Home from Dubai- hopeful and tired


Dear all,

 

It has been quite some time. It has been busy times. A main focus of mine has been developing the lcviews premium site. It is soon ready - and I am eager to introduce it to you. I will revert on this soonest - so please look out for it.

 

In any case - the purpose of this blog post is to offer my personal report from the ICC Banking Commission meeting - which was held in Dubai last week.

 

For starters it is a pleasure taking part in these meetings in Dubai is a real pleasure.

 

Just look at these pictures:

 

https://www.facebook.com/permalink.php?story_fbid623122044436741&id226292130786403&stream_ref10

 

The front part of the building is one huge banner for the ICC Banking Commission meeting. That is indeed impressive.

 

The meeting in the ICC Banking Commission in Dubai had a record number of enlisted participants I.e. 421 (fair to say that at no point were there 400 people in the room). 


The meeting was one and a half day.

 

The structure of the meetings will change going forward. The idea is still to have two meetings each year. One similar to the meetings right now (Annual meeting); I.e. Big and open meeting - with a full agenda - lasting for around one week. One "technical meeting" - which will be around 2 days. The participants to these meetings will be the ones that participate in working groups and projects - as well as those discussing the ICC Opinions. 

In addition the ICC plan to introduce a fee to participate. The purpose of the fee is to cover the administrative costs.

 

Here are the overall “features” of the 2 meetings:

 

Annual meeting:

When: Spring

# Participants: Open to all (+400)

# Days: 2

Fee: EUR 200-400

 

Technical meeting:

When: Fall

# Participants: 150-200 (members of working groups, task force meetings and members discussing Opinions)

# Days: 4-5

Fee: None


As such it makes sense evaluating the form of the meetings – and it will be interesting to see the above in effect. I guess there are a couple of challenges that the above does not address:

 

* The ICC Banking Commission seek constantly to “increase” their range, and one person cannot grasp all of the topics on the meeting. So for example a bank that want to be there for the whole of the Annual meetings – will (still) have to send more than 1 person to go there.

 

* It seems that for a number of the topics addressed, there frankly are very few “takeaways” – a lot of words – very high level, and only rarely touches upon something specific.

 

* For the ICC opinions (which to me still is the most valuable session) it sounds as if the members will differ from time to time. This of course is risky – as one want to maintain a steady and firm line in the answers given.

 

In any case let’s see how things will work out.

 

 

One issue that caught a lot of attention was the issue of compliance. A couple of new acronyms were introduced:

 

GFC - Global Financial Crime

GFCC - Global Financial Crime Compliance

 

The challenges around compliance were addressed, as well as the need for a standardised approach was expressed. In that respect it was mentioned (not surprisingly - given the event) that the involvement of the ICC are crucial in that respect. Neil Chantry (who is chair of the ICC Compliance group) mentioned that a co-operation between the Woldsberg Group and the ICC Banking Commission has been initiated. The idea is to revise the Wolfsberg Principles on Trade Finance - and publish those jointly.

That is indeed a welcome approach. There is no doubt that it is important for the Trade Finance community to assume responsibility within this area. Till now it has mainly been driven by the regulators - as well as the compliance departments in the banks. The result of this naturally is a number of misunderstandings - which has resulted in a "fear" for Trade Finance instruments - not necessarily based upon an evaluation of the real risk involved.

 

Compliance:

 

A panel lead by Neil Chantry discussed the challenging topic of compliance. Some of the takeaways were:

 

* One need to distinguish between client and transaction

* Compliance must be closely linked to the daily business

* Open account versus trade products; what information must be available.

(in open account cases - it is rare that the underlying documentation is available for the bank)

* From e.g. FATAF 40 there is a build in "risk based approach" - which often is lost in translation by the regulators; I.e. The express a black and white approach.

 

In all the panel underlined the fact that within the area of compliance in terms of trade finance is in the middle of a huge paradigm shift. A couple of years back compliance were equal to "sanctions;" and the biggest challenge were the so-called "sanctions clauses" that some banks included into their transactions. Today "compliance" is a lot more than that - such as KYC, AML, CTF, Dual use Goods, fraud - and even bribery and corruption.


So at least the perception of what trade finance compliance is - is moving.


What the panel also revealed is that we need a better way to discuss all of these issues. To me the discussion - which had many good points - were very "muddy" - and not at all specific. My best guess is that the discussion left a great number of the participants more confused about what they should do about these issues.


A more structured - and specific approach is badly required!


Here is a picture from the "compliance panel:"


https://www.facebook.com/226292130786403/photos/a.247197202029229.58125.226292130786403/623121241103488/?type1&stream_ref10

 

Another interesting panel was the one on the DOCDEX revision (I was a part of that one :-) …. Interesting because it was indented that a vote was to take place in Dubai about the revised rules. Due to some strong comments from “central” National Committees – the voting has been postponed – and is expected to take place at the next meeting beginning November.

The basis for comments is the idea to expand the scope of the DOCDEX rules. Today only transactions subject to certain ICC rules can be accepted under the DOCDEX regime. The ICC want to change that so that for example a demand guarantee NOT subject to URDG 758 can be handled by a DOCDEX panel. Personally I am fine with that – given that cases are evaluated carefully before being accepted (which is addressed in the revised rules), and that the Select^^ion of experts are improved (which is also being addressed). In any case – it will be interesting to follow this and see the outcome of it all.

 

Last but not least: The Opinions. Again that attracted a good deal of attention. I will revert on the Opinions in a later Blog post.

 

Dubai was hot and good – but I must admit that I left the ICC Banking Commission meeting a bit “unfulfilled.” There simply were too much of the content that I did not really care about. And the content I did care about – did not really give the value I had hoped for. Perhaps it is the Select^^ions of the panellists, perhaps it is the managing of the panels, perhaps it is the big armchairs – and the low endless discussions … I do not know – but the most of the time I found myself loosing interest.

 

I hope the new form will create new energy …. We need it!

 

All for now & take care of each other and the LC.

 

Best regards

Kim



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