ICC Opinions – facts and impressions
DISCLAIMER: In the following I address parts of the ICC Opinions process. Being part of the Technical Advisor team, I am of course not a neutral part. I have strived to do the below as objective and fact based as possible. For the facts mentioned I have consulted a contact deeply involved in ICC work. Still, the views expressed are my own.
For me it is vacation time and I wanted to write a short, loose, and “summer’ish” blog post. However, this one will not be it; I am sorry to say.
A bit of background: Since the ICC have changed the frequency of the Opinions sessions to 4 per year, I have tried to present a closer look into each of the new Opinions – primarily for those who do not have access to the ICC Opinions.
When doing that, I am always surprised about the comments those attract on social media. There are some (thankfully not all) that seem to want to discuss – or express views on – the ICC Opinions and the ICC more broadly. At the outset I have no problem with that; although I generally do not like it when the discussion takes a turn that removes it from the original post. However, and more importantly, recently I have seen comments which target the ICC Opinions process, and which have severe factual mistakes. They seem to stem from outdated information and based on “impressions”.
Those simply call for a reaction. As mentioned, my primary target group for those posts are those who do not have access to the ICC Opinions. Those would unfortunately not be able to evaluate if a comment is correct or not.
So here goes!
COMMENT 1:
There was a comment to the effect that it would have been better to ask the question to a LinkedIn group because it takes months to get an Opinion from the ICC.
To start from the last statement first. How long time does it actually take to get an Opinion from the ICC?
To answer that question, it is important to understand that the person raising the question (called query) actually gets two answers:
First a Draft Opinion that reflects the view of the ICC Technical Advisors.
Second the Final Opinion that is the Official Opinion of the ICC Banking Commission.
The first answer is given as soon as it is drafted by the ICC Technical Advisors. The last one I know of took 3 working days. The previous took 3 weeks. The time it takes depends on the actual circumstances. There may be a need to revert with questions for clarification. Some queries are complex and just take time to discuss and analyze. For some there may be a timing issue. For example, the one that took 3 weeks arrived just around an ICC Meeting where the focus of the Technical Advisors was on the presentation of the Draft Opinions and revising those as agreed at the meeting. For guarantee queries the ICC guarantee task force is normally involved.
However, for most queries, the time to get a Draft Opinion from the ICC Technical Advisors is around one week.
The second answer is given after the ICC Banking Commission have met to agree and approve the Draft Opinions. There are 4 meetings each year – so in general it can take up to 3 months to get an Official ICC Opinion approved by the ICC Banking Commission.
For the second part that it would have been better to ask the question in a LinkedIn group (as that would enable a much faster answer):
I am not sure it really makes sense to compare a LinkedIn group to the ICC system on Opinions. However, for the purpose of this blog post, let’s do that.
First question to ask is why the query is raised to the ICC. In the case that took 3 weeks the query was raised by a beneficiary who was discussing with its bank. In such case, it seems reasonable to assume that the beneficiary would have more value from a Draft ICC Opinion than (random) replies from a discussion forum on social media. In other cases, ICC Opinions are sought to evaluate if litigation should be initiated or to help solve disputes between two banks. On such case, an ICC Opinion – even in Draft form may be valuable.
Likewise, there are situations where it makes sense to raise discussions on social media and taking part in these discussions help sharpen your arguments and ability to discuss in writing.
My personal experience with that is that you will normally get a variety of answers and views. Those may not all be correct, and you really need to keep your tongue straight and carefully evaluate each reply with a critical mind. And as mentioned in the beginning, these discussions tend to take a turn that is far from the original post.
In essence,
* Each reply on social media represents the person that has given it.
* Draft ICC Opinions represent the view of the ICC Technical Advisors, and the
* Final ICC Opinions represent the views of the ICC Banking Commission – and is thereafter part of international standard banking practice.
COMMENT 2:
Then there is the comment that the Official ICC Opinions does not reflect the opinion of the ICC Banking Commission. The comment is that not all National Committees can vote. In addition, not all members of the Banking Commission have a say in their National Committee.
For the ICC Opinions there is a transparent process. It is described in the “ICC Official Opinion Handling Procedure and Terms of Reference” *).
Some highlights from that:
* Requests for Official Opinions are channeled to the ICC Banking Commission Secretariat (the Secretariat) via an ICC National Committee.
