Foreign trade finance
Under trade finance (also: trade finance ; English trade finance ) are understood in banking , the financing of foreign trade of non-banks with the help of banks .
General
As an economic sector, foreign trade requires specific payment and financing instruments that distinguish it from other economic sectors. It takes place through cross-border trade and services and consists mainly of export and import , with the flow of goods or services to and from abroad also being countered by flows of money as consideration . The flows of money are also the subject of foreign trade finance. Because of the peculiarities - such as the physical distance of the foreign trade partners with long transport routes - special forms of processing have emerged . The resulting financing and security requirements come from the exporter or importer . Foreign trade finance can only be carried out by credit institutions because they have the specialist knowledge on the one hand and the necessary network of correspondent banks on the other . When it comes to foreign trade finance, the terms of delivery and payment agreed between the exporter and the importer are of crucial importance.
In the case of cross-border transactions , the geographical distance , language differences and different political , legal and economic systems make the assessment and credit check of the business partner difficult . In addition, an assessment of the country risk in the importer's country of residence must be carried out.
species
In the case of short-term foreign trade financing, a distinction is made between non-documentary ( English clean payment ) and documentary payment instruments. A non-documentary payment instrument in the context of foreign payment transactions is in particular the international transfer . Documentary payment instruments ( English documentary payment are) documentary collection and letter of credit , for the procurement of shipping documents is required. With these forms of payment, there is usually no credit transaction by credit institutions.
A loan is only granted for medium or long-term foreign trade financing. It consists of the sub-areas of export finance and import finance . Export financing as part of sales financing exists when credit institutions take over the financing of the export of goods and services . In addition to the temporal proximity, the factual connection between financing and export / import contract is required. The types of financing available are the supplier credit or a negotiation credit (for the exporter) and the buyer credit (importer) as well as the mobilization of export claims through factoring or forfaiting (exporter). This form of financing can also be long-term for the financing of durable export goods such as capital goods , but is short-term in the case of consumer goods . Of import financing is used when banks the foreign importer loans for the purchase of imported goods within the framework of international credit transactions provide. The return credit and the letter of credit are suitable for this .
Legal issues
Foreign trade finance is based on the free movement of goods and capital . Foreign trade finance itself is not a banking business in banking law , but rather the underlying subsectors lending business ( Section 1 (1) No. 2 KWG ), guarantee business (Section 1 (1) No. 8 KWG) or payment instruments (Section 1 (11) KWG). Factoring and forfaiting (Section 1 (1a) No. 9 KWG) are among the financial services . Foreign trade finance is handled by universal banks , but also by specialized banks (such as the former Deutsche Ueberseeische Bank and Deutsche Handelsbank ; Export-Import Bank of the United States ) or foreign banks . The International Credit and Trade Finance Association (ICTF) in Baltimore, founded in 2010, advises its members as a non-governmental organization on foreign trade finance .
particularities
Structured finance such as raw material trade finance can represent both export and import finance . In Islamic banking , there is a trade finance by a buyer of commodities ( commodities intermediary) Bank ( Arabic murabaha ) are also exceptionally involved which banks in the flow of goods. The country risk of exporters can be covered by export credit insurance for foreign trade financing .
meaning
Foreign trade finance plays a major role in countries with a high foreign trade quota ( export or import quota ). It helps exporters and importers in the coverage of supply and demand . In 2016, the euro zone exported goods worth 2047.8 billion euros to countries outside the zone and imported goods worth 1774 billion euros at the same time. For this, at least one foreign transfer (at the exporter as the payee or at the importer as the payer ) was required. According to a survey of 300 large European companies , the market shares in trade finance were highest at BNP Paribas at 32%, followed by Deutsche Bank (29%) and HSBC (27%). In Germany, Deutsche Bank's market share for large companies was 92%, so it is almost unrivaled in the foreign trade finance sector.
details
- ^ Wilhelm Christians, Financing Handbook , 1988, p. 373
- ^ Siegfried G. Häberle, Handbook of Foreign Trade Financing , 2002, p. 107
- ↑ Gerhard Diepen / Werner Sauter, Wirtschaftslehre für Bankkauffrau , 1991, p. 749
- ↑ Klaus Kuttner, Export Financing: Reference book for practice , 1992, p. 17
- ↑ Karlheinz Müssig / Josef Löffelholz, Bank-Lexikon: Concise dictionary for money, banking and stock exchange , 1998, Sp. 171 ff.
- ↑ Statista The Statistics Portal, European Union & Euro Zone: Export and Import 2016 , 2017
- ↑ Finance magazine of December 19, 2014, Trade Finance : These banks trust CFOs , accessed on July 2, 2017
