On chapter 2, I have learned the risk issues in international trade and also risk mitigation in payment method, commercial contracts, and bank guarantee. There are three types of payment methods namely clean payment, documentary collection, and documentary credit. Besides, we can learn the flow of goods and payments on this topic. This topic also explains about international commercial terms (Incoterms) that represent international rules. 

       Chapter 3 underlines the laws and regulations relating to Documentary Collection, Financial, Commercial and Official Records, Document Collection Against Payment (D / P), Document Collection Against Acceptance (D / A), Collection Instructions and Uniform Collection Rules (URC No 522). Besides that, I also learned about the advantages and disadvantages of importers, exporters, and banks involved in the documentary collection.
       Incoterm is an abbreviation for “International Commercial Terms”. This term is a very useful means of communication in chapter 4 and is actually intended to reduce the confusion between buyers and sellers.  An incoterm represents a universal concept that prevents a transaction between importer and exporter so that all parties recognize the duties, prices, risks, and obligations, as well as the logistics and transport management from the commodity exit to the importing country's reception. Incoterms are all potential ways of dividing duties and responsibilities between two parties. It is necessary for buyers and sellers to pre-deny the transportation obligations and responsibilities of the goods.

       Chapter 7 covers Special Types of Islamic and Conventional Documentary Credit of the various terms and types of documentary credit such as transferable credit, back to documentary credit, revolving documentary credit, red clause credit, green clause credit, and counter credit.

       Comprehension of Chapter 8 explains various financing facilities such as Letter of Credit and Bill Discounting Facilities, Bankers Acceptance, Trust Receipts, Foreign Currency Loan, Overdraft, Packing Credit, Shipping Guarantee and Export Credit Refinancing. Besides that, I learned about Murabahah as an alternative in Trade Interest Financing and also the whole system of Islamic trade finance modes.

       Comprehending the pre-shipment and post-shipment cycle of export credit refinancing is relevant in Chapter 9. ECR 's main objective is to facilitate exports of manufactured goods, agricultural products, and primary commodities which are halal and lawful in compliance with the principles of Syariah.

       Last but not least, the explanation in chapter 10 regarding one country's foreign currency exchange or another's currency. I also learned about Exchange Rate Quotation, Spot, Forward, Option and Money Market Hedging, and Closing Forward Exchange Contract in this chapter. I learned how to determine foreign currency based on the TT and OD terms, as well as how to calculate the swap rate, forward rate, and cross rate.

Chapter 2: I have learned about the Risks in International Trade. The risk are buyer risk, seller’s risk, commercial risk, foreign exchange risk and country risk. Meanwhile, risk mitigating are payment methods (clean payment, documentary credit and documentary collection), bank guarantee and commercial contract.

Chapter 3: I have learned about the overview of documentary collections. Next, Financial, Commercial and Official Documents, Collection under Document against Payment (D/P), Collection under Document against Acceptance (D/A), Collection Instructions and Uniform Rules for Collection (URC No 522)). Besides, I also learned about the advantage and disadvantage of Documentary Collection of importer, exporter and Bank involved.

Chapter 4: I have learned about the International Commercial Terms (INCOTERM). There are two groups of Incoterms Rules which are Rules for Any Mode of Transport (EXW, FCA, CPT, CIP, DAT, DAP, DDP) and Rules for Sea and Inland Waterway Transport (FAS, FOB, CFR, CIF). The rule used for departure is EXW, main carriage unpaid are FCA, FAS and FOB, for main carriage paid are CFR, CIF, CPT and CIP and lastly for arrival are DAP, DAT and DDP. To be concluded that E (Make goods available at own premises), F (Deliver goods to a carrier appointed by buyer), C (Contract for carriage without assuming risk of loss during shipment) and D (Bear all costs and risks needed to bring goods to place of destination).

Chapter 5/6: I have learned about the understanding the main rules of UCP 600 and a review of the important and critical opinions given under UCP 600. UCP 600 article 1 tell about the application of UCP while UCP 600 article 2 tell about the definitions. Next, UCP 600 article 6 tell about the availability, expiry date and place for presentation, Sub-article 7 (c) is tell about the ICC Opinion TA. 674 approved March 2009, UCP 600 article 9 tell about advising of credits and amendments, UCP 600 article 10 tell about amendments, UCP 600 article 12 tell about nomination, UCP 600 article 14 tell about standard for examination of documents, UCP 600 article 19 tell about ICC opinion TA. 650 approved April 2008, UCP 600 article 20 tell about ICC opinions TA. 635 approved October 2007 and TA.665 & 667 approved October 2008, UCP 600 articles 20 and 21 tell about Bill of Lading or Non-Negotiable Sea Waybill, UCP 600 article 22 tell about ICC Opinion TA. 662 approved October 2008, UCP 600 article 31 tell about Partial Drawings or Shipments, and UCP 600 article 35 tell about Disclaimer on Transmission and Translation.

Chapter 7: This chapter explained about the special types of Islamic and conventional documentary credit. There are Transferable Documentary Credit, Back to Back Documentary Credit, Revolving Documentary Credit, Red Clause Credit, Green Clause Credit and Counter Credit.

Chapter 8: I have learned about the Islamic and Conventional Trade Financing Facilities. This topic will explained about Letter of Credit and Bill Discounting Facilities, Bankers Acceptance, Trust Receipts, Foreign Currency Loan, Overdraft, Packing Credit, Shipping Guarantee, Export Credit Refinancing, Murabahah as an Alternative in Interest Financing of Trade, The Complete System of Islamic Modes of Trade Finance, Islamic Financing (Al-Mudharabah, Al-Musyarakah, Bai’al Dayn, Al-Murabahah, Al-Kafalah, Naqad, Islamic Accepted Bill) and lastly, Risk and Insurance.

Chapter 9: I have learned about the Export Credit Refinancing. This topic explained the overview of ECRi, Pre-shipment ECRi (used Murabahah and Bai al Dayn), Post-shipment (Bai al Dayn), ECRi and differentiate between Conventional and Islamic-based ECR.

Chapter 10: I have learned about the Islamic and Conventional Foreign Exchange. This topic explained about definition, Exchange Rate Quotation, Spot, Forward, Option and Money   Market Hedging, Closing Forward Exchange Contract, Calculating Swap Rate, Forward Rate and Cross Rate and lastly Current Issues.

In Chapter 2, I learnt about the trade finance involving the risk in international trade. I learn in detail about risk issue, credit risk, commercial contract which is a formal written agreement between a seller and buyer for the sale of goods, real property or services. Also, there are 3 types of payment methods that can be used in international trade such as clean payment, documentary credit, and documentary collection. 

In Chapter 3, since I already know about the payment method explained in Chapter 2, so in this chapter I focused on one of the methods which is documentary collection. This chapter explained about the Documentary Collection, Financial, Commercial and Official Documents, Collection under Document Against Payment (D/P), Collection under Document Against Acceptance (D/A), Collection Instructions, Uniform Rules for Collection (URC No 522), Advantage and Disadvantage of Documentary Collection to the Importer, Exporter, as well as to the Bank.

In Chapter 4, I learnt about Incoterm 2010. Incoterm is a short form for “International Commercial Terms”. Incoterm simplify some terms of an international sales agreement but however, it does not take the place of a sales agreement or terms and conditions and supply all terms for an international sale. It covers several terms such as Warehousing, Packing and loading, Inland freight, Terminal charges, Freight forwarder’s fees, Ocean/air freight, Duty, taxes, & customs clearance, Delivery and Security Clearances (new to 2010).

In Chapter 7, I learnt about Special Types of Islamic and Conventional Documentary Credit. This chapter explained more about the Transferable Documentary Credit, Back to Back Documentary Credit, Revolving Documentary Credit, Red Clause Credit, Green Clause Credit, and Counter Credit. 

In Chapter 8, I learnt that this chapter explained in detail about various financing facilities such as Letter of Credit and Bill Discounting Facilities, Banker Acceptance, Trust Receipts, Foreign Currency Loan, Overdraft, Packing Credit, Shipping Guarantee and Export Credit Refinancing. Besides that, I learned about Murabahah as an alternative in Trade Interest Financing and also the whole system of Islamic trade finance modes.

In Chapter 9, I also learnt about Export Credit Refinancing (ECR). This topic explained the overview of ECRi, Pre-shipment ECRi (used Murabahah and Bai al Dayn), Post-shipment (Bai al Dayn), ECRi and differentiate between Conventional and Islamic-based ECR. The main objective is to facilitate exports of manufactured goods, agricultural products, and primary commodities which are halal and lawful in compliance with the principles of Syariah. 

In Chapter 10, I learnt about Islamic and Conventional Foreign Exchange. I also learned about Exchange Rate Quotation, Spot, Forward, Option and Money Market Hedging, and Closing Forward Exchange Contract in this chapter. I learned how to determine foreign currency based on the TT and OD terms, as well as how to calculate the swap rate, forward rate, and cross rate.

 Chapter 2 - I have learned about the Risks in International Trade. The risk are buyer risk, seller’s risk, commercial risk, foreign exchange risk and country risk. Meanwhile, risk mitigating are payment methods (clean payment, documentary credit and documentary collection), bank guarantee and commercial contract.

Chapter 3 - I have learned about the overview of Documentary Collection, Financial, Commercial and Official Documents, Collection under Document Against Payment (D/P), Collection under Document Against Acceptance (D/A), Collection Instructions and Uniform Rules for Collection (URC No 522). Besides that, I also learned about the advantages and disadvantages of documentary collection for importer, exporter and banks involved.

Chapter 4 - I have learned about Incoterm 2010. Incoterm is a short form for “International Commercial Terms”. Incoterm simplify some terms of an international sales agreement but however, it does not take the place of a sales agreement or terms and conditions and supply all terms for an international sale. It covers several terms such as Warehousing, Packing and loading, Inland freight, Terminal charges, Freight forwarder’s fees, Ocean/air freight, Duty, taxes, & customs clearance, Delivery and Security Clearances (new to 2010).

 
Chapter 7 - I have learned about Special Types of Islamic and Conventional Documentary Credit. This chapter explained more about the Transferable Documentary Credit, Back to Back Documentary Credit, Revolving Documentary Credit, Red Clause Credit, Green Clause Credit, and Counter Credit. 

Chapter 8 - I have learned about different financing facilities such as Letter of Credit and Bill Discounting Facilities, Bankers Acceptance, Trust Receipts, Foreign Currency Loan, Overdraft, Packing Credit, Shipping Guarantee and Export Credit Refinancing. Besides that, I have learned about Murabahah as an Alternative in Interest Financing of Trade and also the complete system of Islamic modes of trade finance.

Chapter 9 - I have learned that the process of pre-shipment and post-shipment cycle of export credit refinancing is important in international trade. ECR 's main objective is to facilitate exports of manufactured goods, agricultural products, and primary commodities which are halal and lawful in compliance with the principles of Syariah. 

Chapter 10 - I have learned about the Islamic and Conventional Foreign Exchange. This topic explained about definition, Exchange Rate Quotation, Spot, Forward, Option and Money   Market Hedging, Closing Forward Exchange Contract, Calculating Swap Rate, Forward Rate and Cross Rate and lastly Current Issues.

In Chapter 2, I learnt about Risk in International Trade where it is covered for risk issues, credit risk analysis, commercial contract and payment method in international trade. There are three (3) types of payment method which are clean payment, documentary credit and documentary collection. The risk issues include buyer’s risk, seller’s risk, commercial risk, foreign exchange risk and country risk. 

In Chapter 3, it was the continuation of the payment method of documentary collection from Chapter 2. Documentary collection is an agreement in which the exporter sends goods to the importer and the exporter sends the shipping documents and drafts to his bank for further delivery to the importing bank for payment and/or receipt from the importer on his behalf. It also covered financial, commercial and official documents, collection under Document Against Payment (D/P), collection under Document Against Acceptance (D/A), collection instructions, uniform rules for collection (URC No 522) as well as advantage and disadvantage of Documentary Collection. 

In Chapter 4, I have learned about Incoterms 2010 where it stands for International Commercial Terms. The purpose of Incoterms 2010 is to simplify some terms of an international agreement. It only applied to the contract of sale. It has rules for any mode of transport and rules for sea and inland waterway transport. For the rules for any mode of transport includes Ex Works (EXW), Free Carrier (FC), Carriage Paid To (CPT), Carriage and Insurance Paid To (CIP), Delivered at Terminal (DAT), Delivered at Place (DAP) and Delivered Duty Paid (DDP). For the rules for sea and inland waterway transport includes Free Alongside Ship (FAS), Free on Board (FOB). Cost and Freight (CFR) and lastly Cost Insurance and Freight (CIF). To be conclude, E (make goods available at own premises), F (deliver goods to a carrier appointed by buyer), C (contract for carriage without assuming risk of loss during shipment) and D (bear all costs and risks needed to bring goods to place of destination). 

For Chapter 5 and Chapter 6 which are about Interpretation and Application of UCP 600. It talked about understanding the main rules of UCP 600 and the important and critical opinion given under UCP 600. It is under the UCP 600 article 1, 2, 6, 7(c), 9, 10, 12, 14, 19, 20, 21, 22, 31 and lastly article 35. UCP 600 article 1 tell about the application of UCP, UCP 600 article 2 tell about the definitions and UCP 600 article 6 tell about the availability, expiry date and place for presentation, Sub-article 7 (c) is tell about the ICC Opinion TA. 674 approved March 2009, UCP 600 article 9 tell about advising of credits and amendments, UCP 600 article 10 tell about amendments, UCP 600 article 12 tell about nomination and UCP 600 article 14 tell about standard for examination of documents. Then, UCP 600 article 19 tell about ICC opinion TA. 650 approved April 2008, UCP 600 article 20 tell about ICC opinions TA. 635 approved October 2007 and TA.665 & 667 approved October 2008, UCP 600 articles 20 and 21 tell about Bill of Lading or Non-Negotiable Sea Waybill, UCP 600 article 22 tell about ICC Opinion TA. 662 approved October 2008, UCP 600 article 31 tell about Partial Drawings or Shipments, and UCP 600 article 35 tell about Disclaimer on Transmission and Translation.

In Chapter 7, it talked about Special Types of Islamic and Conventional Documentary Credit. This chapter explained about Transferrable Documentary Credit, Back to back Documentary Credit, Revolving Documentary Credit, Red Clause Credit, Green Clause Credit and Counter Credit. 

For Chapter 8, it explained in detail about various Islamic and Conventional Trade Financing Facilities. It includes Letter of Credit, Bill Discounting, Bankers Acceptance, Trust Receipts, Foreign Currency Loan, Overdraft, Packing Credit, Shipping Guarantee and Export Credit Refinancing. I also learnt about Murabahah as an alternative interest financing of trade, risk and insurance, the complete system of Islamic modes of trade finance as well as Islamic financing such as mudharabah, ,musyarakah, bai’ al dayn, murabahah, kafalah, naqad and Islamic accepted bill. 

In Chapter 9, it explained more in detail about Export Credit Refinancing (ECR). It is a scheme where EXIM Bank provide short-term export financing to direct and indirect exporter, via commercial banks prior to or upon shipment of the products. The purpose is to export of manufactured products, agricultural products and primary commodities that are halal and permissible according to Shariah principles. There are two (2) types of ECR which are ECR-i pre-shipment and ECR-i post-shipment. ECR-i pre-shipment is available to a direct and indirect exporter.

