Kim:

Please provide an introduction to your professional background - including when and why you started working with LCs.

Bogdan:

I studied Fine Arts, graphics. I worked in my domain for 12 years till 1992 when, in the middle of great changes that came after the great fake called Romanian revolution of 1989, I became unemployed. Looking for a new job I found one in a bank, Romanian Commercial Bank. I started working in protocol (you know, arranging business lunches and dinners, getting protocol tickets to theatre or opera or reservations for air flights). Then, someone in the bank asked me if I wanted to learn something new. I started at the collection department, and was there for almost one year. In December 1993, after a quick training at Bank of Cyprus in Nicosia, I moved to the export LC department where I am still working.

I really love my job because you never get bored. Is like a chess game, forcing you to think -  training your brain.

I had the luck of having a very professional boss willing to teach me everything about LCs from the very beginning.

The first day in the LC department I received a set of documents and the following instruction:

"Take the LC on one part, the documents - one by one –on the other part and compare the documents with themselves and with the terms and conditions of the LC. Use all the logic you have".

I checked them alone and then my boss called me to check the documents together with me.

After this she told me that checking is the desert; She treated me with the desert from the start. I think this helped me very much.

I started reading all the books I could find about LCs, trying to visualize (in practice) what I was reading. With small steps I learned as much as I could about LCs, day by day discovering something new; new questions, new disputes, new understandings.

Kim:

Which books did you read? Are there any one in particular that you wish to recommend? 

Bogdan:

One of them was The New ICC Guide to Documentary Credit Operations by Charles del Busto. Another one was UCP500. I don't remember the 3rd one. At that time (the '90s) it was almost impossible to find something written about LCs in Romania. Even now, after joining the EU, it is a little bit difficult to find books.

The help came from the internet. The problem is that you must have the capability to choose the "good stuff".

I had the luck to be sent by the bank to a training here in Romania, where Mr. Charles del Busto came to teach us (in 95 I think). I received the books from him. Also, my boss gave me a big set of ICC opinions. That helped me too.

Have in mind that before 1989 more than 95 % of the LCs were handled within the eastern wall. Words like negotiation, confirmation, financing facilities, factoring, forfeiting, etc, were just black words on white paper. (Try to imagine a soviet bank asking a Romanian bank (the only one existing!) to confirm or authorizing to negotiate! You were sending the documents praying for the receipt of funds from mother Russia). It was really frustrating to get the knowledge not having the possibility to apply it in practice.

On the other hand many of the exporters had no knowledge, whatsoever, about LCs. So I started explaining to the traders (exporters) how LCs work including the advantages they get using it. Many of them embraced the idea especially after finding out the facilities they get on getting a loan based on LCs.
 

Kim:

I imagine that you must have experienced many changed since living inside the "eastern wall". Can you explain some of the major changes you - as well as the trade finance banks have been going through since those days - from a trade finance perspective - that is?

Bogdan:

Before December 1989 the LCs and LGs were operated by only one bank (BRCE, after 1989 called BANCOREX). Only one bank were allowed to operate international trade.

At that time all Romanian banks were state owned. The only private or mixed banks were the overseas branches of foreign banks – a total number of 3 or 4.

There were no private companies at those times. None! All the Romanian exporters (and importers) were companies on state property and no businesses were engaged without the approval of the communist party, of secret services ("securitate") and of the ministries.

The market the Romanians were acting on was politically decided. Imagine an import LC where documents were discrepant but the communist party ordered the bank to accept the documents and pay for political reasons. Or vice-versa. 

After 1968, when Ceausescu became very popular for opposing the Russian invasion in Czechoslovakia, he became very welcomed in US and Western Europe, thus allowing Romania to increase its commercial and finance relationships with the Americas and almost all of Western Europe.

The Romanian trade with Western Europe was much below the level of trade with the US and South America. Also, Romania had a huge number of trade operations with China, Vietnam, North Korea, Cuba and African states (the so called brotherhood between 3rd class countries!).

Do not forget the trade with Eastern Europe countries within Warszawa Treat.
Nowadays the majority of trade operations are with Western Europe and China, and very few with the Americas and almost none with Africa.

