BAFT, The Wolfsberg Group, and the International Chamber of Commerce (ICC) jointly announced today the publication of appendices to its 2017 Trade Finance Principles guidance document. The document addresses the due diligence required by global and regional financial institutions of all sizes in the financing of international trade and will now feature information on open account trade and financial institutions’ trade loans.
The appendices provide guidance on the specific application of controls by banks in the context of open account trade transactions and specifically elaborate on receivables purchase techniques as defined by the Global Supply Chain Finance Forum. They also provide guidance on the application of controls by banks in the context of Financial Institutions Trade Loans (FITL), also called Bank-to-Bank Trade Loans.
The publication of this additional guidance is the culmination of more than two years of work undertaken by the organizations and their members.
“The trade industry has been clamoring for more specific guidance on articulating controls for open account trade products,” said Tod Burwell, president and CEO, BAFT. “Finally, a resource has been developed by the leading industry associations working together to provide guidance on payables finance, receivables discounting and bank to bank trade loan products.”
"The trade finance market is rapidly evolving, which means that rules and guidance need to not only keep pace but also anticipate future changes," Olivier Paul, director of ICC finance for development. "This new update of the Trade Finance Principles does exactly that — providing critical guidance on Open Account and Receivables techniques."
“In the two years since BAFT, the ICC and the Wolfsberg Group published their last update to the Trade Finance Principles, the working group has not lessened its efforts or enthusiasm, producing very welcome additional guidance on open account trade and the financing of international trade more broadly,” said Tracy Paradise, executive secretary, the Wolfsberg Group. “We trust that those involved in these transactions will find this useful, particularly all aspects of the controls required in this area.”
More info: https://www.wolfsberg-principles.com/articles/international-trade-organizations-release-additional-compliance-guidance-trade-transactions