Lastly, in Chapter 10, I have learned about Islamic and Conventional Foreign Exchange. Foreign Exchange means the exchange of a currency of one country or the currency of another. It involved between importer and exporter. There also exchange rate quotation, spot, forward, option and money market hedging as well as closing forward exchange contract. I also learn how to calculate swap rate, forward rate and cross rate. 

Chapter 2

In chapter 2, I have learned about risk issues in international trade which is country risk, foreign exchange risk, buyer’s risk, seller’s risk and commercial risk. For mitigation of risk, we can use bank guarantee, commercial contract and payment method. I also learnt about the credit risk analysis in international trade. There are 3 payment methods in international trade which is clean payment, documentary credit and documentary collection.

CHAPTER 3

In chapter 3, I have learned about documentary collection in details. There are 26 article that related to documentary collection. The article related are as follows; application, definition, parties to a collection, collection Instruction, presentation, acceptance, release of commercial documents, creation of documents, good faith and reasonable care, documents vs goods, services and performances, disclaimer for acts of an instructed party, disclaimer on documents received, disclaimer on effectiveness of documents, disclaimer on delays, loss in transit and translation, force majeure, payment without delay, payment in local currency, payment in foreign currency, partial payments, interest, charges and expenses, acceptance, promissory notes and other instruments, protest, case of need, and advices.

CHAPTER 4

In chapter 4. I have learned about the incoterms. It is to simplify some terms of an international sales agreement. The terms covered by incoterms are warehousing, packing and loading and etc. There are 2 new rules in incoterms which is DAT and DAP. The rules for any mode of transport are EXW, FCA, CPT, CIP, DAT, DAP, and DDP. Then, the rules for sea and island waterway transport are FAS, FOB, CFR, and CIF.

CHAPTER 7

In this chapter, I have learned about the special types of Islamic and conventional documentary credit. This chapter covers topic about Transferable Documentary Credit, Back to Back Documentary Credit, Revolving Documentary Credit, Red Clause Credit, Green Clause Credit and Counter Credit 

CHAPTER 8

In chapter 8,  I learnt about Islamic and conventional trade financing facilities which is Letter of Credit and Bill Discounting Facilities, Bankers Acceptance, Trust Receipts, Foreign Currency Loan, Overdraft, Packing Credit, Shipping Guarantee, Export Credit Refinancing, Murabahah as an alternative in interest financing of trade, the complete system of Islamic modes of trade finance, Islamic Financing (Al-Mudharabah, Al-Musyarakah, Bai’al Dayn, Al-Murabahah, Al-Kafalah, Naqad, Islamic Accepted Bill), and Risk and Insurance

CHAPTER 9

In this chapter, I learnt about export credit Refinancing-I whereby Exim Bank provide short term export financing to direct and indirect exporter. It is to promotes the export of manufactured products, agricultural products, and primary commodities that are halal and permissible by Shariah. There are two types of ECR-I which is ECR-i pre-shipment (Murabaha and Bay al-dayn) and ECR-i post-shipment (Bay al-dayn).

CHAPTER 10

In this chapter, I learnt about the Islamic and conventional foreign exchange. Foreign Exchange is exchange of a currency of one country or the currency of another. This topics explained about exchange rate quotation, Spot, Forward, Option and   Money   Market Hedging, Closing Forward Exchange Contract, Calculating Swap Rate, Forward Rate and Cross Rate, Current Issues. 

Chapter 2: In this chapter is about risks in the international trade. The risk can categorize with risk issues in international trade and credit risk. It is also explain about commercial contact and payment method. The risk issues divide by six risk which is buyer’s risk, seller’s risk, commercial risk, foreign exchange risk, country risk and also force major. Due to pendamic Covid-19, the buyer face problem the late arrival of goods because of the world lock-down. The payment methods in international trades have three, clean payment, documentary collection and documentary credit. 

Chapter 3: I learnt about documentary collection. In this topic explain about the overview of documentary collection, the flow and the advantages and disadvantages to the buyer and seller. I also learnt about the rules collection under URC 522 with 26 Articles.

Chapter 4: This chapter is cover about International Commercial Terms (Incoterms) 2010. Incoterms 2010 has seven rules for any mode of transport. The rules are Ex Work (EX), Free Carrier (FCA), Carriage Paid To (CPT), Carriage and Insurance Paid To (CIP), Delivered At Terminal (DAT), Delivered At Place (DAP) and Delivered Duty Paid (DDP). The purpose of used Incoterms is to simplify terms of an international sales agreement. So, the buyer or seller must alert with the rules if change.

Chapter 5/6: I learnt about Uniform Customs and Practice for Document Credits (UCP). This chapter covers the interpretation and application of UCP 500 and 600. UCP is a set of rules on the issuance and use the letter of credit in international trade. The commercial parties, particularly banks developed the methods for handling letter of credit in international trade finance. The method is standardizes by International Chamber of Commerce (ICC).

Chapter 7: I learnt about special types of Islamic and conventional documentary credit. This chapter covers the topics transferable documentary credit, back-to-back documentary credit, revolving documentary credit, red clause credit, green clause credit and counter credit. 

Chapter 8: I learnt about Islamic and conventional trade financing facility. I gain knowledge with explore about letter of credit and bill discounting facilities, banker acceptance, trust receipts, foreign currency loan, overdraft, packing credit, shipping guarantee and export credit refinancing in Islamic and conventional. It is also explains about Islamic financing. 

Chapter 9: In this chapter is cover about Export Credit Refinancing (ECR). The objective of ECR is to promote the export of manufactured product, agricultural products and primary commodities that country. It is also explain about overview of ECR, pre-shipment ECR, post-shipment ECR and conventional vs Islamic-based ECR. From this chapter I can differentiate between conventional and Islamic ECR. 

Chapter 10: This chapter is cover about Islamic and conventional foreign exchange. This chapter explain the exchange rate quotation, spot, forward, option, money, market hedging. In this chapter also know how to calculate the swap rate, forward rate and cross rate. I also learnt about the closing the forward exchange contract 

Topic 2 : there are certain risks and issue that occurs in international trade. There are 6 risk which is buyer’s risk, seller’s risk, commercial risk, foreign exchange risk, country risk and force major. On this chapter we also learned on how to mitigate the risk. We also learned on 4 method trade settlement which is open account, advance payment, documentary credit and documentary collection. 

Topic 3: under this topic, I gain knowledge and understanding on overview of Documentary Collection, Financial, Commercial and Official Documents, Collection under Document Against Payment (D/P), Collection under Document Against Acceptance (D/A), Collection Instructions and Uniform Rules for Collection (URC No 522). Through this topic, I also learned The advantages and disadvantages of documentary collection for importer, exporter and banks involved

Topic 4 : basically, topic 4 is about international commercial terms (incoterms). background of incoterms 2010, and the purpose of using incoterms. Besides, terms that covered by incoterms include, warehousing, paking and loading, inland freight, etc. There are 2 groups of incoterms rules which are rules for any mode of transport and rules for sea and inland waterway transport. Any modes of transport can use EXW, FCA, CPT, CIP, DAT, DAP,DDP. While for sea and inland transport using FAS, FOB, CFR, CIF. 

Topic 7 : on this topic I have learned about special types of islamic and conventional documentary credit. Which is Transferable Documentary Credit, Back to Back Documentary Credit, Revolving Documentary Credit, Red Clause Credit, Green Clause Credit, Counter Credit. I can differentiate on the purpose and the flow of each of them. 

Topic 8 : I have learned about different financing facilities, such as Letter of Credit, Bill Discounting Facilities, Bankers Acceptance, Trust Receipts, Foreign Currency Loan, Overdraft, Packing Credit, Shipping Guarantee and Export Credit Refinancing. Besides that, I have learned about Murabahah as an Alternative in Interest Financing of Trade and also the complete system of Islamic modes of trade finance.

Topic 9 : this chapter we learned on Export credit refinancing. Overview of ECR, Pre-shipment ECR, Post-shipment ECR, Conventional vs Islamic-based ECR. Basically, the objective of it to promote the export of manufactured products, agricultural products and primary commodities that are halal and permissible according to syariah principles. Besides, who are eligible to ECR. 

Topic 10 : On this topic, i have learned about the Islamic and Conventional Foreign Exchange. I gained knowledge on definition of Exchange Rate Quotation, Spot, Forward, Option and Money Market Hedging, Closing Forward Exchange Contract, Calculating Swap Rate, Forward Rate and Cross Rate and lastly Current Issues.

CHAPTER 1

In chapter 1, I have learned more about definition, theories and concept of elements in this subject such as definition of Islamic. In this chapter also I have learned benefit and impact that one country can gain from international trade activity. I also learn international trade pattern that carried out by the world. 

CHAPTER 2

In chapter 2, I have learned on risk issues appear in international trade. In international trade, there have certain risk such as buyer risk, seller risk, foreign exchange risk and so on. Credit analysis also have been discussed in this chapter which is on behalf of bank’s perspective and customer’s perspective.  In this chapter also I have learned regarding payment method in international trade which is clean payment, documentary credit and lastly documentary collection. 

CHAPTER 3

In chapter 3, I have learned regarding overview of documentary collection which focus on concept and definition. Next, I also have learned more on financial, commercial and official documents. In this chapter we also learned many documentations such as Collection Under Document Against Payment (D/P), Collection Under Document Against Acceptance (D/A). This chapter also discuss on Collection Instructions, Uniform Rules for Collection (URC No 522)), advantage and disadvantage of documentary collection to importer, exporter and bank.

CHAPTER 4

In chapter 4, I have learned on incoterm 2010 which is refer to the issue of transporting products from the seller (exporter) to the buyer (importer). Incoterms also include carrying products, covering the costs of transport itself, insurance costs, cost of risk transfer for the condition of products at various points in the transport process. There have many categories in incoterm 2010 such as Ex Works (EXW), Free  Carier (FCA), Free Alongside Ship (FAS), Free on Board (FOB), Cost and Freight (CFR), Cost, Insurance & Freight (CIF), Carriage Paid To(CPT), Cost Insurance Paid To (CIP), Deliver at Frontier (DAF), Delivered Ex Ship (DES), Delivered Ex-Quay(DEQ), Delivered Duty Unpaid (DDU) and Delivered Duty Paid (DDP).

CHAPTER 5 & 6

In chapter 5 and 6, I have learned on applying UCP 600 and ISBP. In this chapter, we learned on concept of “Modify or Exclude”, No reference to “unless otherwise stipulated in the credit” throughout UCP 600 UCP applicable when the LC expressly indicates that it is subject to these “rules” and Retention of Standby Letters of Credit. In this chapter we also learned on many articles related to UCP 600. 

CHAPTER 7

In chapter 7, have learned on special types of islamic and conventional documentary credit. There have many types which focus on conceptual and application such as Transferable Documentary Credit, Back to Back Documentary Credit, Revolving Documentary Credit, Red Clause Credit, Green Clause Credit and Counter Credit. This chapter also covered regarding Assignment of Proceeds and Standby Letter of Credit.

CHAPTER 8

In chapter 8, I have learned on islamic and conventional trade financing facilities. In trade financing, there have many types such Letter of Credit and Bill Discounting Facilities, Bankers Acceptance, Trust Receipts, Foreign Currency Loan, Overdraft, Packing Credit, Shipping Guarantee, Export Credit Refinancing, Murabahah as an Alternative in Interest Financing of Trade, The Complete System of Islamic Modes of Trade Finance Islamic Financing – Al-Mudharabah, Al-Musyarakah, Bai’al Dayn, Al-Murabahah, Al-Kafalah, Naqad, Islamic Accepted Bill, Risk and Insurance.

CHAPTER 9

In chapter 9, this chapter will focus more on export credit refinancing that available in international trade which will be focus on overview, conceptual, definition and also conceptual. In this chapter also have two types which are pre-shipment ECR and also post-shipment of ECR. In pre-shipment ECR contain two contract which are Al-Murabahah and Bai Ad-Dayn while in post-shipment ECR only contain one contract which is Bai Ad-Day. This chapter also discuss on method on applying ECR-i. In this chapter also we learn on different between Islamic and conventional-based ECR. 

CHAPTER 10

In chapter 1, I have learned on islamic and conventional foreign exchange. This chapter covered on definition, conceptual and application part regarding to this topic.  This topic also discusses more on Exchange Rate Quotation, Spot, Forward, Option and Money Market Hedging. Hence, it’s also discussed more on related to Closing Forward Exchange Contract, calculating Swap Rate, Forward Rate and Cross Rate and lastly on current issues

CHAP 2 – In chapter 2, I’ve learned that there is 4 methods in International Trade. 1. Open Account, 2. Advanced Payment, 3. Documentary Credit and 4. Documentary Collection. Besides that, the risks issues in International Trade. There’s buyer’s risk, seller’s risk, foreign exchange risk and country risk. We can relate one of this type of risk in the situation of the Covid-19 pandemic. Due to the virus, most country’s international trade are affected and could not continue their tradings. This is because in other country’s law orders the companies to hold back their tradings to reduce the hassle during the pandemic.

CHAP 3 – I learned that the subtopic of Documentary Collection had a broader knowledge under this chapter.  Generally, a documentary collection is when an exporter with an importer deals with business in 3 types of payment. It focuses more on the pros and cons f Documentary Collection, the financial, commercial and official document collection. The Document Against Payment (D/P), Document Against Acceptance (D/A), Collection Instructions and also Uniform Rules for Collection (URC No 522).

CHAP 4 – Incoterms is the main topic in this chapter. It is known to be a set of instruction used in global transportation of goods. There are several rules under Incoterms, that is divided into 2. First,  Rules for Any Mode of Transport, then, Rules for Sea and Inland Waterway Transport. I could recall that EX WORKS (EXW) is to make sure products are readily available. The rule used for departure is EXW, while the main carriage unpaid are FCA, FAS and FOB and for main carriage paid are CFR, CIF, CPT and CIP and lastly for arrival are DAP, DAT and DDP. 

CHAP 5 – This chapter is regarding UCP 600. It is a uniform custom and practices for documentary, a set of rules agreed by ICC to issue Letter of Credit. Financial Institutions that uses these rules are commercial banks, Takaful and insurance company and investment banks. The history behind UCP 600 is that it was originally named UCP 500 in 1953 with 47 sections. Today, it has been modified and simplified to 39 sections and approved by Banking Commission of ICC that began in 1^st of July 2007.

CHAP 7 - Special types of Islamic and conventional documentary credit is highlighted under this chapter. The subtopics learned from this chapter are Transferable Documentary Credit, Back to Back Documentary Credit, Revolving Documentary Credit, Red Clause Credit, Green Clause Credit and Counter Credit. Suprisingly, I learned B2B LC even more deeply from this chapter under the assigned case study. I also learned that there is a difference between B2B LC and Transferrable Letter of Credit. I learned the process and relations from one step to another and the role of exporter, middleman and importer. 

CHAP 8 – In this chapter we discuss more on Islamic and Conventional Trade Financing Facilities. It explains about various types of trading facilities such as Letter of Credit and Bill Discounting Facilities, Bankers Acceptance, Trust Receipts, Foreign Currency Loan, Overdraft, Packing Credit, Shipping Guarantee, Export Credit Refinancing. The Islamic mode of trading financing facilities are identified as Murabahah as an Alternative in Interest Financing of Trade, The Complete System of Islamic Modes of Trade Finance, Islamic Financing (Al-Mudharabah, Al-Musyarakah, Bai’al Dayn, Al-Murabahah, Al-Kafalah, Naqad, Islamic Accepted Bill) and lastly, Risk and Insurance.