* Prior to each Commission meeting the Secretariat will email a consolidation of all draft Opinions to all ICC National Committees and members of the Banking Commission for review 8 weeks prior to the concerned Banking Commission meeting
* Any comments raised by ICC National Committees (not individual members) must be received by the Secretariat and the Technical Advisors by email no later than 2 weeks prior to the Commission meeting. ICC National Committees are required to schedule their local meetings accordingly.
* The absence of any comments from an ICC National Committee will be considered to be an abstention from the process
* An ICC National Committee wishing to address any comments relating to a Draft Opinion at a Banking Commission meeting must designate one representative to outline any viewpoint(s) of that ICC National Committee.
* Upon approval at the Commission meeting, the Draft Opinion becomes an Official ICC Banking Commission Opinion.
As can be seen from the above, all ICC National Committees have a right to comment on the circulated Draft Opinions – and to verbally comment at the meetings. As such one National Committee has “one voice” meaning that only the designated representative may outline the view of the National Committee.
The obvious background for this is that it would be impossible to manage if one National Committee expressed different views. In other words, every National Committee must agree on their common view.
This also means that any Banking Commission member who would like to express comments to the Draft Opinions must seek influence via their National Committee. As such the basic premise is that a member of the ICC Banking Commission is appointed by the National Committee. Without the National Committee nomination, you have no voice.
COMMENT 3:
Then there is the comment that the ICC Opinions do not reflect international standard banking practice, because of the low percentage of National Committees commenting.
As far as I have been able to find out there are 90 National ICC Committees **).
Here are the number of National Committee that have commented on the Draft Opinions from previous 4 meetings:
October 2021: 33
January 2022: (no Draft Opinions hence no comments)
April 2022: 38
July 2022: 30
In average 33. A simple calculation shows that approx. 36% of the National Committees comment on the Draft Opinions – and 64% do not.
First, it is important to repeat that 1) all ICC National Committees have a right to comment on the circulated Draft Opinions and 2) the absence of any comments from an ICC NC will be considered to be an abstention from the process.
So, if a National Committee chooses not to comment it is their own choice. Of course, there may be different reasons why a National Committee chooses not to comment. It could be that they agree to the Draft Opinions, or it could be that they do not have a local set-up to do so. Or something third. In any case, this is their own choice.
In that respect, it should also be mentioned that for most of the Opinions there is general agreement regarding the Conclusion between the National Committees that do comment. The majority of comments target the Analysis. Very few National Committees fully disagree with the conclusion.
Let’s look at the same meetings as above:
October 2021:
TA915: 33 NC’s agree with conclusion (13 with added comments)
TA916: 33 NC’s agree with conclusion (6 with added comments)
TA917: 29 NC’s agree with conclusion (13 with added comments) 4 NC’s disagree
TA918: 33 NC’s agree with conclusion (11 with added comments)
TA919: 29 NC’s agree with conclusion (15 with added comments) 4 NC’s disagree
TA920: 32 NC’s agree with conclusion (13 with added comments) 1 NC disagrees
April 2022:
TA922 was withdrawn
TA923: 37 NC’s agree with conclusion (5 with added comments) 1 NC disagrees
TA924: 32 NC’s agree with conclusion (4 with added comments) 1 NC partially agrees, 5 NC’s disagree
July 2022:
TA925: 30 NC’s agree with conclusion (14 with added comments)
In other words, for the vast majority of ICC Opinions the core conclusion is not changed by the National Committees comments. Rather, the arguments in the Analysis are refined.
On that basis it is likely to assume that even if more National Committees were to comment, the conclusion would not change in any material way.
COMMENT 4:
There also is a comment that the ICC does not reveal how many National Committee that have offered comments to the Draft Opinions.
Prior to each meeting, all National Committees and Members are provided with the presentation to be given at the meeting – prepared by the team of Technical Advisors. That presentation usually consists of:
* Number of National Committees that have submitted comments
* Which National Committee that has submitted comments.
* Number of comments received for each Draft Opinion.
* Number of National Committees that agree and disagree with each Draft Opinion.
* EVERY comment made per opinion – with a response from the team of Technical Advisors.
* Suggested changes to Analysis and Conclusion.
With the above, I have tried to offer insights into the ICC Opinions process allowing you to consider it for yourself – based on facts.
Whatever you do, please take care of yourself and the LC.
Kind regards
Kim
*) Link: https://www.tradefinance.training/library/files/Opinion%20Handling%20Procedure%20and%20TORs%20.pdf
**) Source: https://iccwbo.org/about-us/global-network/regional-offices/#1483450357865-bd7fcc61-1ec2