International trade finance and development in Vietnam

FINANCIAL UNIVERSITY UNDER THE GOVERNMENT

OF THE RUSSIAN FEDERATION

FACULTY OF INTERNATIONAL ECONOMIC RELATIONS ECONOMIC THEORY DEPARTMENT

PROJECT WORK

ON THE COURSE OF

“RESEARCH SEMINAR”

ON THE TOPIC:

« INTERNATIONAL TRADE FINANCE PROBLEMS AND DEVELOPMENT PROSPECTS IN VIETNAM

(PAYMENT METHOD L/C)»

Written by:

Moscow 2023

Contents

INTRODUCTION        3

I. Overview of international trade finance and L/C payment methods        5

1. The concept, characteristics and trade finance activities of payment methods L/C        5

1.1. Concept:        5

1.2. Characteristic:        5

2. International trade finance activities of L/C payment method:        9

2.1. For import:        9

2.2. For export:        10

3. Impact of payment methods on international trade finance activities L/C to the economy        12

3.1. International payments to the economy:        12

3.2. International payment for commercial banks:        12

II. The status of international trade finance activities of the LC payment        13

1. In the world:        13

2. In Vietnam:        14

2.1. The process of making payment by L/C method is as follows:        14

2.2. The main content of the L/C method:        15

2.3. Payment method by L/C method at Vietinbank:        17

III. OPPORTUNITIES AND CHALLENGES ON INTERNATIONAL TRADE SPONSOR ACTIVITIES OF L/C PAYMENT METHOD        18

1. Opportunity:        18

2. Challenge:        19

3. Risks occur:        19

IV. PROPOSED SOLUTIONS FOR DEVELOPMENT OF INTERNATIONAL TRADE SPONSORING METHOD OF L/C PAYMENT        21

1. General orientation of the State on import-export activities up to 2030:        21

3. Some solutions to expand international trade finance activities by L/C payment method:        22

3.1. Direct solution group:        22

3.2. Support solution group:        24

CONCLUSION        26

ABSTRACT

Payment method by L/C, a form of signal application that is fastest, simplest and relatively safe for exporters, currently accounts for 90% of goods trade turnover of 1000-14 trillion USD. in the limited world. However, many exporters are still not sure about the risks in some importing countries and the L/C issuing bank should require the importer to open a certified L/C from a third bank. . Today, international payment is becoming more and more important for Vietnamese commercial banks, is an important link to promote the development of other business activities of the bank, and also promotes and supports Export-Import business activities of developed enterprises. The study has generalized some parts of the L/C payment method in Vietnam's trade finance activities today. In addition, the research paper has pointed out challenges, difficulties and solutions for each problem.

INTRODUCTION

Trade finance in the field of import and export (referred to as trade finance) by Commercial Banks plays an important role in the modern economy. Trade finance not only supports capital but also provides import-export businesses with payment services; information on markets and partners; consulting, supporting businesses with customs procedures, insurance, freight... Besides, trade finance activities also bring significant benefits to banks.

Facing the trend of the world economy becoming increasingly internationalized, Vietnam's economy is developing in the direction of a market economy, opening up, cooperation and integration. In that context, international trade and investment activities emerged as a bridge connecting the domestic economy with the outside world economy. Only through international economic activities can we bring into play the country's potential and strengths, and at the same time take advantage of the capital and modern technology of developed countries to accelerate the process of industrialization, modernize the country, shorten the lag behind and bring our country's economy into integration with the economies of other countries in the region and the world.

To perform this bridging function, international banking operations such as: Import and export finance, foreign exchange business, bank guarantee in foreign trade, international payment, especially payment by L/C ...as an essential and increasingly important tool. Today, international payment is an increasingly important service for Vietnamese commercial banks, an important link in promoting the development of other business activities of the bank, and at the same time promoting and supporting Export - Import business activities of developed enterprises. International trade and payments is inherently more complex and risky than domestic trade and payments, because it is governed not only by local laws and customs but also by laws and customs. international. Therefore, stakeholders and participants in the process of International Trade and Payment need to have a thorough understanding of not only the technical and professional processes but also local and international practices, customs, and laws. 

The essay with the topic “international trade finance problems and development prospects”, we will study about one of the international payment methods being used quite commonly today - Documentary credit payment method – especially in the process of Vietnam's international trade finance activities abroad and vice versa with the goal of helping people understand, grasp and apply this method effectively. reasonable and accurate.

I. Overview of international trade finance and L/C payment methods

1. The concept, characteristics and trade finance activities of payment methods L/C