CHAP 9 – Export Credit Refinancing is the main topic under this chapter. This topic exposed more on ECRi, Pre-shipment ECRi (used Murabahah and Bai al Dayn), Post-shipment (Bai al Dayn), ECRi and differentiate between Conventional and Islamic-based ECR.

CHAP 10 – Foreign Exchange plays a vital role in the global economic. Therefore, under this chapter it gives me an exposure on the Islamic and Conventional Foreign Exchange. During the global pandemic of Covid-19, the foreign exchange industry were definitely affected by the situation and currencies fluctuated, purchasing power were disturbed, effecting the Supply and Demand curve. For example, New Straits Times newspaper stated “Covid-19 started in Wuhan in November 2019. Official news came in December and by January 2020 there were 24 cases in Malaysia. The ringgit path shows Covid-19 pushed it from the average of RM4.10 before the pandemic to RM4.35 per US dollar by April 2020. This is a 6.1 percent depreciation.”

CHAPTER 3

From this chapter, I was able to learned the details about documentary collection.  The process or arrangement of the documents in collection cycle.  The risk that faced by seller.  And the most important thing, I learned the details about documentary collection in 26 article from URC 522.

CHAPTER 4

Chapter 4 is about International Commercial Term or INCORTEMS.  The definition of incorterms, the purpose of incortems and also the rules for any mode of transport.

CHAPTER 5

This chapter is about UCP 600 or before this it was called UCP 500.  UCP 600 consist of 39 section about International trade and had been use until today.  Before UCP 600, we used UCP 500 as the references where consist of 47 sections overall.  Some sections was being change and UCP 600 started to be used on 1^st July 2017.

CHAPTER 7

Chapter 7 is about the Islamic and Coventional Documentary Credit.  This chapter consist of the types of Documentary credit or we called it as Letter of Credit.  The types of LOC are transferable LOC where consist of 3 parties where the first beneficiary or the intermediaries could assign the LOC to another party or the second beneficiary.  The second LOC is back-to-back LOC where can issue more than one letter of credit.  And the third one is red clause LOC and the last one is Green House letter of credit. 

CHAPTER 8

In chapter 8, what I already learned were about Islamic and Conventional Trade Financing Facilities.  This chapter explain about the financial transaction that involves in Islamic and Conventional International trading.  Also the contracts in Trade Finance likes Al-Mudharabah, Al-Musyarakah etc.

CHAPTER 9

Chapter 9 teach me about ECR or Export Credit Refinancing.  The meaning of ECR-I which is the process where a scheme provides short-term export financing to direct and indirect exporter via commercial banks.  The concept of pre-shipment financing also the objectives of IECR where to promote the export of manufactured products, agriculture and primary commodities that halal. 

CHAPTER 10

In this last chapter, I learned about Islamic and Conventional Foreign exchange.  As we all know, International trade means that we connect with exporter or importer all over the world that used difference currency, so in this chapter I got to know about the details, process about foreign exchange.  This foreign exchange will always be changing from time to time so important for us to refer to exchange rate quotation.  And also the calculation involves in exchanging the currency.

In Chapter 1, I have learned about free Trade occurs when a government does not attempt to influence, through quotas or duties, what its citizens can buy from another country or what they can produce and sell to another country. The Benefits of Trade allow a country to specialize in the manufacture and export of products that can be produced most efficiently in that country.

In Chapter 2, I have learned about the major international risks for businesses include foreign exchange and country risks. Foreign exchange risk is the risk of currency value fluctuations, usually related to an appreciation of the domestic currency relative to a foreign currency.  Political and country risk happens when countries change policies that might negatively affect a business, such as trade barriers. Also, I learned about Credit Risk Analysis and Commercial Contract in International Trade.

In Chapter 3, I have learned about a documentary collection is a process by which an exporter's bank collects funds from the importer's bank in exchange for documents detailing shipped merchandise. Also, I learned about Collection under Document Against Payment (D/P), Collection under Document Against Acceptance (D/A), Collection Instructions, Uniform Rules for Collection (URC No 522) and Advantage and Disadvantage of Documentary Collection.

In Chapter 4, I have learned about Incoterms are the standardized rules laid out by the International Chamber of Commerce (ICC) which explain the most commonly used international trade terms. Incoterms 2010 refer to the issue of transporting products from the seller (exporter) to the buyer (importer). Incoterms 2010 defines 11 rules, which are broken down into two categories based on method of delivery: 1) all modes of transport and 2) sea and inland waterways only.

In Chapter 5, I have learned about The Uniform Customs and Practice for Documentary Credits (“UCP”) 600 are international rules published by the International Chamber of Commerce (ICC) with the aim of standardising international banking practice in relation to LCs. It is a set of 39 articles on issuing and using Letters of Credit, which applies to 175 countries around the world.

In Chapter 6, I have learned about Islamic and Conventional Documentary Credit. A letter of credit is a document sent from a bank or financial institute that guarantees that a seller will receive a buyer's payment on time and for the full amount. Banks collect a fee for issuing a letter of credit. Also, I learned about Forms of Documentary Credit, Application for Documentary Credit and Presentation/Negotiation and Assignment of Proceeds.

In Chapter 7, I have learned about Special Types of Islamic and Conventional Documentary Credit. There are various types of letter of credit (LC) prevails in the trade transactions. They are Transferable Documentary Credit, Back-To-Back Documentary Credit, Revolving Documentary Credit, Red Clause Credit, Green Clause Credit and Counter Credit.

In Chapter 8, I have learned about banks play important role in facilitating and financing international trade transactions thereby leading to the growth of the overall economy. Today banks can provide various trade finance facilities to help companies in their trading activities by giving various types of advances to importers and exporters. As such the role of a bank is complementary to the business growth of a company, local as well as international.

In Chapter 9, I have learned about Export Credit Refinancing-i (ECR-i) provides an alternative short term pre- and post-shipment financing to direct/indirect exporters to promote export of manufactured products, agriculture products and primary commodities via the provision of Shariah compliant financing facilities. The pre-shipment ECR-i facility facilitates the production of eligible goods for export prior to shipment and to encourage the backward linkages in industrial development. The post-shipment ECR-i facility bridges the funding requirement of exporter from shipment to receipt of payment of the export bill.

In Chapter 10, I have learned about Foreign Exchange (forex or FX) is a global market for exchanging national currencies with one another. The currency markets are also further divided into spot markets which are for two-day settlements and the forward, swap and options markets. Spot & forward rates are settlement prices of spot & forward contracts while cross rates are the exchange rate between two unofficial currencies. Also, I learned about Closing Forward Exchange Contract and how to Calculating Swap Rate, Forward Rate and Cross Rate.

Chapter 1: These chapters explain about trade theory, such as benefits of trade, pattern of international trade, implications for business and others. The Benefits of Trade allow a country to specialize in the manufacture and export of products that can be produced most efficiently in that country. There are many pattern display of international trade but the patterns that are easy to understand are Arab Saudi or China. 

Chapter 2:These chapters about risk in international trade such as country risk, force major, buyer’s risk, seller’s risk, foreign exchange risk and commercial risk. This chapter also explains about risk mitigation such as commercial contract, bank guarantee and payment methods. There are three types of payment method, clear payment, documentary collection and documentary credit. From three methods we can choose the best base on benefit that method can provide, such as security, cost and others.

Chapter 3: These chapters about laws and regulation relate to Documentary Collection, financial, Commercial and Official Documents, collection under Document Against Payment (D/P), Collection under Document Against Acceptance (D/A), Collection instructions and Uniform Rules for Collection (URC No 522) . From this chapter I also learn about advantage and disadvantage of Documentary Collection for importer, exporter and bank.

Chapter 4: These chapters are explaining about incoterms, the incoterms or International Commercial Terms are a series of pre-defined commercial terms publishes by the International Chamber of Commerce relating to international commercial law.  Function incoterm are Take the place of a sales agreement or terms and conditions and Supply all terms for an international sale. There are many term covered by incoterms such as warehousing, packing and loading, delivery and others and incoterm divide by two group which are Any Mode of Transport (EXW, FCA, CIP, CPT,DAT, DPP,DAP) and Rules for Sea and Inland Waterway Transports (FAS, FOB,CFR, CIF).

Chapter 5: This chapter is explaining about Uniform Customs and Practice of Document Credit (UCP). This chapter covers the interpretation of UCP 500 and 600.

Chapter 7: These chapters are explaining about special types of Islamic and Conventional Documentary Credit. This chapter covers about Transferable Documentary Credit, Back to Back Documentary Credit, Revolving Documentary Credit, Red Clause Credit, Green Clause Credit and Counter Credit. From this chapter I can compare between Islamic and Conventional Documentary Credit.

Chapter 8: These chapters about Islamic and Conventional Trade Financing Facilities. It include Letter of Credit and Bill Discounting Facilities, Bankers’ Acceptance, Trust Receipts, Foreign Currency Loan, Overdraft, Packing Credit, Shipping Guarantee and Export Credit Refinancing. I also learn about murabahah as an alternative in interest financing of trade.

Chapter 9: These chapters about Export Credit Refinancing. From this chapter I have learned about Overview of ECR, Pre-shipment ECR, Post-shipment ECR and Conventional vs Islamic-based ECR.  ECR-I is a scheme whereby Exim Bank (EB) provide short-term export financing to direct and indirect exporter, via commercial banks prior to or upon shipment of the products.

Chapter 10: From this chapter I learn about Exchange Rate Quotation, Spot, Forward, Option and Money Market Hedging and Closing Forward Exchange Contract., calculation Swap Rate, Forward Rate and Cross Rate and the last about Current Issue.

Second chapter, In international trade, I have learned about the issues of risk. There are some risks in international trade, such as buyers risk, sellers risk, currency risk, etc. In this chapter, on behalf of bank 's perspective and customer perspective, the credit analysis was also discussed. Through this chapter I have also learned about clean payment, documentary credit and, lastly, documentary payment strategies through foreign trade.

Third, I learned about a documentary collection overview that focuses on the concept and definition. Next, on the political , commercial and official papers, I also learned more. In this section, we learned many documents, including the Document Against Payment (D / P) Document Collection Against Acceptance (D / A). This chapter also discusses the collection instructions, the Uniform collection rules (URC No 522), the benefit and the disadvantage for importers , exporters and banks to collect documents.

Fourth, the key theme of this chapter is Incoterms. It is known to be a set of guidelines used to transport goods globally. Under Incoterms there are several rules, divided into 2. First, Regulations on any transportation mode, then rules on transportation by seas and inland waters. In order to ensure that the goods are readily available, I must recall EX WORKS (EXW). For leaving, the rule is EXW while the most relevant unpaid carriage is FCA, FAS and FOB and the main carriage charged is CFR, CIF, CPT and CIP.

Fifth and sixth, it was UCP 600 and ISBP that I knew. This chapter contains no reference to the "modification or exclusion" concept, which is applicable throughout UCP 600 UCP, except as otherwise stipulated in this loan, if LC explicitly indicates it is subject to such 'rules' and the retention of standby credit letters. We have also learned in this chapter about many UCP 600 articles.

Seventh, learned about particular types of Islamic and traditional documentary credit. Many types are used to design and implement projects, such as transferable documents, document loans, refundable document credit, red clause loans, green clause loans and counter loans. There are many different types. This chapter also dealt with the distribution of proceeds and the credit note.

Eight, I learnt about facility financing for Islamic and conventional trade. There are many different forms of commercial financing: a letter of credit, bill discounting, a lender approval, bill of fact, foreign currency credit, overdrafts, leasing, shipping guarantees, export credit refinancing, murobahah (Murabahah as an alternative to trade finance).

Nineth, Concentrate more on refinancing export credits in international trade, with an overview, conception, definition and conceptual focus. The following chapter also contains two types of ECR pre-shipping and ECR post-shipping. In the ECR for pre-shipment two agreements are: Al-Murabahah and Bai Ad-Dayn, while in the ECR for post-shipment there is only one which is the Bai Ad-Day contract. The method of ECR-i implementation is also discussed in this chapter. 

The last chapter is about Islamic and secular money. This chapter dealt with this subject matter in terms of interpretation, conceptuality and application. More on the quotations, spot, forward, option and hedging of money markets, is discussed in this subject. More on the closing forward exchange agreement, the measurement of the swap rate, advance rate and cross rate, and finally existing issues are thus also discussed.

Chapter 2: I have learned about the risk issues that can occur in international trade which are the country risk, foreign exchange risk, commercial risk, credit worthiness of the buyer and credit risk. 

Chapter 3: I have learned about the documentary collections URC 522 which include the Financial, Commercial and Official Documents, Collection under Document Against Payment (D/P), Collection under Document Against Acceptance (D/A), Collection Instructions, Uniform Rules for Collection (URC No 522)), Advantage and Disadvantage of Documentary Collection to the Importer, Exporter and the Bank. 

Chapter 4: I have learned about the changes and updates for Incoterms 2020 Rules which are the Delivery at Place Unloaded, Insurance cover differs between CIF and CIP, The Listing of Costs, Security Requirements, Own transport, FCA and Bills of lading and the Presentation and design. 

Chapter 5: I have learned about the Transferable Documentary Credit, Back to Back Documentary Credit and the Revolving Documentary Credit.

Chapter 6: I have learned about the Red Clause Credit, Green Clause Credit and the Counter Credit.

Chapter 7: I have learned about the Islamic and conventional trade financing facilities which include the Letter of Credit and Bill Discounting Facilities, the Bankers’ Acceptance, the Trust Receipts, the Foreign Currency Loan and the Overdraft. 

Chapter 8: I have learned about the Islamic and conventional trade financing facilities which include the Packing Credit, the Shipping Guarantee, the Export Credit Refinancing, the Murabahah as an Alternative in Interest Financing of Trade, The Complete System of Islamic Modes of Trade Finance, the Islamic Financing – Al-Mudharabah, Al-Musyarakah, Bai’al Dayn, Al-Murabahah, Al-Kafalah, Naqad, Islamic, the Accepted Bill and the Risk and Insurance. 

Chapter 9: I have learned about the export credit refinancing which this topic includes the Pre-shipment ECR, the Post-shipment ECR and the Conventional vs Islamic-based ECR.

Chapter 10: I have learned about the Islamic and conventional foreign exchange which discuss more on the Definition, the Exchange Rate Quotation, the Spot, Forward, Option and   Money Market Hedging, the Closing Forward Exchange Contract, the Calculating Swap Rate, Forward Rate and Cross Rate and the Current Issues. 

In this topic I have learned about the introduction of the international trade based on the theory, regulation, international trade relations with the economy and Islamic perspective. Trade allow a country to specialize in the manufacture and export of products that can be produced by most efficiently in that country.

In this topic I learned about the risk issues in international trade where includes commercial contract, payment methods and bank guarantee. I also learned on the method of international trade settlement which consist of clean payment (open account and advance payment), documentary collection and documentary credit. The clean payment made based on trust between buyer and seller.

In this topic I have learned about the Islamic and conventional documentary collections. The URC 522, 1995 revision contain 26 articles that shall apply to all collections and bind all the parties in it.

In this topic I have learned about the incoterms where the current revision is in a year 2010 to become effective in January 2011. There are few changes made in this new incoterm. This include two new rules introduce in this current revision which is delivered at terminal (DAT) and delivered at place (DAP).

In this topic I have learned about UCP 600 that is a set of rules which govern international documentary credit practice.

In this topic I have learned about the special types of Islamic and conventional documentary credit. The topic focuses on transferable documentary credit, back to back documentary credit, revolving documentary credit, red clause credit, green clause credit and counter credit.

