Core Insights - The article emphasizes the importance of international settlement in trade, particularly focusing on the practical operations and risk management of letter of credit (L/C) settlements in Shenzhen's foreign trade sector [3][10]. Group 1: Importance of International Settlement - International settlement is a critical component of international trade, directly affecting the security of trade funds, contract fulfillment, and the establishment of corporate international credibility [3]. - Shenzhen, as a major hub for foreign trade and an opening window for international commerce, requires a robust understanding of international settlement mechanisms, especially the complex letter of credit [3][4]. Group 2: Risks in Letter of Credit Operations - The primary risks associated with letter of credit operations include discrepancies in document submission, fraud and false documentation, bank operational risks, and human errors [4][5]. - Companies must establish a systematic document management system and enhance team expertise to effectively manage these risks and maintain control in letter of credit transactions [4]. Group 3: Benefits of Using Letters of Credit - Utilizing letters of credit can enhance transaction security by mitigating trust issues between buyers and sellers, thus reducing the risk of non-delivery [5]. - Proper settlement tools and financing arrangements can optimize cash flow and support business expansion [5]. - Letters of credit can help mitigate exchange rate and policy risks, providing clarity on responsibilities and reducing disputes arising from differing trade policies [5]. Group 4: Training and Capacity Building - Companies are encouraged to engage in systematic training to improve their understanding and operational capabilities regarding letter of credit processes and risk management [7][10]. - Key training areas include understanding the credit system, mastering operational points, strengthening risk control, and effectively utilizing financing tools [7][10]. - Familiarity with international rules such as UCP600 and ISBP745 is essential for companies to avoid errors in document formats, content, and submission deadlines [8]. Group 5: Conclusion - The article concludes that despite the complexity and specialization of letter of credit operations, they remain a vital tool for ensuring the safety of international trade [10]. - Shenzhen's foreign trade enterprises should proactively adapt to international regulations and enhance their letter of credit operational capabilities as a core skill for foreign trade [10].