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What is an LC practitioner? My definition refers to an
export-import bank staff doing all export/import LC operations and export/import
documentary collection operations in the International Department as it is
called by local banks or in the Bills Department as it is called by foreign
banks in Taiwan. Before you jump into this field, it is advisable that you
should first note the following points.
1. Working English level
An LC practitioner must have an English level to the
extent that he or she (for easy writing, only ‘he’ will refer to LC
practitioner in the following text, and no sexual discrimination is implied)
can read and understand English (both reading and writing skills) as it is
the only language used in all documents related to LC or documentary
collection operations. With my experience in teaching the subjects of
‘Message Drafting’ and ‘Standby LC Operations and Fraud’ for Bank of Taiwan,
ICBC and other local banks, most of the LC practitioners do not have
good-enough English level and they normally do not read English newspapers
and magazines or subscribe to any LC-related magazines or journals. Luckily,
they only read ICC publications related to LC operations and collections. As
to standby LC, only a few are experienced in this subject.
2. Appetite for learning
He must have an appetite for learning, and he must
also learn quickly because he has to familiarize himself with the following
operations – with or without a mentor in one to three months.
- LC advising
- Examination of documents (under LC and documentary
collections)
- LC transfer
- Back-to-back LC issuance
- Import LC issuance
- Shipping guarantee under import LC
- Endorsement of B/L (both export and import)
- Retirement of import LC loan
- Settlement or payment under LC
- Documentary collections (D/P or D/A)
- Import loan under O/A (open account)
- Packing loan under export LC
- Message drafting (outgoing SWIFT or telex messages)
Without a mentor and sufficient time, this is not an
easy task. There is no doubt that problems will surface in LC operations,
creating loss to banks.
3. Extra time and extra cash which he can spare
In addition to knowing all operations, he should
spare some of his time by ‘googling’ some worth-reading articles or
information through ‘google.com’ at home or while he is working at bank,
making him married to PC or Internet instead of his lonely wife and children.
Remember, time is money, and money counts. He may shorten his lunch break
hours or enrich his professional knowledge reading articles published in
newspapers or other magazines and journals during his lunch break.
On weekends, he may not have time with his
girlfriend or family for a picnic or vacation. Instead, he has to go to
public or universities’ libraries reading articles in magazines or
newspapers or looking for professional magazines, journals or textbooks (which
can be borrowed). Copying of these articles for personal reference must be
done and it is allowed only in libraries.
On the other hand, he should have some extra cash
spared for subscribing to some professional magazines and ICC publications
or for copying articles at the libraries or for attending an LC workshop or
seminar at his own expense.
In order to improve his English standard, especially
writing skill, he may take an English writing course at night
4. Slow job promotion
Operations conducted by LC practitioners are
categorized as commercial banking or trade financing in local banks. Due to
low profit margin, commercial banking business is not greatly encouraged as
it is not a money-making business but only paper work. In view of this,
promotion review of staff in this area by banks is always given low priority,
thus leading to less promotion and even less bonus than other money-making
businesses of banks.
5. High career risk
With overbanking in Taiwan and restrictions on
banks’ expansion into foreign countries (especially in China), mergers and
acquisitions between banks as well as between the 14 financial holding
companies (which will happen very soon), staff of commercial banking are
greatly cut and consolidated or provided with early retirement. Worst of
all, some senior experienced LC staff are transferred to other departments
with which they are not familiar, handling businesses such as sales of
mutual funds, insurance, credit card and cash card, housing loan and
consumer loans. The required business volume and target imposed by banks on
these transferred staff have always put them out of job or have forced them
to quit their jobs or have been laid off by banks due to their not reaching
business volume and target set by banks.
Conclusion
Wrongly or rightly, the above five points are not
exhaustive but they deserve serious consideration by existing LC
practitioners or those who are planning to land a bank job in this field.
Based on my experience, an LC practitioner has to develop an interest in
reading on a wide scale in order to master his professional knowledge and
enrich his international perspectives related to commercial banking and
international trade. For this, I have introduced my own reading method to a
lot of my bank friends and college students. It is called hop-and-jump
reading method – reading only the articles which interest you the
most
in general or which may help you in your banking
career in particular. As you do not have too much time, your time spared
must be properly managed.