In this topic I have learned about many types of Islamic and conventional trade financing facilities. The topic includes letter of credit and bill discounting facilities, bankers’ acceptance, trust receipts, foreign currency loan, overdraft, shipping guarantee, ECR. I also learned on the islamic contracts in trade finance such as murabahah, mudharabah, musyarakah, wakalah, bai al-dayn, kafalah and naqad.

In this topic I have learned about the export credit refinancing that includes the pre-shipment ECR and post-shipment ECR. I also learned on the differences between conventional and Islamic-based ECR where the aim of ECR-i is to promote the export of manufactured, agricultural products and primary commodities that are permissible in Shariah principle.

In this topic I have learned about the Islamic and conventional foreign exchange which means the exchange of currency of a country or another. It involves importer and exporter. I also been introduced with the spot, forward, option, money market hedging and the calculation of swap, forward and cross rate. There is a Shariah resolution on foreign currency.

This chapter deals with the introduction to Islamic and conventional trade which discusses trade theory. Based on this note, I can understand that trade theory is divided into two, namely theory of absolute advantage and the gains, and theory of comparative advantage. Examples for absolute advantage are produce only goods where you are most efficient, trade for those where you are not efficient, and for comparative advantage you are should trade even if the country is more efficient in the production than its trading partner. In addition, I can also understand and explain the application of the new trade theory, first-mover advantage, factor endowment, and determinants of national competitive advantage. As an example of endowment, I can see that it has two basic factors and advanced factor. Under the basic factors are natural resources, climate, location, and demographics. As for the advanced factor, there is communications, skilled labor, research, and technology. Factor endowment are more likely to lead to competitive advantage.

This chapter is titled trade finance which describes risk in international trade, commercial contract, and payment method in international trade. In International trade transactions there are also many risks. Among them, force major, seller risk, buyer risk, commercial risk, foreign exchange risk and country risk. To mitigate this risk we need to use commercial contract, payment method and bank guarantee. In addition, the Bank will apply international codes of practice, maintain control over the goods on behalf of the exporter, provide financial support, and conduct delivery channel for payment methods. This way is to help in dealing with the risk. Principle commercial of contract is agreement, obligatory, and penalty. Next, there are 3 methods of payment in international trade that can be used namely, clean payment, documentary credit, and documentary collection. As an example of clean payment, it is divided into two, namely open account and advance account. Clean payment is a method based on trust between seller and buyer.

This chapter is entitled documentary collection URC 522. This note is primarily focused on collection cycle of documentary collection. It explains the financial commercial and official documents, collection under document against payment (D / P), collection under document against acceptance (D / A), collection instructions Uniform Rules for Collection (URC No 522)), advantages and disadvantages of documentary collection for importer, exporter, and bank.

This chapter is entitled Incoterm 2010. I understand incoterm is an acronym for International Commercial Terms published in 1936 by the International Chamber of Commerce. In brief, incoterm does not perform service contracts, determine transfer of title and breach of contract or remedies, do not protect parties from their own risk of loss, and do not cover goods before or after delivery. The things that will be covered by incoterm are warehousing, packing and loading, inland freight, terminal charges, freight forwarder fees, Ocean / air freight, duty, taxes, & customs clearance, delivery, and security clearances (new to 2010. Incoterms has 2 group rules namely rules for Any Transport, such as EXW, FCA, CPT, CIP, DAT, DAP, DDP. Next, rules for sea and inland waterway transport, such as FAS, FOB, CFR, CIF

This chapter is titled Incoterms 2020 - 7 key changes & updates. With this note, I can differentiate incoterm 2010 with incoterm 2020. Among the differences is, DAT Incoterm changed to DPU, insurance cover differs between CIF and CIP, listing of costs, security requirements, own transport, FCA and bills of lading, and presentation and design. For example, the Incoterms 2020 rules have much more extensive explanatory notes, better diagrams, different structure users and a reordering of rules to make delivery and risk more obvious. But there are also rules that have not changed and remain at the back of the rule book namely maritime rules. This is because it related as they still might be used for bulk commodities.

This chapter is entitled special types of Islamic and conventional documentary credit. Based on this note, I can learn about the meaning, flow, used, most famous credit, their practice and the benefits of transferable documentary, credit Back to Back, documentary credit, revolving documentary credit, red clause credit, green clause credit, and counter credit.

This chapter is titled Islamic and conventional trade financing facilities. This note describes the various falcilities available in trade financing. Among the topics covered are usury, letter of credit - i, bill discounting, bank guarantee, bank guarantee i, banker acceptance, Islamic accepted bills, trust receipt, foreign currency financing, overdraft, cash line-i, shipping guarantee, and shipping guarantee-i. I also have knowledge of Islamic contract in Trade Finance. Among the contracts used are mudharabah, musyarakah, wakalah, bai al-dayn, kafalah, and naqad. Kafalah is divided into two namely al-kafalah bank guarantee and al-kafalah shipping guarantee.

This chapter is called export credit refinancing which provides overview of ECR.pre-shipment ECR, post-shipment ECR, and conventional vs Islamic-based ECR. Pre-shipment is available to direct and indirect exporter. The Shariah principles used for pre-shipment are murabahah and bay al-dayn. For post-shipment, however, it uses the shariah principal of bay al dayn only.

This chapter is titled Islamic and Conventional Foreign Exchange. What I can learn from this topic is the meaning of foreign exchange, foreign exchange market, and foreign exchange transaction. In addition, the type of exchange rate quotation is divided into two direct quotes and indirect quotes. Next, about spot, forward, option and money market hedging and swap rate. Next, type of dates in foreign exchange dealings. These include cock dates, forward value dates, short dates, spot value date, values date, and contract date. Next, charateristic of forward exchange contract ie for purchase or sale specified quantity of a specified currency, price is agreed today, performance at specified future date, both parties are obliged to perform, party that buys specified currency is said to have a long position, party that sells the specified currency is said to have a short position, and standard period of times such as 1 month, 3 months and 6 months forward. I have also been taught how to calculate swap, forward, and crosss step by step as pointed out in this note.

This covid-19 pandemic has a huge impact on the Malaysian economy especially in the international trade of import and export activities. Due to the covid-19, Malaysia is in an era of closed economy, which means less import and export activities. This is because other countries are also affected by covid-19 and are less involved in import and export activities such as our country. This will cause the country's economy to collapse

Next, in Chapter 2 it explained the credit risk that may occur in international trade and the commercial contract. The payment methods in international trade also been explained clearly. I realized that each method has its pros and cons. 

Then, in Chapter 3 I learned that the documentary collection should be made in sequences to assure that business run smoothly. The rules and conditions must be following strictly to avoid termination. 

In Chapter 4, International Commercial Terms or INCOTERM have been discussed. INCOTERM has faced many improvements years by year. Those short forms must be understood clearly to avoid confusion as the term is quite similar.  

Uniform Customs and Practice for Documentary Credit has been taught in Chapter 5 where the basic rules and conditions have been discussed. It is a set of rules on the issuance and use of letters of credit.  It has been used internationally in trade finance. 

In Chapter 6 the topic is Islamic and Conventional Documentary Credit. We can justify the differences between the documents. The process when using it and how the document revoked also discussed in this chapter. 

Besides that, Special Types of Islamic and Conventional Documentary Credit in Chapter 7. The type of letter of credit has been divided into topics in the chapter. For example, Transferable Documentary Credit, Back to Back Documentary Credit, Revolving Documentary Credit, Red Clause Credit, Green Clause Credit and Counter Credit. This chapter also helps me to complete the assignment of the case study. 

In Chapter 8, the facilities of Islamic and Conventional Trade Financing also been learned. For a contract in conventional, there must be the Islamic one to allow the Muslims to practice in trading. This to make sure Muslims can trade internationally without disobeys Allah during business transactions. 

Next, in Chapter 9 is Export Credit Refinancing (ECR). It also has two types which are conventional and Islamic-based which known as IECR. The objective of IECR is to promote the export of manufactured products, agricultural products, and primary commodities with Shariah-compliance. This chapter focus on the concept of IECR. 

Lastly, in Chapter 10 which is Islamic and Conventional Foreign Exchange. Foreign exchange is important for importer and exporter as the currency used is a difference. In Islam, transactions in foreign currency are necessary transactions for an Islamic banking institution. 

 

In Chapter 2, I learn bout the risks faced by the international trade. In the same time, I know how bank dealing with the risks and also learn about commercial contract.

 

In Chapter 3, I learn about the overview of documentary collections. Next, I get to know the financial, commercials and official documents. I also get to know how the process of collection under document against payment and document against acceptance.

 

In Chapter 4, I learn about Incoterms which is stand for International Commercial Terms. I cam simplify some terms of an international sales agreement. I also get to know how the incoterms take the place of a sales agreement of  terms and conditions and how the incoterms supply all terms for an international trade. There are 7 rules for any mode of transport while 4 rules for sea and inland waterway transport.

 

In Chapter 5 and 6, I learn about the main rules of UCP 600 and get to know the important and critical opinions given under UCP 600. 

 

In Chapter 7, I get to know the transferable document credit, back to back documentary credit and revolving documentary credit. In the same time, I learn about red clause credit, green clause credit and counter credit. 

 

In Chapter 8, I learn about the facilities in Islamic and conventional trade financing. I understand about the letter of credit and bill discounting facilities, banker acceptance, trust receipts, foreign currency loan, overdraft, packing credit, export credit refinancing and shipping guarantee. In the same time, I get to learn about murabahah as an alternative in interest financing of trade, the complete system of  Islamic modes of  trade finance, risks nd insurance.

 

In Chapter 9, I learn about the export credit financing. I can differentiate between conventional and Islamic ECR. Then, I also understand abot the pre shipment ECR and post shipment ECR.

 

In Chapter 10, I can identify the differnces between Islamic and conventional foreign exchange. I also get to know the exchange rate quotation. In the same time, I learn about the spot, forward, option and money market hedging. I also learn how to calculate swap rate, forward rate and cross rate.

Chapter 1: The worlds of International trade, it’s explained about sales of goods involving foreign countries. Free trade defines that, intervention of government creates limit of decision to the parties in international trades.  

Chapter 2: Potential of risk that might be face in international trade such as credit risk, commercial risk, foreign exchange risk, buyer & seller risk and country risk. In addition, there are three types of payments facilities in international trade which is clean payments, documentary collection and documentary credits. 

Chapter 3: The exposure of documents collections in international trade together with Financial, Commercial and Official Documents, Collection under Document Against Payment (D/P), Collection under ,Document Against Acceptance (D/A) and lastly Collection Instructions.

Chapter 4: Functions of incoterms in international trade, the terms that must be obey by user in international trade. For instance it’s specifies who is responsible for paying for and managing the shipment, insurance, documentation, customs clearance, and other logistical activities. The duties of buyer and seller must be transparent with what stated in Incoterms. 

Chapter 5: The explanations of Uniform Customs & Practice for Documentary Credits (UCP 600) by International Chamber of Commerce (ICC) that governs international documentary credit practice.

Chapter 7: Through the case study assign to us it help me to understands the flow of back to back letter of credit and how it’s differ from letter of credits. 

Chapter 8: The types of Islamic and conventional trade financing facilities which is bill discounting, bankers’ acceptance, trust receipts, foreign currency loan, overdraft, packing credit, shipping guarantee, export credit refinancing. The differences between Islamic is the types of contract apply such as Murabahah for alternative interest, Mudharabah and many mores that surely comply with Shariah terms and needs.

Chapter 9: The applications of Islamic Export Credit Refinancing (ECRi). Its provide helps for the exporter for short term financing which follows Shariah requirements.

Chapter 10: It helps me to calculate exchange rate quotations which include two ways which is indirect and direct. The proper examples shows by lecturer gave us an idea how the currencies quotations works even though through virtual class it’s still really helpful. 

Chapter 1: I have learnt about the definition, theory and concept of international trade. Some country that conduct international trade will have a benefit. I also learned the pattern of international trade in the world economy. There is some element that guide from Shariah rules. As I know, China is the largest country that provide a big trade since China produce various of goods. It will impact other country since Pandemic Covid-19 originally from China. 

Chapter 2: I have learnt on the risk that will be faced in the international trade either the importer and exporter. Next, the principles of commercial contract that comply between importer and exporter for the sale of goods, real property or services. There are 4 method to make a payment which are open account, payment in advance, documentary collection and documentary credit. Usually, documentary collection and documentary credit will be used. 

Chapter 3: I have learnt more details about documentary collection. For this method of payment, it will be divided into 2 categories which are document against payment and document against acceptance. The uniform rule is URC 522, 1955, International Chamber of Commerce. It explains based on article that related to URC 522, 1955.  In Islamic trade, there are 2 types of documentary bills which are inward and outward bills.

Chapter 4: I have learnt about INCOTERMS 2020. Incoterms is International Commercial Terms that defined commercial terms published by the International Chamber of Commerce (ICC) related to international commercial law. There are 7 INCOTERMS for any mode of transport. which are EXW, FCA, CPT, CIP, DAT, DDP, DAP while 4 INCOTERMS for sea and inland waterway transport which are FAS, FOB, CFR, and CIF.

Chapter 5: I have leant about Uniforms and Practice for documentary credit (UCP). UCP is a set of rules agreed by the International Chamber of Commerce (ICC) to issue letter of credit. The UCP is utilized by financial institutions and commercial parties and accepted universally by all the countries.  There are 49 articles related to UCP 500 that emphasize practical working aid to bankers, lawyers, exporters and importers. 

Chapter 6: I have learnt about Islamic and conventional documentary credit. A documentary credit is a written undertaking given by a bank (issuing bank) to the seller on the instruction of the buyer. The forms of documentary credit are revocable (letter of credit can modify) and irrevocable (letter of credit cannot be modified). Other than that, the common forms of payment are negotiation, sight, deferred, and acceptance. 

Chapter 7: I have learnt about the types of documentary credit. There are 3 popular of documentary credit (letter of credit) which are transferable, back to back and revolving. The difference between transferable and back to back is the ownership of the goods that transfer the middleman. Other than that, there are 3 clause credit which are red, green and counter. The function of clause is facilitating international trade. 

Chapter 8: I have learnt the Islamic and conventional trade financing facilities. In conventional, the facilities that provide are letter of credit, bankers’ acceptance, trust receipts, shipping guarantee and others. While in Islamic, Bai al Dayn, Islamic accepted bill, Mudarabah, Musyarakah, Murabahah and Kafalah. The new terms to me is Naqad which is an unsecured term financing facility that provides cash to customer to cater for personal consumption.

Chapter 9: I have learnt about export credit refinancing -i. The objective of ECR-i is to promote the export of manufactured products, agricultural products and primary commodities according Shairah principles. ECR is divided into two which are pre-shipment and post-shipment. Pre-shipment is financing of the purchasing of domestic inputs while post-shipment is to funding the sale of qualifying products on sight-term for a period of shipping.

Chapter 10: I have learnt about Islamic and conventional foreign exchange. There are 4 types of transactions foreign exchange which are spot, forward, option and money market hedging. I also learn on how to calculate the foreign exchange by using currency notes, TT and OD. Some country is decreasing their currency since the Pandemic Covid-19 affected all the world. For instance, Thailand (baht) and Australian (Australian dollar).

