Article

by Leo Cullen

Coastline Solutions, in partnership with ICC, has released a new online training course on URDG 758 entitled URDG Master.

The release of URDG Master completes a full suite of Coastline's online training in traditional trade products with courses now available in collections (URC 522), letters of credit (UCP 600), standby letters of credit (ISP98) as well as demand guarantees (URDG 758).

Online training suite - traditional trade products

Over 10,000 trainees from banks and companies worldwide have learned the basics of trade finance (Collections and Mentor 600) or continued their professional development learning best practice for the industry (UpSkill 600, DC Master and ISP Master) using this online training suite.

This latest course on the URDG 758, URDG Master, was released shortly after the effective date of the URDG rules (01 July 2010) to meet increased educational demand in this area and ensure global availability of ICC-approved structured training in the application of the rules.

This advanced training course is suitable for anyone wishing to master the operation of demand guarantees and the application of URDG 758 - including trade finance staff in banks, but also traders and lawyers (an existing understanding of international trade is required).

URDG training overview

URDG Master is written by Georges Affaki, Chair of the URDG 758 Drafting Group and Vice-Chair of the ICC Banking Commission, and Gary Collyer, Technical Adviser to the ICC Banking Commission. It includes 12 hours of online instruction and training in demand guarantee practice. Its aim is to ensure proficiency in the use and application of URDG 758.

The course is divided into four modules. The first two offer the core training - providing the trainee with a firm foundation in the life cycle of guarantees and counter-guarantees and outlining the scope of the URDG rules - before examining the specific application of the articles of URDG 758. The course is comprehensive and covers each of the 35 articles of the URDG in turn. Some key areas that the training examines include:

- Amendments to demand guarantees

Provision for amendments is a new addition in URDG 758. Inspiration was taken from UCP 600 with some fine tuning: accept, reject or do nothing - and the implications of each of these.

- Article 15 'Requirements for demand'

Contains probably the most contentious aspect of the URDG, the supporting statement. The course examines what is required of a demand under a URDG guarantee.

- Expiry provisions

Expiry of a URDG guarantee can be expressed using an expiry date or an expiry event. The rules also introduce a default expiry period that comes into effect where no expiry is stated.

- Governing law and jurisdiction provisions

Unique amongst the rules for traditional trade products, URDG 758 have specific provisions for governing law and jurisdiction.

- Counter-guarantees

Illustrates the life cycle of a counter-guarantee and reviews the contents of the sample form offered with the rules.

- Force majeure

What constitutes force majeure? There may be force majeure affecting presentation, examination or payment.

- Examination

There are two exceptions to the rule that the guarantor is concerned only with the documents presented to it. Both exceptions relate to the "guarantor's own records".

- Treatment of non-documentary conditions

Chief among the innovations in the URDG 758 is the one banning non-documentary conditions - again aligning the URDG 758 rules with UCP 600.

The remaining modules of the course offer the trainee a chance to practice what he has learned and put his knowledge of URDG and guarantees to the test through a series of case studies and assessments.

URDG Master uses interactive case studies to simulate real-life scenarios that allow trainees to hone their skills while learning best practice and rule application. The course assessment consists of a series of multiple-choice questions randomly selected from a database of questions. In each attempt at assessment, the trainee must answer 40 questions and, after each attempt, he receives full feedback on each question.

Delivery of the training

As the training is delivered online, it can be taken at any time and from any location with internet access. Each trainee receives a user name and password and access to the course for one year.

Every trainee studies the same ICC-approved material and receives the same message as written by Georges Affaki and Gary Collyer.

The training comes complete with its own Learning Management System (LMS). This allows training managers within banks/companies to allocate the training themselves and to monitor the progress of trainees. In this way, the LMS makes life easy to both manage and keep track of trainees and results, which is particularly convenient for global operations with branches in different countries and a centralized training function. Online delivery has the added benefit of keeping incidental costs, such as travel, accommodation, scheduling, printed materials, venue, time off work, etc., to a minimum.

On completion of the course, each trainee receives an ICC Certificate of Achievement that demonstrates he has successfully completed the training and indicates the highest score he achieved in the course assessment.

Leo Cullen is Head of Trade Products at Coastline Solutions. His e-mail is leo.cullen@coastlinesolutions.com. For more information on URDG Master and the other online trade finance training and information services offered by Coastline Solutions and free trials of the services, go to www.coastlinesolutions.com