After 1989 all the professional guys working in the BRCE and in National Bank of Romania (central bank) decided to set up commercial banks, other than BRCE. Some of them being totally private, some mixed and some state property. All the good guys that gained knowledge, business relationships and power for working in the state's export-import companies set up different private companies using their relationships with the West for their own companies. Beside them, many people with enough
courage to start their own businesses based on loans from the newly opened banks. Step by step all state companies have been closed/liquidated. Normally, the political aspect had a huge role in this process, various guys having their “dark interests”. 

Onassis once said (if I remember right) "never ask me about the first million". This would apply for many Onassis(es) and more than the first million.

Getting over this fishy start, we are now "proud" about the big number of banks and huge number of private companies, but things are still not working well;  political reasons, of course, but very different from those existing before 1989.

We hope to wake up soon and realize that now, being an EU member, we have huge responsibilities. 
   
At that time (before'89) I wasn't working in a bank. So I haven't been involved in bank activity at that time but my father did work in the central bank for 45 years.

Kim:

Wow - it is surely hard to imagine what kind of changes you and your country have been going through - well are going through!

I know that you are very active in seeking information from wherever you can find it – and by doing that you meet LC Specialists from many other countries than Romania: You are a common guest in the DC-Pro discussion forum (+150 posts) and you attend LC surveys. When it comes to the "practical understanding" of the LC instrument - do you see significant differences between LC specialists from Rumania and LC specialists from the Western part of Europe?
 

Bogdan:

I do not see any significant differences between LC specialists from Romania and those from western Europe.

In one country, with a great history in international trade, I once saw (to my surprise) that within the LC department each employee was only doing a specific part of the process, i.e. one was only checking the documents - another one was advising the LCs - yet another was advising amendments and so on. I asked them if this is they are doing "forever". They replied that they are rotating from 6 month to 6 month so that after 2 years (!) they would have seen everything within the LC department. In my bank we learn from the start to deal with every kind of operation starting with advising/issuing LCs ending with cashing the funds/paying the docments. That way we get the full picture from the start, and I think this is a positive way of dealing with LCs.

The luck of easy access to LC news walks hand in hand with a great willingness to learn.

Beside this, a great role is the sharing of knowledge. Here we share as much as possible and not only inside the bank but also with people working in other banks.

To end the answer, the differences are not about professional training but about applying the knowledge that we have in practice. I do not consider this a significant difference between LCs specialist but a significant one between Romanian and western banks policies.

Kim:

Thanks. Can you please explain that last part? What kind on policies? What differences do you see?

Bogdan:

I don't know if the word "policy" is the right one. Anyway, the main differences are:

• Underestimated role of LCs in international trade and lack of willingness to ”advertise” for the LC instrument;
   
• Not much interest in creating and developing the interaction between LCs and structured financing facilities based on LCs;
   
• The ”negotiation act” is not encouraged.

Kim:

Okay - coming back to your point about sharing knowledge. We have just been through a long period where the UCP was first revised - and after that "implemented". How was Romania - and for that matter your bank involved in this? Do you have a local ICC Committee? How does it work with you?

Bogdan:

Yes, we have a national ICC committee.

Beside the translation in Romanian of the UCP 600 and publishing the UCP both in English and Romanian, I sincerely don't feel any wind blowing from their part.

I know a number of LC specialists from various banks met to translate the UCP, but I did not see any official exchange of opinions, trainings or any other activity in this regard.

Each of us (the little ants) is self-training.

I know for sure that we, the ants, exchanged opinions on the changes made by the new UCP. Finally we all agreed that we would work it out; and we did, step by step.

Some people from my bank did attend some of the 2006 and 2007 ICC meetings and they shared the news with the rest of us, also bringing materials. We also have access to DC-PRO (not every bank have that). Furthermore there are very important overseas branches of first class western banks that have no access to DC-PRO!

Well, to resume, I have to confess that most of the time we are self-trained.

Kim:

Okay – last question: If there were one thing within the LC sphere that you could change just like that – what would it be?
 

Bogdan:

It is a hard question and it is difficult to answer because my answer would be subjective due to the fact I would automatically think of the changes I would do in my sphere (meaning the “LC Romanian little sphere”).

In the little sphere I'm working one could wish for many changes; starting with advertising, info-access and customer assistance and ending with negotiation.

[after some hours of thinking Bogdan returned with the following statement:]

Thinking again on your last question I would say I would like to change the mentality of those document checkers I call "discrepancies hunters".

I blame them for part of the reason why LCs are not as popular as they should be.

Kim:

I thank you for your time.