 

This chapter is about uniform customs and practice for documentary credit (UCP 600). It is a set of rules agreed by the International Chamber of Commerce (ICC), to issue Letters of Credit. It is also utilized by financial institutions such as, bankers and commercial parties and accepted universally by all the countries. I also learned about common discrepancies in Letter of Credit. Discrepancy happen when there is a difference between two things that should be alike. For instance, inconsistency in document, incorrect data, late shipment and late presentation of document, carrier is not defined on the Bill of Lading, incorrect goods description, incorrect/absence of endorsement and partial shipment or transshipment affect the L/C term.

In this chapter gives me knowledge on Islamic and conventional documentary credit. The Letter of Credit (LC) or the Documentary Credit (DC) is a very ancient payment device. Its present form and the rules that govern it evolved from the international sale of goods. In recent decades the scope of LCs has changed from one that guarantees payment for a performance to one that guarantees payment for nonperformance.

Chapter 7
This chapter taught me on special types of Islamic and conventional documentary credit such as transferable documentary credit, back to back documentary credit, revolving documentary credit, red clause credit, green clause credit and counter credit.
Chapter 8
In chapter eight, I learned about Islamic and conventional trade financing facilities such as letter of credit and bill discounting facilities, bankers’ acceptance, trust receipts, foreign currency loan, overdraft, packing credit, shipping guarantee and export credit refinancing. There are also several islamic contract in trade financing which includes,murabahah, mudharabah, musyarakah, wakalah, bay al-dayn, kafalah and naqad.
Chapter 9
Through this chapter, I learned about export credit refinancing. It provides an alternative short term pre- and post-shipment financing to direct/indirect exporters to promote export of manufactured products, agriculture products and primary commodities that are 'Halal', via the provision of Shariah compliant financing facilities
Chapter 10
This chapter is regarding Islamic and conventional foreign exchange where it is about exchange of currency between two countries or other third countries in foreign exchange market. This process is called foreign exchange transaction. Exchange of currency is based on its exchange rate quotation either by direct or indirect quoting. I also understand more about spot, forward, option and money hedging.

Chapter 1: Under this topic, there are many theories regarding international trade. International trade involved two parties from different countries that agreed to export and import the products and services. When there is no attempt of government in the trade, it is called free trade. No attempt of government means that there are no tariffs, taxes, or duties on imports or quotas on export. From this chapter, I can know how international trade works, the reason why beneficial for a country to engage in international trade, and the pattern of international trade.

Chapter 2: In trade, there will involve risk whether it is the risk that has to face by the importer (buyer) or exporter (seller). For example, credit risk. Credit risk is the failure of the buyer to make payments or trade transactions will result in the seller having to bear the loss. Other than that, there are several payment methods for the transactions of the trade such as a clean payment that involved open account and advance payment. Other methods are documentary collection and also documentary credit. These are three payment methods that can be used in trade transactions. 

Chapter 3: In this chapter, it is about the meaning of documentary collection and the process of how it works. In these transactions it involved importer, exporter, and banks that act as issuing banks on behalf of importer and advising the bank on behalf of the exporter. Documentary bills for collection-i are one of the methods of trade transactions that accepted and have been practiced by the Islamic bank. 

Chapter 4: Incoterm aimed at facilitating the relationship between exporter and importer to ensure that the parties are responsible for the goods being exported or imported. There are 11 rules of transport under Incoterms such as EXW, FCA, CPT, CIP, DAT, DAP, DDP, FAS, FOB, CFR, and CIF. All these rules are divided into two groups which are for any mode of transport and for sea and inland waterway transport. 

Chapter 5: It is about the Uniform Customs and Practices for documentary credit. UCP 600 is a set of rules that is applied to any documentary credit. 

Chapter 6: For this chapter, I got to know the difference between conventional documentary credit and Islamic documentary credit. In other words, it is called a letter of credit. The process of documentary credit between importer and exporter with the involvement of banks as intermediaries on behalf of importer and exporter. 

Chapter 7: There are several types of documentary credit such as transferable DC, back to back DC, revolving DC, red clause credit, green clause credit, and counter credit. I got to know every meaning of the types of documentary credit under this topic.

Chapter 8: The types of Islamic and conventional trade financing facilities that can be used in trade transactions. There are several types of trade financing facilities under this topic. Under Islamic trade financing facilities, it involved Islamic contracts like al-murabahah, al-mudharabah, al-musharakah, and other Islamic contracts. 

Chapter 9: From this topic, I learned about the meaning, objective, and types of the facility of export credit refinancing-i (ECR-i) ECR-i is divided by two which is ECR-i Pre-shipment and ECR-i Post-shipment. Both this ECR-i is applicable under Shariah principles in Islamic contracts. I can be differentiating between the pre-shipment and post-shipment. 

Chapter 10: I learned the definition of foreign exchange, foreign exchange market, and foreign exchange transactions. Other than that, the exchange rate quotation that involved in the trade like the currency that been used in different countries. I also can know the calculation of swap rate, forward rate, and cross rate. 

 

There are 5 types of payment methods available in international trade. These payment types are cash-in-advance, open account, documentary collections, documentary credits which is letters of credit and bank payment. Therefore, cash in advance is a payment method in international trade in which an order is not processed until full payment is received by the supplier in advance. Sometimes cash in advance is called cash with order.Then, Open account means that buyers pay the cost of the goods after goods have been shipped by the supplier. Open account posses highest risk to the exporter, lowest risk to the importer. Besides, for Documentary Collections, its an International trade procedure in which a bank in the importer’s country acts on behalf of an exporter for collecting and remitting payment for a shipment. The exporter presents the shipping and collection documents to his or her bank (in own country) which sends them to its correspondent bank in the importer’s country.The foreign bank that is called the presenting bank, hands over shipping and title documents (required for taking delivery of the shipment) to the importer in exchange for cash payment which in case of ‘documents against payment‘ instructions or a firm commitment to pay on a fixed date which in case of documents against acceptance instructions. A documentary collection (D/C) is a transaction whereby the exporter entrusts the collection of a payment to the remitting bank (exporter’s bank), which sends documents to a collecting bank (importer’s bank), along with instructions for payment. Therefore , for Documentary credits, that also known as letters of credit, are one of the payment methods in international trade. Letter of credit defined by International Chamber of Commerce publication of UCP 600 as “any arrangement, however named or described, that is irrevocable and thereby constitutes a definite undertaking of the issuing bank to honour a complying presentation.” Last but not least, the Bank Payment Obligation. Bank payment obligation is a new payment method in international trade. Bank payment obligation (BPO) is an irrevocable undertaking given by an Obligor Bank (typically buyer’s bank) to a Recipient Bank (usually seller’s bank) to pay a specified amount on an agreed date under the condition of successful electronic matching of data according to an industry-wide set of rules adopted by ICC. 

Next, I have learned about Incoterm Rules. The Incoterms rules are a set of standard packages of terms and conditions relating to the sale of physical goods that need to be transported. First published by the ICC in 1936, the Incoterms rules are revised from time to time. The latest revision, Incoterms 2010 came into force on 1 January 2011, replacing the previous version Incoterms 2000. Besides, I also learned the new incoterms 2020 that have new 7 changes rules. 

We also have learned about transferable documentary credit, that defined in UCP 600 article 38, is a credit that specifically states it is transferable, thereby allowing for it to be made available in whole or in part to one or more other beneficiaries (each to be known as a second beneficiary), at the request of the beneficiary (who will become known as the first beneficiary). A transferable documentary credit may only be transferred by a bank that is nominated to honour or negotiate or, if it is available with any bank, by a bank that is specifically authorised in that credit to effect a transfer. If a bank agrees to transfer it will become known as the transferring bank. An issuing bank may also transfer a transferable documentary credit. Next, about back to back letters of credit that consist of two letters of credit used together to finance a transaction. A back-to-back letter of credit is usually used in a transaction involving an intermediary between the buyer and seller, such as a broker, or when a seller must purchase the goods it will sell from a supplier as part of the sale to his buyer.

Therefore I learned about export credit refinancing. Its a scheme whereby Exim Bank provide short term financing to direct and indirect exporter, via commercial banks prior to o upon shipment of the products. Exim Banks will refinances the commercial banks which had extended short term financing to eligible direct or indirect exporters at the prevailing ECR-I rate determined by Exim Bank. 

Lastly, its about Islamic and Conventional Foreign Exchange. International business almost always gives rise to foreign exchange risk. Therefore, a derivative contracts assist conventional companies to manage foreign exchange risk, but are not considered Shariah compliant. Thus, with a Shariah compliant foreign exchange forward contract has now been developed. There is standard documentation which should make the contract easy to use. Foreign Exchange (forex or FX) is a global market for exchanging national currencies with one another. The currency markets are also further divided into spot markets which are for two-day settlements and the forward, swap and options markets. Spot & forward rates are settlement prices of spot & forward contracts while cross rates are the exchange rate between two unofficial currencies. Next, I have learned about Closing Forward Exchange Contract and how to Calculating Swap Rate, Forward Rate and Cross Rate.

Assalamualaikum Dr Noriza and all my lovely friends. I would make summary about all chapter that have been learn through this subject which is chapter one until ten. Lots of new knowledge that have been gain through learn this subject that can be used in future. 

Chapter 1 : in this chapter we already learn about the International trade theory where we already look forward the benefit that country received through the trade transaction. In this chapter we have go thru the trade theory where it has some benefit that country received which is it get specialize in the manufacture and export of product that can be produced most efficiently in country.  We also have learn others theory such as absolute advantage (capability the country to produce more product with same amount of input), comparative advantage ( trade even more efficient in the production than trading partner)

Chapter 2 : in this chapter we already learn about the risks in international trade. Where risk can divide into several type of risk such as buyers’ risk, seller’s risk, commercial risk, foreign exchange risk, force major and country risk. The risk mitigation can be done through 3 way which is commercial contract, payment methods and bank guarantee. We have look forward the credit risk where in this risk it involves bank and customer perspective. It also has explained in this chapter about the principles of commercial contract that involve 3 principles which is agreement, obligator and penalty. In international trade it has payment method that can be used which is clean payment, documentary credit and documentary collection. 

Chapter 3 : in this chapter we already learn about documentary collection. It related with financial, commercial and official documents. It has 2 type of collection category which is under document against payment and under document against acceptance. It has 26 article uniform rules of collection that need to be follow in documentary collection. 

Chapter 4 : in this chapter we have learn about incoterms 2010. This incoterm is involve term of international sales agreement which supply all terms related to international sales. The contract that involve just the contract of sale rather than that would not be apply it. It has been change for several time before this regarding the needs at that time.

Chapter 5 and 6 :  I have learn about Uniform Customs and practice for documentary credits (UCP 600) by international chamber of commerce (ICC).  It governs international documentary credit practice. It also utilized by the financial institutions such as commercial parties, bankers and it would be accepted by all country. 

Chapter 7 : it related to the special types of islamic and conventional documentary credit. We already learn on how the documentary of credit work in practice and why we need to standby letter of credit in export and import transaction sales payment. Besides, we also learn about transferable letter of credit in which the first beneficiary may transfer part or whole of the letter of credit to second beneficiary. We also has back to back letter of credit which one irrevocable letter of credit serves as the collateral for another,the advising bank of the first letter of credit becomes the issuing bank of the second letter of credit. Also other 2 letter of credit which is green house and red clause. 

Chapter 8 : we also have been learn about types of Islamic and conventional trade financing facilities. It consist bill discounting, bankers acceptance, trust receipts, foreign currency loan, overdraft, shipping guarantee and others. the conventional and Islamic contract are different due to the shariah compliance and needs of the contract. 

Chapter 9 : in this chapter we have learn about export credit refinancing. It has 2 types of shipment which is pre shipment and post shipment. Pre shipment is a facility advanced to facilitate the production of eligible goods for export prior to shipment and promote backward linkages in industrial development. However, post shipment is the facility advance made to the exporters to finance the export of eligible goods after shipments. In Islamic export credit refinancing facilities the product must be halal and the product must not listed under first schedule of custom duties order.

Chapter 10 : this chapter explain about Islamic and conventional foreign exchange. It related with the importer and exporter foreign exchange. The exchange rate quotation for every country would be different and change time to time. It has 2 type of quotation which is direct and indirect quotes. Rather than that it also has spot, forward, option and money market hedging. The dates of dealings would be different because has several type such as knock, forward value, spot value and contract 

In this chapter, I have learned why should a country involve in international trade in order to gain benefits and how’s the pattern of international trade observed in the world economy. There’s also information regarding the regulation in international trade and International Trade in Islamic perspective

Through chapter 2, I have been explained roughly the method of international trade settlement that involving these four elements which are open account, payment in advance, documentary collection and documentary credit. 

Basically, in chapter 3 I have been exposed to the use of documentary collection based on Islamic and conventional. It stated the function of these documents. There is also an explanation about the shipping document that is used, the parties involved, the method on how a document is collected, the instruction and rules of a collection which need to be followed and the advantage and disadvantages of documentary collection.

For chapter 4, I learned about the incoterms which is a short form for International Commercial Terms. It has eleven terms which represent Rules for sea and inland waterway transport and any mode of transportation. For sea and inland waterway transport consists of Free Alongside Ship (FAS), Free on Board (FOB), Cost and Freight (CFR) and Cost Insurance and Freight (CIF). While for any mode of transport consists of Ex work (EXW), Free carrier (FCA), Carriage paid to (CPT), Carriage and insurance paid to (CIP), Deliver at Terminal (DAT), Deliver at Place (DAP) and Deliver Duty Paid (DDP). It occurs base on these four different situations which is a departure, carriage-paid, carriage-unpaid and arrival.

This chapter explain about the Interpretation and Application of UCP 500. UCP is a short form for Uniform Customs and Practice for Documentary Credit which explain about the provisions and coverage UCP 500, general practical, contract of sale, parties involve, conditional or absolute payment, time for issuance of credit, form of documentary credit and some basic rules of the document.

Explain about the Islamic and conventional Documentary Credit. Basically, it portrays about the documentary credit either in the form of revocable, irrevocable and confirmed credit. Besides, there is also stated there for the method of payment in the form of sight & deferred, acceptance and negotiation. It also taught on how to do Opening and Advising, Amendment, Presentation/Negotiation and Assignment of Proceeds.

On chapter 7, we are learning about the special types of Islamic and Conventional documentary credit which actually related with the chapter 5 that consists several type of documentary credits such as Transferable Documentary Credit, Back-To-Back Documentary Credit, Revolving Documentary Credit, Red Clause Credit, Green Clause Credit and Counter Credit.

This chapter taught about the Islamic and Conventional Trade Financing Facilities which is provided in order to get the business transaction smooth. The function of these products are to facilitate the management of the trade between parties involve. The facilities such as Letter of Credit and Bill Discounting Facilities, Banker Acceptance, Trust Receipts, Foreign Currency Loan, Overdraft, Packing Credit, Shipping Guarantee, export Credit Refinancing (ECR and Murabaha As an Alternative to Interest Financing of Trade. There is also included the facilities in terms of Islamic financings such as Al-Mudharabah, Al-Musyarakah, Bai’al Dain, Al-Murabahah, Al-Kafalah, Naqad and Islamic Accepted Bill. Besides, it has provided Risk and Insurance in order to protext the goods and the importance of both sides.

Basically chapter 9 covers the ECR which refers to the Export Credit Refinancing. In this chapter, we have been exposed about the Pre-shipment of ECR and the Post-shipment of ECR. Besides it also has the use of ECR based on the Islamic and conventional which is totally differ based on their practice.

Chapter 10 discussing the Islamic and Conventional Foreign Exchange which basically the exchange of currency of one country or the currency of another. It has stated the Exchange Rate Quotation based on the currency and the type of foreign exchange contract such as Spot, Forward, Option and   Money for Market Hedging. This chapter also taught us on how to calculate swap, forward and cross rate for foreign exchange.

