretical and applied information in these areas to model and solve engineering problems.
2) Ability to identify, formulate, and solve complex engineering problems; ability to select and apply proper analysis and modelling methods for this purpose.
3) Ability to design a complex system, process, device or product under realistic constraints and conditions, in such a way so as to meet the desired result; ability to apply modern design methods for this purpose. (Realistic constraints and conditions may include factors such as economic and environmental issues, sustainability, manufacturability, ethics, health, safety issues, and social and political issues according to the nature of the design.)
4) Ability to devise, select, and use modern techniques and tools needed for engineering practice; ability to employ information technologies effectively.
5) Ability to design and conduct experiments, gather data, analyse and interpret results for investigating engineering problems.
6) Ability to work efficiently in intra-disciplinary and multi-disciplinary teams; ability to work individually.
7) Ability to communicate effectively i Turkish, both orally and in writing; knowledge of a minimum of one foreign language.
8) Recognition of the need for lifelong learning; ability to access information, to follow developments in science and technology, and to continue to educate him/herself.
9) Awareness of professional and ethical responsibility.
10) Information about business life practices such as project management, risk management, and change management; awareness of entrepreneurship, innovation, and sustainable development.
11) Knowledge about contemporary issues and the global and societal effects of engineering practices on health, environment, and safety; awareness of the legal consequences of engineering solutions.

Course - Learning Outcome Relationship

No Effect	1 Lowest	2 Low	3 Average	4 High	5 Highest

	Program Outcomes	Level of Contribution
1)	Adequate knowledge in mathematics, science and engineering subjects pertaining to the relevant discipline; ability to use theoretical and applied information in these areas to model and solve engineering problems.
2)	Ability to identify, formulate, and solve complex engineering problems; ability to select and apply proper analysis and modelling methods for this purpose.
3)	Ability to design a complex system, process, device or product under realistic constraints and conditions, in such a way so as to meet the desired result; ability to apply modern design methods for this purpose. (Realistic constraints and conditions may include factors such as economic and environmental issues, sustainability, manufacturability, ethics, health, safety issues, and social and political issues according to the nature of the design.)
4)	Ability to devise, select, and use modern techniques and tools needed for engineering practice; ability to employ information technologies effectively.
5)	Ability to design and conduct experiments, gather data, analyse and interpret results for investigating engineering problems.
6)	Ability to work efficiently in intra-disciplinary and multi-disciplinary teams; ability to work individually.
7)	Ability to communicate effectively i Turkish, both orally and in writing; knowledge of a minimum of one foreign language.
8)	Recognition of the need for lifelong learning; ability to access information, to follow developments in science and technology, and to continue to educate him/herself.
9)	Awareness of professional and ethical responsibility.
10)	Information about business life practices such as project management, risk management, and change management; awareness of entrepreneurship, innovation, and sustainable development.
11)	Knowledge about contemporary issues and the global and societal effects of engineering practices on health, environment, and safety; awareness of the legal consequences of engineering solutions.

Learning Activity and Teaching Methods

Expression
Brainstorming/ Six tihnking hats
Individual study and homework
Lesson
Reading
Homework
Q&A / Discussion
Case Study

Assessment & Grading Methods and Criteria

Written Exam (Open-ended questions, multiple choice, true-false, matching, fill in the blanks, sequencing)
Homework
Application

Assessment & Grading

Semester Requirements	Number of Activities	Level of Contribution
Attendance	1	% 20
Project	1	% 30
Final	1	% 50
total		% 100
PERCENTAGE OF SEMESTER WORK		% 50
PERCENTAGE OF FINAL WORK		% 50
total		% 100

Workload and ECTS Credit Grading

Activities	Number of Activities	Workload
Course Hours	15	45
Study Hours Out of Class	15	45
Presentations / Seminar	15	45
Project	15	45
Final	1	3
Total Workload		183