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