Assalammualaikum to our beloved lecturer Dr Noriza. My name is Nu Amira Bt Sarwani and matric number 263910. A big thanks to Dr for teaching and making us understand this subject which is Islamic International Trade and finance.

 

So, for the chapter one it started from the introduction to islamic and conventional trade. It is state it how important trade for country and how beneficial this trade in a country. Then, also have all the the theories of trading. 

 

Then go to the chapter 2. In this chapter, it state about the certain risk and issue in international trade. So what I learned and got from this chapter is there are 6 risk which is buyer risk , seller risk, foreign exchange risk, commercial risk, country risk and the last one force major. In this chapter also teach me about method  of international trade settlement. 

 

Next, in this chapter 3, I learned about documentary collection.A documentary collection is a process by which an exporter's bank collects funds from the importer's bank in exchange for documents detailing shipped merchandise. A documentary collection is a trade transaction in which exporters allow their bank to act as a collection agent for payment of shipped goods to the buyer. Then it also state about method of payment.

 

In chapter 4, I learned about functions of incoterms in international trade. Incoterms is International Commercial Terms.  a widely-used terms of sale,  internationally recognized rules which define the responsibilities of sellers and buyers. Incoterms specifies who is responsible for paying for and managing the shipment, insurance, documentation, customs clearance, and other logistical activities. In incoterms 2010 have seven rules for any mode of transport.One of the example is rules EXW.

 

In this chapter 7, I learned about the special types of islamic and conventional Documentary Credit. In this chapter have the topic of the transferable documentary credit, back to back documentary credit , red clause credit , green clause credit and the last one counter credit . 

 

In this chapter 8, it about islamic and conventional financing facilities.  islamic and conventional financing facilities are Letter of Credit and Bill discounting Facilities, Banker acceptance, trust receipts, foreign currency loan , overdraft, packing credit, shipping guarantee and export credit refinancing . Then in this chapter also state about murabahah as an alternative in interest financing of trade.

 

In this chapter 9, its explained about the overview of ECR. The ECR is stand for export credit refinancing. Then it also state about the Pre- shipment , post shipment of ECR. I also learned the differences between islamic and conventional of ECR.

 

For the last chapter, it explained about the islamic and conventional Foreign Exchanged( Forex )  is a global market for exchanging national currencies with one another. I learned about the types of foreign exchanged and also learned how to calculate the foreign exchanged by using currency notes, TT and also OD.

Topic 1 is discussing about the International trade theory that focusing on advantages of engage in international trade. Through our learning, the advantages of trading allows a country to endure in manufacturing and export of products that can be produced systematically in that country. Trading involves more than 1 country and the intermediaries involves an exporter, importer and banks.

Topic 2 is about the major international risks for businesses include foreign exchange and country risks. Foreign exchange risk is the risk of currency value fluctuations, usually related to an appreciation of the domestic currency relative to a foreign currency.  Political and country risk happens when countries change policies that might negatively affect a business, such as trade barriers. Also, I learned about Credit Risk Analysis and Commercial Contract in International Trade.

underlines the laws and regulations relating to Documentary Collection, Financial, Commercial and Official Records, Document Collection Against Payment (D / P), Document Collection Against Acceptance (D / A), Collection Instructions and Uniform Collection Rules (URC No 522). Besides that, I also learned about the advantages and disadvantages of importers, exporters, and banks involved in the documentary collection

I have learned about Incoterm 2010. Incoterm is a short form for “International Commercial Terms”. Incoterm simplify some terms of an international sales agreement but however, it does not take the place of a sales agreement or terms and conditions and supply all terms for an international sale. It covers several terms such as Warehousing, Packing and loading, Inland freight, Terminal charges, Freight forwarder’s fees, Ocean/air freight, Duty, taxes, & customs clearance, Delivery and Security Clearances (new to 2010)

I learnt about special types of Islamic and conventional documentary credit. This chapter covers the topics transferable documentary credit, back-to-back documentary credit, revolving documentary credit, red clause credit, green clause credit and counter credit.

I have learned about different financing facilities, such as Letter of Credit, Bill Discounting Facilities, Bankers Acceptance, Trust Receipts, Foreign Currency Loan, Overdraft, Packing Credit, Shipping Guarantee and Export Credit Refinancing. Besides that, I have learned about Murabahah as an Alternative in Interest Financing of Trade and also the complete system of Islamic modes of trade finance.

This chapter will focus more on export credit refinancing that available in international trade which will be focus on overview, conceptual, definition and also conceptual. In this chapter also have two types which are pre-shipment ECR and also post-shipment of ECR. In pre-shipment ECR contain two contract which are Al-Murabahah and Bai Ad-Dayn while in post-shipment ECR only contain one contract which is Bai Ad-Day. This chapter also discuss on method on applying ECR-i. In this chapter also we learn on different between Islamic and conventional-based ECR.Topic 10 : On this topic, i have learned about the Islamic and Conventional Foreign Exchange. I gained knowledge on definition of Exchange Rate Quotation, Spot, Forward, Option and Money Market Hedging, Closing Forward Exchange Contract, Calculating Swap Rate, Forward Rate and Cross Rate and lastly Current Issues.

What I have learnt in chapter 10 about foreign exchange in term of Islamic and conventional. In exchange rate quotation helps to calculate the rate in country before trading process. It also discuss about spot, forward, option and money hedging in term of the exchange rate. I also understand and know how to calculate the swap rate, forward rate and cross rate

 Firstly, in topic 1, I’ve learned about the general overview about Islamic and Conventional Trade where it includes the theory of international trade,  International trade and the economy, the regulation in international trade and Trade in Islamic perspective. Meanwhile in topic 2, I’ve learned about the method of International Trade Settlement such as Open Account / Consignment, Payment in Advance, Documentary Collection and Documentary Credit. Moving on to the topic 3, here’s we know about Islamic and Conventional  Documentary Collections. In simple words, it’s a connection between the importer and exporter when they are performing trade together. Documentary Collection includes their Financial, Commercial and Official Documents. There are also few rules or it is called Uniform Rules for Collection (URC No 522) that have been mention regarding this document and includes their flow and condition of trading. Also, here we know about the two types of Documentary Collection which are Collection under Document Against Payment (D/P) and Collection under Document Against Acceptance (D/A). In the last part, we’ve learned about the advantage and disadvantage of Documentary Collection towards the Importer, Exporter and Bank. 

Furthermore, in topic 4, I’ve learned about the INCOTERMS which are stands for International Commercial Terms. Here, I’ve about the purpose of INCOTERMS, terms covered by INCOTERMS, their rules which are DAT and DAP, the 2 groups of Incoterms rules which are Rules for Any Mode of Transport (EXW, FCA, CPT, CIP, DAT, DAP, DDP) and Rules for Sea and Inland Waterway Transport (FAS, FOB, CFR, CIF). Next, in topic 5, we’re able to learn about Uniform Customs and  Practice for Documentary Credit. Here we get to know about the objective and history, the Provisions and Coverage which is UCP 500 and some General Practical Consideration. In the part of the Contract of Sale, it includes the relationship of Parties, Conditional or absolute Payment, Time for Issuance of Credit and some basic principles. Furthermore, we also learned about the Form of Documentary Credit, Basic Rules on Documents Required, Common Discrepancies and the precaution against fraud. Continue with topic 6,  we’re able to learn about the  Islamic and Conventional  Documentary Credit. Firstly, we’ve learned about the Forms of Documentary Credit which are divided into revocable, irrevocable and confirmed credit. And the Forms of Payment which includes Sight & Deferred, Acceptance and Negotiation. Continue with the application For Documentary Credit, Opening and Advising, Amendment, Presentation/Negotiation and Assignment of Proceeds, Discrepancies and Resolving Discrepancies and lastly, liabilities and responsibilities of Islamic and Conventional  Documentary Credit.

For the next topic, which is in topic 7, I’ve learned about Special Types of Islamic and   Conventional Documentary Credit such as transferable Documentary Credit, Back-To-Back Documentary Credit, Revolving Documentary Credit, Red Clause Credit, Green Clause Credit and also Counter Credit. Continue with topic 8, we’re able to learn about the Islamic and Conventional Trade Financing Facilities. It includes Letter of Credit and Bill Discounting Facilities, Bankers’ Acceptance, Trust Receipts, Foreign Currency Loans, Overdraft, Packing Credit, Shipping Guarantee and Export Credit Refinancing(ECR). We also able to learn about Murabaha as an alternative to Interest Financing of Trade, The Complete System of Islamic Modes of Trade Finance and the Islamic Financing such as Al-Mudharabah, Al-Musyarakah, Bai’al Dain, Al-Murabahah, Al-Kafalah, Naqad and Islamic Accepted Bill. Then, in topic 9, they explain all about Export Credit Refinancing (ECR). First, the meaning of ECR, and then the concept, objective and type  of Pre-shipment ECR and Post-shipment ECR. Lastly, the contract includes, the flow and followed by the comparison between Conventional and Islamic-based ECR. Last but not least, in topic 10, we got to know about Islamic and Conventional Foreign Exchange. In this topic, it defines the definition of foreign exchange, foreign exchange market and foreign exchange transaction. I also get to learn about Exchange Rate Quotation where they have direct and indirect quotations. This chapter also explain about Spot, Forward, Option and   Money   Market Hedging. And lastly, I’ve learned about Closing Forward Exchange Contract, calculating Swap Rate, Forward Rate and Cross Rate and the current Issues regarding shariah resolution on foreign currency. 

Regarding the issue of Covid-19 outbreak, it has created an enormous uncertainty shock to all people over the world and until today, there are 213 countries and territories around the world have reported  a total of 9,067,824 confirmed cases of this virus and a death toll of 471,040 deaths. As a result, this had led to the slowdown of the global economy and world trade since the functioning of global supply chains has been disrupted, affecting companies across the globe. Based on trade forecast press conference by World Trade Organization (WTO), world trade is expected to fall by between 13% and 32% in 2020 as the Covid-19 pandemic disrupts normal economic activity and life around the world. Therefore, WTO called on all governments around the world to work together in order to achieve much faster recovery than if each country goes it alone. So, the governments around the world can and must lay the foundations for a strong and socially inclusive recovery.

Chapter 1 – This chapter begin with the introduction to Islamic and conventional trade. I have earned on how important trade and financing towards the country, also the regulation on international trade in Islamic perspective.

Chapter 2 – From this chapter, I have learned about the risks involve while doing the trade. There are many risks that have to be bear by the buyer or seller. Besides, it also mentioned about the payment methods on that transactions. For example, Open Account/ Consignment, Payment in Advance, Documentary Collection and Documentary Credit. 

Chapter 3 – I have learned about documentary collections in international trade, financial, commercials and official documents. Other than that, I got to know the collection under documents against payment (D/P), collection under document against acceptance (D/A) and Collection Instructions.

Chapter 4 - I have learned about International Commercial Terms (Incoterms). As whole, it mentioned about some terms of an international sales agreement that must be obey by the parties involved. Incoterms states who is responsible for paying and managing the shipment, insurance, documentation, customs clearance and logistical activities. 

Chapter 5 & 6 - I have learned about the Uniforms and Practice for Documentary Credit (UCP). UCP is a set of rules agreed by the international Chamber of Commerce (ICC) that governs international documentary credit practices to issue a letter of credit. 

Chapter 7 – I have learned about the types of documentary credit which are transferable, back to back letter of credit and revolving documentary credit, red clause credit, green clause credit and counter credit.

Chapter 8 – I have learned about the facilities in Islamic and conventional trade and financing that can be used trade transactions. Islamic trade must avoid riba that forbidden under sharia principles.

Chapter 9 – I have learned about Export Credit Financing (ECR). There are two types of shipments which are pre-shipment and post-shipment. Besides, it also discusses about the applications and functions of ECR based on Islamic and conventional trade.

Chapter 10 – It discusses about the Foreign Exchange which is exchange of currency between two countries in foreign exchange market. There are four types of foreign exchange which are spot, forward, option and money market hedging.  I also learned on how to calculate swap rate, forward rate and cross rate.

Topic 2
In this chapter, I have learned the risk issues in international trade and also risk mitigation in payment method, commercial contracts and bank guarantee.  There are various types of payment method such as clean payment, documentary collection and documentary credit. 

Chapter 3
In this chapter, I have learn the exposure of Islamic and conventional documentary collection. The Uniform Rules for Collections 522 is outlines the banks make relation to documents against acceptance (D/A) and documents payment (D/P). Documents acceptance are an arrangement between importer and exporter, specifying that the importer is not to be given the documentation that confirms their ownership of the imported goods until the bill of exchange has been paid or an agreement to pay has been made.

Chapter 4
In this chapter, I have learned about incoterm 2010 which is simplify terms of an international sales agreement. It cover several term covered by incoterm such as warehousing, packing and loading, inland freight, terminal charges, freight forwarder’s fees, ocean or air freight, duty, taxes and customs clearance, delivery, security clearances (new to 2010). This include information of rules for mode of transport such as Ex Works (EXW), Free Carrier (FCA), Carriage and Insurance Paid to (CIP), Delivered at Terminal (DAT), Delivered at Place (DAP) and Delivered Duty Paid (DPP). The rules for sea and inland waterway transport that includes Free Alongside Ship (FAS) and Free on Board (FOB).

Chapter 5 and 6
 In this chapter, I have learned about Uniform Customs and Practice (UCP) for Documentary Credits is a publication of International Chamber of Commerce (ICC) which is a voluntary code applied by the banks all over the world. Though the drawn-up rules of UCP do not have the binding of law, they have gained almost universal acceptance and are incorporated as a reference in all documentary credits.

Chapter 7
In this chapter, I have learned from the case study that is the transferable document credit, back to back documentary credit and revolving documentary credit. Back to back letter of credit is triangle trade which is the middleman located between the buyer (importer) and seller (exporter). Besides that, I learned about red clause credit, green clause credit and counter credit.

Chapter 8
In this chapter, I have learned about Islamic and conventional trade financing facilities. It consist bill discounting, bankers acceptance, trust receipts, foreign currency loan, overdraft, shipping guarantee and others. The conventional and Islamic contract are different due to the shariah compliance and needs of the contract.

Chapter 9: In this chapter, I have learned about the Export Credit Refinancing. The overview of ECRi, Pre-shipment ECRi (used Murabahah and Bai al Dayn), Post-shipment (Bai al Dayn), ECRi and differentiate between Conventional and Islamic-based ECR. The objective of IECR is to promote the export of manufactured products, agricultural products and primary commodities that are halal and permissible according to syariah principles. 

Chapter 10
In this chapter, I have learned about the Islamic and Conventional Foreign Exchange. Foreign exchange is the exchange of a currency of one country to another country and for foreign exchange in market is able to transfer purchasing power from one country to another. This topic also explained about Exchange Rate Quotation, Spot, Forward, Option and Money Market Hedging, Closing Forward Exchange Contract, Calculating Swap Rate, Forward Rate and Cross Rate and Current Issues.

 

Chapter 2 - This chapter is about the method of international trade settlement. In international trade, of course it will have the risk to the seller, buyer, country risk, force major and foreign exchange risk that have be bear by both of importer and exporter. Besides, in this chapter also learnt about the method of payment in international trade such as using the clean payment, documentary collection or as known as letter of credit and documentary credit. I also learnt on how the international trade are be done because different contract have a different method of payment.

