Innesa Amirbekyan: “EBRD contest was an exciting challenge for me.”
06.06.2014
For the second time Innesa Amirbekyan, the International Relations Manager of Converse Bank, has been recognized as the Gold Winner of the Trade Finance Clinic contest organised by Trade Exchange, the magazine of the European Bank for Reconstruction and Development (EBRD) covering the international trade finance issues.
Innesa Amirbekyan introduced Banks.am to the specifics of the contest, as well as touched on the current developments in the area of international trade finance.
- I would like to extend congratulations on your award on behalf of Banks.am. Please tell us about the purpose of the contest and the requirements participants had to meet. Also, what was your main motive for participation in the contest?
Thank you! First, let me note that to be eligible for participation one has to offer a precise and logical solution to the brain-teaser highlighted in each issue of the magazine during 1 year. The brain-teasers are based on the real cases from international banking practice and formulated by trade finance experts. Trade finance specialists of various banks worldwide are given an opportunity to demonstrate their competences in solving brain-teasers in the field of documentary letters of credit and bank guarantees, to provide their expert opinion and find precise and logical solution based on accurate interpretation of international banking standards and rules.
The 1st contest took place in 2012 and was unique and unprecedented. It was an exciting challenge for me to appear in the capacity of a trade finance expert and to offer unbiased and fair solution to a series of interesting documentary situations. I succeeded in finding accurate solution to all brain-teasers during one year and was awarded the Gold Winner prize. Being inspired by the first victory I participated in the subsequent contest in 2013 and once again won the highest award. In addition, I was given the opportunity to attend the one-week EBRD Trade Finance Workshop in Vienna.
I was very much pleased that one of my responses within the scope of 2013 Trade Finance Clinic was selected by the panel of adjudicators as a model answer and was published in the latest issue of Trade Exchange.
- In your opinion, how effective do the Armenian businessmen use the international trade finance instruments, and ultimately, how do these instruments help to streamline trade deals and facilitate risk management?
The traditional trade finance tools – letters of credits and bank guarantees – are really in good demand today since the Armenian businessmen are willing to minimise commercial risks and expenses.
In terms of cost, trade finance is much more beneficial than standard lending. Depending on the structure of the deal, the gains can be essential. At the same time, trade finance instruments considerably reduce the existing international trade risks for both the buyers and the sellers. Letters of credit and guarantees are the financial liabilities of the bank, governed by the ICC (International Chamber of Commerce) specific uniform rules.
For instance, by issuing a letter of credit the buyer gets the possibility to control the quantity and quality of the imported goods. Payment under the letter of credit can be made only against presentation of duly executed documents reflecting the buyer’s requirements (quantity, quality, cargo insurance, delivery dates, packaging, transportation, etc.). Furthermore, the seller, by obtaining the letter of credit, is confident that it will receive the respective payment in due time against the delivered goods or services.
We know from experience that the Armenian companies involved in international trade, specifically the SMEs, are for the most part not aware that trade finance instruments are designed to reduce commercial risks and to simplify payment processes. They rather apply to banks for traditional loans.
- Are there any innovations in terms of raising the level of awareness in the field?
We prioritise the strengthening of financial literacy among our customers. Any innovation in this area can be cosidered successful only if it promotes positive changes and helps to find adequate solutions and apply them in the future. From that perspective, e-learning courses are most effective since they are accessible anytime and anywhere.
Lately, due to the special Introduction to Trade Finance e-learning course developed by the EBRD, Converse Bank has an opportunity to offer online training to its customers. This course is designed for distance learning of international trade finance instruments. During the short e-learning course the users can learn about the main forms of international settlements, understand the advantages and convenience of the use of the documentary credits, obtain information on the details of use of guarantees, as well as get acquainted with main documents and Incoterms 2010.
- I would like to take the chance and ask you to tell us about Converse Bank operations and recent developments related to international trade finance.
At present Converse Bank has plans for substantial expansion of financing foreign trade. Our goal is to promote both import and export businesses through international trade finance instruments and targeted financing.
Importantly, Converse Bank has recently recorded steady growth rate in trade finance sector. In 1Q 2014, the letter of credit and bank guarantee portfolio tripled as opposed to the same period in 2013. The transactions geography has expanded as well mainly due to the cooperation with the EBRD within the scope of its Trade Facilitation Programme. I would like to state that Converse Bank has been participating in the EBRD’s Trade Facilitation Programme since 2009.
Considering the significance of support by foreign and international financial institutions in foreign trade industry and the advantages of external borrowings, we continuously develop business contacts with the leading foreign banks and international financial organisations. To facilitate its trade finance operations Converse Bank has received credit lines from several leading banks and credit organisations, such as UniCredit Group, Commerzbank AG, Atlantic Forfaitierung AG and the like.
To strengthen its position in the increasingly competitive international financial market, Converse Bank develops and improves its services offered to customers in the area of international trade finance and designs new trade finance products. Our policy is to offer comprehensive advice and support to our customers on trade finance instruments. Our specialists, due to their extensive experience and professional competence, assist the customers in negotiations with partners, help them develop payment clauses of trade contracts and select optimal settlement schemes, thus protecting the customer interests.