LC practitioners are advised to read the following
publications if time and money are permitted. I myself have been reading
most of them for over 30 years, and I still find myself unqualified in some
fields, such as transport, insurance, laws regarding injunction and fraud
under LC as well as international trade, all relating to LC operations.
Foreign Newspapers:
The Wall Street Journal
Financial Times
The International Herald Tribune
Magazines and journals:
The Economist
Business Week
Time
Newsweek
Fortune
Far Eastern Economic Review
U.S. News & World Report
Harvard Business Review
The China Business Review
Financial magazines and journals:
Euromoney
The Banker
Finance Asia
Asiamoney
Institutional Investor
ABA Banking Journal
ABA Bank Marketing
Business Credit
Global Finance
Professional magazines and journals:
LCVIEWS (online magazine)
L/C Update
Documentary Credit World
LC Monitor
Trade and Forfaiting Review
Global Trade Review
Lloyd’s Law Reports
Journal of International Banking Law
Journal of International Banking Law & Regulation
ICC Publications:
LC operations
Leading Court Cases on Letters of Credit
DC Insight
Incoterms 2000 Publication No. 560
ICC Guide to Bank-to-Bank Reimbursements under
Documentary Credits
ICC Uniform Rules for Bank-to-Bank Reimbursements -
a Commentary
ICC Uniform Rules for Bank-to-Bank Reimbursements
under Documentary Credits (URR 525)
ICC Uniform Customs and Practices for Documentary
Credits
ICC Uniform Customs and Practice for Documentary
Credits (UCP 500) + eUCP
Supplement to UCP 500 for Electronic Presentation (eUCP)
International Standard Banking Practice (ISBP)
Leading Court Cases on Letters of Credit
2005 Annual Survey of Letter of Credit Law &
Practice
2006 Annual Survey of Letter of Credit Law &
Practice
ICC Guide to the eUCP
UCP500 & ISP98 Compared
ICC Standard Documentary Credit Forms for the UCP
500
ICC Guide to Documentary Credit Operations for the
UCP 500
Documentary Credit Law Throughout the World
Documentary Credits: UCP 500 and 400 Compared
Documentary Collection operations
ICC Guide to Collection Operations for URC 522
Uniform Rules for Collections - a Commentary
ICC Uniform Rules for Collections (URC 522)
Standby LC and Guarantee
Guarantee and Standby LC
Bank Guarantees in International Trade
ICC Uniform Rules for Contract Bonds
ICC Uniform Rules for Contract Guarantees
A User's Handbook to the Uniform Rules on Demand
Guarantees
Guide to the ICC Rules for Demand Guarantees
ICC Model Forms for Issuing Demand Guarantees
ICC Uniform Rules for Demand Guarantees
ISP98 - International Standby Practices
Other related subjects
Arbitration - Money Laundering, Corruption and Fraud
The Prevention of Money Laundering and Terrorist
Financing
Preventing Financial Instrument Fraud
The ICC Short Form Model Contracts
ICC Model International Sale Contract
Handbook of ICC Arbitration
A Guide to the ICC Rules of Arbitration
ICC Arbitration in Practice
Special Report on China Trade – The Risk Factor
Prime Bank Instrument Frauds
Guide to the Prevention of International Trade Fraud
Opinions of the ICC Banking Commission 98-99 Queries
& Responses
on UCP 500, 400, URC 522
Opinions of the ICC Banking Commission (1995-1996)
Unpublished Opinions of the ICC Banking Commission,
1995-2004
ICC Banking Commission Collected Opinions 1995-2001
This list of readings will only serve as a guide to
strengthening your knowledge in this field. It is not intended to scare you
off in taking a job as an LC practitioner. If everyone is really scared off
but YOU, then you are the only one who will sure enjoy the sweet fruits of
your great efforts. But it takes time and patience. Good luck to those who
are interested in this field but I will keep my fingers crossed..
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