Chapter 3 - What I understand is about the documentary collection in details. The documentary collections are organized by Uniform Rules for Collections, 1995 Revision, ICC Publication No. 522, later known as URC 522 which to govern the documentary collections. URC 522 is a set of rules that helps all parties in the process of obtaining debt, money or assets. Rules are made to solve everyday problems of practitioners. It have all the 26 article that cover the needs of the principal and / or remitting bank to attach separate documents, collection instructions, to each collection subject to the rules and regulations. 

 

Chapter 4 - I learned about Incoterms 2010 that implement by International Chamber of Commerce (ICC). Incoterms or International Trade Rules are a set of rules that specify the conditions of sale in the procurement of material goods. Incoterm covers issues related to the transportation of products from seller to buyer. This is optional, but makes the transaction easier, and the whole process goes smoother. It is about the rules and regulation to be applied in the real world because it is involving with one country with another country that have a different type of rules and each of them have to bear their own risks. Because if anything happen, it must be either importer or exporter that have to be responsible for the cost or losses because it involves with a huge amount. 

 

Chapter 5 & Chapter 6 - It is about the Uniform Customs and Practice 500 (UCP 500) is about the set of rules on the issuance and use of letters of credit. Documentary Credit is a payment technique whereby a bank commits itself, on behalf of its client (the importer), to pay to a beneficiary (the exporter) within a fixed period, the price of goods / services against the delivery by the exporter of previously agreed and compliant documents proving the value and shipment of the goods / services. UCP 500 was implemented on 1 January 1994 while UCP 600 was implemented on 1 July 2007. Both are comprehensive and practical working aid to bankers, lawyers, importers, and exporters, transport executives, educators, and everyone involved in documentary credit transactions worldwide. UCP 500 have about 49 articles while UCP 600 have 39 articles but have been upgrade from the UCP 500. 

 

Chapter 7 - In this chapter, I learnt about the Special Types of Islamic and Conventional Documentary Credit. Basically topic is explain about 6 types of documentary credit such as transferable documentary credit, back to back documentary credit, revolving documentary credit, red clause credit, green clause credit and counter credit. All this types of documentary credit have their own situation likes the case study that given by Dr. So I can be more understand on how the documentary credit be applied in the real situation.

 

Chapter 8 - From this chapter, I learnt about Islamic and Conventional Trade Financing Facilities. There are so many facilities that provided such as Letter of Credit and bill discounting facilities, bankers acceptance, trust receipts, foreign currency loan, overdraft, packing credit, shipping guarantee and export credit. Refinancing in details. Besides, I also learnt the Islamic Contracts in Trade Finance concept such Al-Mudharabah, Al-Musyarakah, Bai’al Dayn, Al-Murabahah, Al-Kafalah, Naqad and Islamic Accepted Bill. All this Islamic contract is important to be understand because if we are working in Islamic bank, we will using all this contract. 

 

Chapter 9 - Based on this chapter, I learnt about the Export Credit Refinancing (ECR). It is a scheme where the exime bank provide the short term export financing to direct and indirect importer through commercial banks before or during shipment of the products. There are also a few Islamic contract that be using in pre-shipment ECR which is Al-Murabahah and Bay Al Dayn while post-shipment IECR using use the bay Al dayn contract. 

 

Chapter 10 - In this chapter, I learnt about Islamic and Conventional Foreign Exchange. The foreign exchange is the exchange of a currency of one country or the currency of another. Foreign exchange important for both the exporter and importer in trading because different country have different currency, quotation and rates. I also learnt on how to calculate the Swap rate, Forward rate and Cross Rate and the current issues in Islamic international trade on how the rulling of Shariah in foreign exchange. 

 

Overall what have I learned from chapter 1 until chapter 10 in Islamic International Trade and Financing are all about how the Islamic International Trade and Financing applied in the real world. It is all about how the trading between one country with another country are doing business. Starting from the importer and exporter making an agreement, the documents that been using in the business, the foreign exchange, the way of the shipment will be conduct, the risks of seller and buyer and until the product have been received from exporter to the importer. Islamic international trade is very important because one country will dealing with another country. In the real world, if I working in this sectors, this all must be conduct carefully because it involve with million or billion dollars. 

Chapter 1 - In this chapter, I have learned the basis of International Trade Theory. This chapter focused on beneficial for a country to engage in international and also the pattern of international trade observed in the world economy. Free Trade occurs when a government does not attempt to influence, through quotas or duties, what its citizens can buy from another country or what they can produce and sell to another country.

Chapter 2 - In this chapter, I have learned about the method of international trade settlement such as Open Account/Consignment, Payment in Advance, Documentary Collection and documentary Credit. Open account is when the goods will be delivered first compare to advance payment which means, the payment must be settle down first. In this chapter also, it stated that in the international trade, risk will occur, and must mitigate the risk.

Chapter 3 - In this chapter , it is about the meaning of documentary collection and the process of how it works. In these transactions it involved importer, exporter, and banks that act as issuing banks on behalf of exporter. Documentary bills for collection-i are one of the methods of trade transactions that accepted and have been practiced by the Islamic Bank.

Chapter 4 - I have learned about Incoterms. Incoterms or known as trade terms are key elements of international contracts of sale. It was revised 6 times before incoterms 2010 and it become current revision that become effective in January 2011.

Chapter 5 - I have learned about Uniform Customs and Practice for Documentary Credit. UPC is a set of rules agreed by the International Chamber of Commerce (ICC) to issue letter of credit. The UPC is utilized by financial institutions and commercial parties and accepted universally  by all the countries. There are 49 articles related to UCP 500 that emphasize practical working aid to bankers, lawyers, exporters and importers. 

Chapter 6 - This topic is Islamic and Conventional Documentary Credit. We can justify that difference between the documents. The process when using it and how the document revoked also discussed in this chapter. 

Chapter 7 - This chapter is entitled special types of Islamic and Conventional documentary credit. I have learned Transferable Documentary Credit, Back to Back Documentary Credit, Revolving Documentary Credit, Red Clause Credit, Green Clause Credit and Counter Credit. 

Chapter 8 - In this chapter I have learned Islamic and Conventional Trade Financing Facilities which are Letter of Credit and Bill Discounting Facilities Bankers Acceptance, Trust Receipts, Foreign Currency Loan, Overdraft, Packing Credit, Shipping Guarantee, Export Credit Refinancing, Murabahah as an Alternative in Interest Financing of Trade, The Complete System of Islamic Modes of Trade Finance, Islamic Financing – Al-Mudharabah, Al-Musyarakah, Bai’al Dayn, Al-Murabahah, Al-Kafalah, Naqad, Islamic Accepted Bill and lastly . Risk and Insurance

Chapter 9 - I have learned about the export credit refinancing which this topic includes the Pre-Shipment ECR, Post-shipment ECR and also Conventional vs Islamic-based ECR. 

Chapter 10 - I have learned Foreign Exchange - The exchange of a currency of one country or the currency of another. Then, Foreign Exchange Market - An arena through which one is able to transfer purchasing power from one country to another. Foreign Exchange Transaction - Foreign exchange transaction is an exchange of a specific amount of one currency for another currency, between two counterparties at an agreed rate and to be delivered at a certain agreed date.

Chapter 1 explained the international trade theory and the beneficial for a country to engage in international trade. I also understand about the free trade that occurs when a government does not attempt to influence, through quotas or duties, what its citizens can buy from another country or what they can produce and sell to another country. This chapter also explained implications of business in international trade such as location, first-mover and policy. 

From this chapter I learned there are several major risks occur in International Trade such as country risk, seller’s risk, buyer’s risk, foreign exchange risk and commercial risk. Other than that, risk mitigation such as bank guarantee, commercial contract and payment methods. Bank guarantee where how help in dealing with the risk. Then, payment method of international trade consists of documentary credit, clean payment and documentary collection which explained the high and least risk either for exporter or importer. 

Documentary collections is an agreement where the exporter shipped the goods to importer and exporter sends the shipping documents and drafts to his bank for further send to importer’s bank to collect payment. However, this agreement is riskier for the seller but profitable to the buyer. Inward bill and Outward bill for collections explained the contract based on Wakalah which include Islamic Bank as an agent. For documentary collections, there are 26 articles as references and guidelines to this agreement. 

Chapter 4 explained about International Commercial Terms (Incoterms) that cover about the division of responsibilities for the both buyer and seller. Incoterm is set of instructions used in the global transportation of goods. The terms dictate which party is responsible for the risks, costs, insurance, documentation and liabilities associated with the shipment at each stage of the shipping process. 

In this topic, it explains about Uniform Customs and Practice for Documentary Credit (UCP) which a set of rules on the issuance and use the letter of credits that apply to finance institutions. Banks and lender are subjects to this regulation which aims to standardise international trade, reduce the risks of trading goods and services, and govern trade. 

This chapter is about Special Types of Islamic and Conventional Documentary Credit. The documents are transferable documentary credit, back to back documentary credit, revolving documentary credit, red clause credit, green clause credit and counter credit. All of this documents used in International Trade agreement which have their own function, work flow and mechanism. 

This chapter is about Islamic international trade and financing facilities. It explains more on the letter of credit and bill discounting facilities, bankers’ acceptance, trust receipts, foreign currency loan, overdraft, packing credit, shipping guarantee, export credit refinancing. All of this documents have the differences of function, responsibilities, work flow and also features. In addition, I also gain understanding about the Islamic contract in trade fiancé such as the contract of Mudharabah, Musyarakah, Wakalah, Bay al Dayn, Kafalah, Naqad and Islamic accepted bill where all of this are used by the parties involved in trade. 

Export Credit Refinancing which consist about pre and post shipment in trade. Pre shipment facility is an advance made by Exim bank to facilitate the production of eligible goods for export prior to shipment and to promote backward linkages in industrial development. Post shipment facility is an advance made by Exim bank to exporters to finance the export of eligible goods after shipments.  In Islamic finance, the contract used in pre shipment is Murabahah and Bay al Dayn while for the post shipment also used bay al Dayn agreement. The method used in this financing is order-based method and CP method. 

From this chapter, I learnt about Islamic foreign exchange which is Spot, Forward, Option and   Money   Market Hedging. I also get further understanding on closing forward exchange contract and also the calculation on swap rate, forward rate and cross rate that used in the foreign exchange. 

Chapter 2 – In this chapter, the risks involved in trading are studied. Buyers and sellers are subject to various risks during the sale process. This chapter also touches on what payment methods can be used. For example, Open an Account / Consignment, Prepayment, Documentary Collection and Documentary Credit.

Chapter 3 – Knowledge of documentary collections in international trade, finance, advertising and official documents has been obtained in this chapter. I can also study collections under unpaid documents (D / P), collections under documents on receipt (D / A) and Collection Instructions.

This chapter describes the International Commercial Terms (Incoterms). Some of the terms of an international sale agreement that must be complied with by the parties are covered in this chapter. Incoterms states who is responsible for the payment and management of shipping, insurance, documentation, customs clearance and logistics activities.

In this chapter, I have gained knowledge on Uniforms and Practices for Documentary Credit (UCP). UCP is a set of regulations where it is approved by the International Chamber of Commerce (ICC) which regulates international documentary credit practices for issuing credit letters.

Chapter 7 – This chapter has taught me about the types of transferable document credit, back-to-back credit and revolving documentary credit, red clause credit, green clause credit and counter credit.

Chapter 8 – This chapter taught me about the ease of trading and Islamic and conventional financing that can be used for trading transactions. The Shariah principle prohibits Islamic trade from engaging in transactions that involve the elements of usury.

Chapter 9 – This chapter taught me about Export Credit Financing (ECR). Shipping consists of two types: pre-shipment and post-shipment. The applications and functions of ECRs based on Islamic and conventional trade are also discussed in this chapter.

Chapter 10 – This chapter discusses Foreign Exchange, which is the currency exchange between the two countries in the foreign exchange market. Foreign exchange is of four types. Among them are spot, forward, option and money market hedging. How to calculate exchange rates, futures and cross rates is also learned in this chapter.

 

For chapter two I have learned risks in international trade, I understood the major parts that usually faces the risk which are country risk, buyer risk sellers risk foreign exchange risk and commercial risk as well I have noticed what might cause the risk and also how to analyses or measure the risk. I also study the principles of commercial contract as well the payment methods.

 

Chapter 3 focuses on documentary collections. I have understood this chapter the collection cycle between importer and exporter and there around 26 articles explain all things need like Collection Instructions, Uniform Rules for Collection and so on.

 

I have learned chapter 4 incoterm is to issue transporting products from the seller to the buyer and also carrying products. In addition, I understood the changes of 2010, I understand rules for any mode of transport such as, Free Carrier, Carriage Paid to, Carriage and Insurance Paid to, delivered at Terminal, delivered at Place and Delivered Duty Paid.

 

I have learned this chapter 7 types of documentary credit of both Islamic and conventional, I have studied the concept, conditions and their assignment proceeds of this documentary credits which are transferable letter of credit, Back to Back to back letter of credit, Red Clause Credit, Green Clause Credit, Counter Credit of credit.

 

At first point chapter 8 expresses the element of riba and its hokum secondly I have educated the meaning of letter of credit and how to use it as well discounting facilities in addition I have learning the concept of Bankers’ Acceptance, Trust Receipts, Foreign Currency Loan, Overdraft, Packing Credit, Shipping Guarantee, Export Credit Refinancing furthermore, I understand Islamic Contracts in Trade Finance such as murabaha, mudharaba, musharaka, al wakala, bai al dayn, kafalah and naqad and lastly I got some information about risk and insurance. 

 

I have learned a lot of thing for chapter 9, firstly I have educated the meaning of export credit financing and its branches which are pre-shipment and post-shipment as well their concept and objectives also sharia principles of pre-shipment ecr of murabah and bai al dayn as well post shipment iecr of bai al dayn, I have also learned amount that is suitable for financing under pre-shipment ecr-I and period of financing 

 

for chapter 10 I have learned the difference between Islamic foreign exchange and conventional foreign exchange in addition exchange rate quotations and the ways that can be quoted which is Direct quotation and Indirect quotation. I also understand the meanings and differences of Spot, Forward, Option and Money Market Hedging, whether its cross rate or swap rate as well their calculations, lastly I have studied this chapter current sharia issues and resolutions of foreign currency.

Regarding the topics that I learnt n Islamic trade and financing, I can summarize that in the Topic 1 is regarding the trade theory which the free trade occurs when a government does not attempts to influence through quotas or duties, what its citizen can buy from another country or what they can produce and sell to another country. The benefits of trading for a country to engage in international trade allow a country to specialize in the manufacture and export of products that can be produced most efficiently in the country. 

In Topic 2, method of international trade which is open account, payment in advance, documentary collection and documentary credit known as letter of credit. In this topic also discussed about the risk issue in international trade including the credit risk. In customer perspective, the credit risk has lower cost of financing, managing liquidity and lower risks in counter parties, foreign exchange and country risk. While form the bank perspective, the credit risk has higher revenue and return, lower capital and lower counter party, foreign exchange and country risk. 

In Topic 3, Islamic and conventional documentary collection discussed regarding the definition of the documentary collection which is an arrangement whereby the exporter shipped the goods to importer and exporter sends the shipping documents and drafts to his bank for further send to importer’s bank to collect payment or acceptance from the importer on his behalf. While for documentary bills for collection-i, is referred to handling of documents by the Islamic bank according to Syariah principles. There are 26 articles including the collection instruction, commercial documents, method of payment, currency of payment, promissory notes and so on regarding the trading. 

