The global economic crisis has made a dramatic increase in payment defaults and discrepancies, leading to disputes between international trading partners, said a leading chamber leader.

“The advent and continuing challenges of the financial crisis has seen a surge in defaulting which lead to rows between partners in international trade,” said Mahbubur Rahman, president of International Chamber of Commerce Bangladesh (ICCB).

Rahman yesterday spoke at the daylong workshop on international trade finance: cases-analysis and solutions, organised by ICCB.

He said the increase in risk has seen a surge in use of the traditional trade finance instruments such as commercial letters of credit (LC) and standby letters of credit by the parties.

According to the recently published global survey: Rethinking Trade Finance 2010 by the World Trade Organisation, 34 percent of respondents had seen an increase in refusals, 44 percent had seen an increase in claims under standby LCs, 23 percent (up from 12 percent in 2009) had experienced an increase in the number of court injunctions stopping payment under bank undertakings and 73 percent experienced increases in confirmations, he added.

The ICCB president said international trade injects global competitiveness, so the domestic business units tend to become efficient being exposed to international competition.

“There is an urgent need for advanced knowledge in documentary credit operations and management, and it is essential for the concerned to be proficient in the international trade finance,” Rahman said.

Mamun Rashid, chairman of ICCB standing committee on banking technique and practices, said presently more than 80 percent transactions are made through open-ended LCs. He hoped Bangladeshi exporters will be following the international practice promptly.

Vincent O-Brien, visiting expert who conducted the workshop, also spoke. A total of 109 participants from banks, financial institutions and export-oriented industries attended the workshop. The second workshop on the same topic will be held in Chittagong on March 10, where some 45 participants are expected to attend