While in Topic 4, Incoterms 2010 known as International Commercial Terms published in 1936 by International Chamber of Commerce for the terms of an international sales agreement. The purposes of the Incoterms 2010 to apply the contract of sale. The terms covered by Incoterms including the warehousing, packing and loading, inland freight, terminal charges, freight forwarder’s fees, ocean or air freight, duty or taxes, delivery and security clearance. 

Next, in Topic 5 & 6, uniform customs and practice for documentary credit discussed regarding the applying UPC 600 and ISBP. In this topic, I learned about the provision and coverage in the UPC 600, the contract of sale, the application of UPC, interpretation and application of UPC 600 and so on based on the articles provided. 

In Topic 7, special types of Islamic and conventional documentary credit discussed about the types of letter of credit in Islamic and conventional which are standby letter of credit, transferable letter of credit, back to back letter of credit, red clause letter of credit, green house letter of credit. It is regarding the procedure or steps of documentary credit to a third party to fulfill the contractual obligations. 

In Topic 8, Islamic and conventional trade financing facilities discussed about the instruments or product that been used in facilities trading such as bill discounting, bank guarantee, Islamic accepted bills, trust receipts, shipping guarantee and so on for the importer and exporter. In this topic, I also learned regarding the Murabahah as an alternative in interest financing trade. 

In Topic 9, export credit refinancing (ECR) discussed about the overview of ECR in terms of definition, and concept of the pre shipment financing. The objective of ECR-i as to promote the export of manufactured products, agricultural products and primary commodities that are halal and permissible according to Syariah principles. 

In Topic 10, Islamic and conventional foreign exchange. As we know, the definition of the foreign exchange is an exchange of a specific amount of one currency for another currency, between two counterparties at an agreed rate and to be delivered at a certain agreed date. This topic also discussed about the exchange rate quotation.

For chapter one we learned about theory of international trade where free trade occur when government does not attempt to influence in what citizens can buy or sell from another country and the benefit for enter into international trade. Then, I remember that Dr. Noriza have said that when we talk about trade we should know who is buyer (importers) and seller (exporters). International trade also involve more than one country and use bank institutions as the intermediaries.

In chapter two, we have learned about the risk in international trade. As we know, risk may occur when international trade happen such as country risk, buyer’s risk, seller’s risk and also foreign exchange risk. This chapter also covered payment method including clean payment, documentary credit, and documentary collection. Every type of payment have its own risk. 

In chapter three, we learned about documentary collection. A documentary collection offers some protection to the seller and is generally used when a seller and a buyer know each other. Under this method, the documents are released to the buyer based on either document against payment (D/P), or documents against acceptance terms (D/A). In the case of D/P, the buyer is given the documents only when a payment is made to the bank while under D/A, a bill of exchange accompanies the collection order, buyer gets the documents after accepting the bill of exchange. 

In chapter four, we discussed about Incoterms. Incoterms is an international sales agreement published by International Chamber of Commerce. There are several rules that we discussed for any mode of transportation such as Ex Works (EXW), Free Carrier (FCA), Carriage Paid To (CPT), Carriage and Insurance Paid To (CIP), Delivered at Terminal (DAT), Delivered at Place (DAP), Delivered Duty Paid (DDP). Besides that, rules for sea and inland waterway transport include Free Alongside Ship (FAS), Free On Board (FOB), Cost and Freight (CFR), and Cost, Insurance and Freight (CIF).

In chapter five, we learned about UCP600 is a set of rules agreed by the International Chamber of Commerce, which apply to finance institutions which issue Letters of Credit. Through this chapter, I have learned that UCP600 is established to provide commercial parties, particularly banks, with standard techniques and methods for handling letters of credit in international trade finance. 

In chapter six, we discussed about Islamic Conventional Documentary Credit. Documentary credits is a written undertaking of a bank (issuing bank) to an exporter (beneficiary), given at the request of a buyer (applicant) to pay a certain amount, within a certain time frame, for certain documents. There are usually at least two banks involved in any letter of credit such as the issuing bank, which is the buyer’s bank, and secondly, the advising bank, which is normally the seller’s bank.

In chapter seven, we learned more detailed about documentary credit. Documentary credit is generally use when the seller and buyer did not know each other. Besides that, the contract size is large or there is a high economic or political risk. It is very commonly used as a method of payment in countries in the Middle East, Asia, Africa or Eastern Europe. By using Letter of Credit, the seller can protects himself from the buyer failing to pay by asking an L/C from the buyer’s bank before the goods are shipped. Meanwhile, the buyer protects himself by calling for documents under the L/C which prove the seller shipped the goods.

Chapter eight discussed about Islamic and Conventional Trade Financing Facilities. In this chapter, I learned that Letter of Credit - i (LC - i) is a written undertaking by the Bank at the request of a buyer/applicant to pay the seller/beneficiary a certain sum of money as stipulated in the LC-i provided that the seller/beneficiary complies with the terms and conditions of the LC-i. I also learned about Islamic contracts in trade finance that include Al-Murabahah, Al-Mudharabah, Al-Musharakah, Al-Wakalah, Bai-Al-Dayn, Kafalah, Al-Kafalah Bank Guarantee, Al-Kafalah Shipping Guarantee, and Naqad.

Chapter nine discussed about Export Credit Refinancing (ECR). ECR provides an alternative short term pre- and post-shipment financing to direct or indirect exporters to promote export of manufactured products, agriculture products and primary commodities. The objectives of ECR is to promote the export of manufactured products, agricultural products and selected primary commodities, provide exporters with ready access to credit facilities and competitive interest rates, and develop backward linkages in export-oriented industries.

In the last chapter, we discussed about Islamic foreign exchange. Islamic banks exchange currencies on the spot in transactions such as bank transfer or remittance expressed in a foreign currency, payment for goods imported from another country, payment for services billed in a foreign currency, in the case of a sell or a purchase of a foreign currency in cash or traveler’s cheque or bank draft against another currency, or when a client deposits a cheque or bank draft made out in a foreign currency and requires payment in local currency.

another nation or what they can manufacture and distribute to another country by means of quotas or duties.Trading advantages for a country to participate in foreign trade allow a country to specialize in the production and export of goods that can be more easily manufactured in the region.
In chapter two i learnt that the threats connected with the exchange are identified. As during selling process, sellers and buyers are subject to different risks. This whole chapter focuses about what methods of payment can be used. Open Account / Consignment, Prepaid, Documentary Collection and Documentary Credit for example.
In chapter three, this topic discuss to the sellers and buyers about the overview of documentary collection, the flow and the advantages and inconveniences. This chapter also give an explanation about the  26 articles regarding the rules set under URC 522.
In chapter four, mentioned about the International Commercial Terms (Incoterms) that cover the section of both buyer and seller responsibilities. Incoterm is a compilation of guidelines used in the global transport of products. The terms determine the entity is liable at any point in the shipping cycle for the hazards, expenses, protection, paperwork and liability involved with the shipment.
in Chapter seven, this chapter consists of the Documentary credit types, or we call it a Letter of Credit. LOC forms are transferable LOCs where there are 3 parties where the first recipient or the intermediaries may delegate the LOC to another group or the second recipient. The second LOC is back-to - back LOC where over one letter of credit may be given. As well as the third is the red clause LOC and the last is a letter of credit from Green House.
in chapter eight, Banks play an significant role in promoting and funding foreign exchange deals with the consequence that the global economy is rising. Today banks may have numerous commercial financing facilities and assist firms in their trade practices by providing importers and exporters specific forms of advances. As such a bank 's position is complementary to a company's business growth in local are and also international.
Chapter nine,  learned the importance of process of export credit refinancing pre- and post-shipment cycles  in doing trade internationally  The prime purpose of ECR is to support exports of manufactured goods, agricultural products and primary commodities that are allowed in the islamic law and legitimate in accordance with Syariah principles.
Chapter ten explained about Islamic and conventional foreign exchange in the foreign exchange industry, where it is regarding currency trade between two countries or other third countries. This method is called trade in foreign exchange. Exchange of currency is based on either direct or indirect quoting of its quotation of the exchange rate.

CHAPTER 1: I have learned about the operation of international trade. I learned about the pattern of international trade that observed in the world economy. I also learned the way they do import and export with a big amount of units. As well as the benefits of trade which allows the country to specialize in the manufacture and export of products that can be produced most efficiently in that country.

CHAPTER 2: I have learned the risk issues in international trade and how the bank deal with it. I learned the 3 types of payment methods which are documentary credit, clean payment, and documentary collection.

CHAPTER 3: I learned about the documentary collection, and also its advantages and disadvantages for importer, exporter, and banks. As well as the Collection under Document Against Payment (D/P), Collection Instructions and Uniform Rules for Collection (URC No 522), Collection under Document Against Acceptance (D/A), Commercial, Financial and Official Documents.

CHAPTER 4@5: I have learned about incoterms. also, the rules of incoterms which are 11 rules ( EXW, FCA, CPT, CIP, DAT, DAP, DDP for sea transport rules while FAS, FOB, CFR, CIF for inland waterway transport) .it is standardized through the international chamber of commerce (ICC), it’s aimed at reducing confusion between importer and exporter, by understanding tasks, costs, risks, and responsibilities. We have learned about the Uniform customs and practices for documentary credit. I have also learned about UCP 500 and UCP 600.

CHAPTER 6: I have learned about the differences between Islamic and conventional documentary credit. Documentary credit is a written undertaking given via a bank to the exporter on behalf of the importer. Also, the common forms of payment are negotiation, Sight, and acceptance, and deferred.

 

CHAPTER 7:i I have learned about the letters of credit. It involves middleman between buyer and seller and that is why the letter of credit used. have learned about the types of documentary credit which are transferable, back to back letter of credit and revolving documentary credit, red clause credit, green clause credit, and counter credit.

CHAPTER 8: This topic discussed the facilities in Islamic and conventional trade and financing that can be used in trade transactions. It consists of banker's acceptance, trust receipt, foreign currency loan, overdraft, packing credit, shipping guarantee, export credit financing, and others.

CHAPTER 9: I have learned about Export Credit Financing (ECR). It consists of pre-shipment ECR, post-shipment ECR, besides, it also discussed the applications and functions of ECR based on both the Islamic and conventional trade.

 

CHAPTER 10: The last chapter is about Islamic and conventional foreign exchange. And the relationship between two currencies of countries in the foreign exchange market. As well as, there are four types of foreign exchange which are spot, forward, option, and money market hedging. And how to calculate the swap rate, forward rate, and cross rate.

 I learned from this chapter that every country specializes in a specific commodity due to mobility, productivity and other endowments of economic resources. This stimulates a country to go for international trade and that the basis of international trade lies in the diversity of economic resources in different countries

 

Chapter 2

I have come to understand that risks involve in being international trader:

1.       foreign exchange risk. Foreign exchange risk usually concerns accounts receivable and payable for contracts that are or soon will be in force. 

2.       Credit risk. Credit or counterparty risk is the risk of not collecting an account receivable.

3.       Shipping risks. 

 

Chapter 3

In this chapter the notes emphasis on how to do a documentary collection which is a process by which an exporter's bank collects funds from the importer's bank in exchange for documents detailing shipped merchandise. A documentary collection is a trade transaction in which exporters allow their bank to act as a collection agent for payment of shipped goods to the buyer.

 

Chapter 4

From this chapter The purpose of Incoterms is to provide common interpretation for the different trade terms used in international trade. In international business, parties are from diverse nations. Different meanings exist for different terms, due to different trade practices followed in those countries.

  

Chapter 7

Form this chapter it explains the types how conduct credit agreement by assigning the proceeds of a documentary credit to a third party is a very powerful tool that can really assist undercapitalized traders to fulfil their contractual obligations to their customer.

 

Chapter 8

Islamic and conventional exchange financing facilities talked about the instruments or item that been utilized in offices exchanging, for example, bill discounting, bank guratee, Islamic accepted bills, trust receipts, shipping grantee ensure, etc for the merchant and exporter. In this subject, I additionally got the hang of viewing the Murabahah as an option as a second option financing exchange.

Chapter 9

the significance of export credit financing and its branches Shipping consists of two types: pre-shipment and post-shipment, I have additionally learned sum that is appropriate for financing under pre-shipment ecr-I and time of financing.

 

Chapter 10

I learnt about Islamic and Conventional Foreign Exchange. The foreign exchange is the exchange of a currency of one country or the currency of another. Foreign exchange important for both the exporter and importer in trading this also topic also explained about Exchange Rate Quotation, Spot, Forward, Option and Money Market Hedging, Closing Forward Exchange Contract.

 

 

I learned that the international trade is important because it can improve the country’s efficiency by focusing on their expertise and export them to other country that demand in it. It’s also allow more foreign investment and enhance the employment rate and income of people. International trade also allow us to purchase the product that unavailable in our country. The country also need to invest more in technology to optimize efficiency and discover the possibility of new product for trade in order to maintain the competitiveness with other country

 

However, there are certain risk involved including country risk, foreign exchange risk, buyer and seller risk that will affect the security and reputation of trade. Therefore several steps and regulation enhancement has taken to mitigate the risk. There are also several types of payment method to serve the needs of exporters and importers, the most frequently used are letter of credit.

 

Letter of credit is a guarantee issued by the bank that the trade are secured and will get the payment or goods once the documents has been shipped out or received at stipulated time. There are several risk and difficulties involving the issuance and receivance of documents involving different countries have their own regulation, therefore, an uniform rules has been created by ICC to standardize the document collections around the world.

 

In my view in chapter 4, I really like how incoterm elaborate the detail regarding shipping matter and obligation involving buyer and seller, its distingush who will need to bear the cost and risk of the shipped goods per type of shipping method. As time passed by, incoterm need to be reviewed to adapt with current norm.

 

There are many types of letter of credit, they are Standby Letter of Credit, Transferable Letter of Credit, Back to Back Letter of Credit, Red Clause Letter of Credit, and Green House Letter of Credit. Most of the LC are rarely used due to its risk to the bank to get the payment, while some benefit The Exporters as they received advances from part of the good value to be shipped.

 

There are also have islamic letter of credit in islamic trade which issued under murabaha contract. I also learned that there are other services that works together with Letter of Credit, each of them has different process and procedure, but the aim is to finance the trade made by exporter and importer.

 

I understand that the purpose of short term ECR-i are to finance the exporter either for purchasing input to make the finishing product (pre-shipment) and to finance the value of the shipped goods (post-shipment). The goods must be halal and not listed in First Schedule of Custom Duties Order in order to access This financing facilities.

 

Foreign Exchange is very important in international trade, either importer or exporter wanted the payment in their currency. Therefore Shariah acknowledge spot and forward facility in Forex for international trade, but the conventional spot takes time up to 2 day, which give disadvantage when fluctuation occur, therefore it is not permissible. Shariah allowed the booking made by Islamic bank to avoid fluctuation, but only limit to currency hedging purpose.

 

In my general opinion. Corona Virus Diseases 2019 has give a huge impact to the global economy and force the major production to a halt in Malaysia and most in every country. But the demand and supply are still there, therefore it wont stop the international trade from keep going, but lot of safety measurement, company restructure, and country regulation need to be done adjust to ensure the trade speeding back to normal track.

 
World will gain its strength, and its start with us.
Get well soon Dr. Thank you for everything.

Chapter 10: I have learned about the Islamic and conventional foreign exchange which discuss more on the Definition, the Exchange Rate Quotation, the Spot, Forward, Option and   Money Market Hedging, the Closing Forward Exchange Contract, the Calculating Swap Rate, Forward Rate and Cross Rate and the Current Issues.