1. ICC Banking Commission ICC Rules and Tools for the Trade Finance Industry David Bischof Banking Commission International Chamber of Commerce Minsk, 19 March 2015

2. ICC – THE WORLD BUSINESS ORGANIZATION ICC has hundreds of thousands of members in 130 countries:  Companies of all sizes and from all sectors  Chambers of commerce, national and local  Business associations  Privileged partner of intergovernmental bodies UN, WTO, G20, MDBs ICC is the world business organization: It’s mission is to promote cross-border trade and investment

3. The ICC Banking Commission A leading and trusted rule-making body for banking and trade finance Rules & Guidelines Market Intelligence PolicyDispute Resolution + Training & Certification

4. Reach and Global Network A truly representative global forum More than 600 institutional members spread over + 100 countries

5. LEADING GLOBAL RULE-MAKING BODY The ICC Banking Commission is continuously enriching its portfolio of trade facilitation rules  Traditional rule-making activities: UCP, URDG, Collections, ISBP  New service line: Open Account & Supply Chain Financing Traditional TF Rules New Set of Rules

6. Our Market Intelligence Products ICC Trade Register ICC Global Survey ICC/IMF Market Snapshot Measuring Global Risks in Trade Finance Markets Measuring Performance and Shifts in Trade Finance Markets Snapshot of the Current Status of Trade Finance Markets ICC Market Intelligence Products help leaders make informed decisions on World Trade Finance

7. TRADE FINANCE GAPS Regulatory constraints ICC Surveys have previously shown KYC issues can complicate or prevent trade deals. This year’s survey reinforces that view, as 66% said KYC hampers the well-functioning of trade finance transactions To make matters worse, 35% of respondents considered closing correspondent relationships due to rising compliance costs 51% said complying with sanctions restricted trade finance operations to a greater extent than in previous years. 65% said implementation of Basel III is to some extent or to a large extent affecting the cost and liquidity for trade finance.

8. Background and purpose 1.Present the global trade finance industry’s perspectives on risks in trade finance  First ever quantitative analysis of Trade & Export Finance  Establishment of representative data set (+15M trans.) 2.Increase understanding of trade finance instruments amongst industry participants 3.Promote understanding of international regulations affecting bank capital, liquidity and leverage requirements THE ICC TRADE REGISTER

9. 25 banks have provided data on more than 15 million short-term trade finance transactions globally. 9 banks have provided data on 15,000 transaction-years for medium and long-term export finance, covering 2006 - 2011 THE ICC TRADE REGISTER

10. The data provide a strong evidence that short-term trade finance products have a low likelihood of default. THE ICC TRADE REGISTER: SHORT-TERM Transaction numbers and default levels by product, 2008 - 2012

11. SHORT-TERM TRADE FINANCE (TF) - CUSTOMER AND TRANSACTION DEFAULT RATE Low default rate across all products at Transaction level Transactions1,250,903828,537494,1171,980,642 Transaction Defaults42336131850

12. SHORT-TERM TRADE FINANCE (TF) - CUSTOMER AND TRANSACTION DEFAULT RATE Low default rate across all products at Customer level Customers36,79729,09840,16734,851 Customer Defaults12346384

13. THE ICC TRADE REGISTER We observe an average maturity of less then 100 days across products Average reported maturity by Product

14. Medium Long Term Trade Finance Similarly relative low risk observed for MLT transactions Default rates by asset class, 2006 - 2012

15. MLT DEFAULT RATE BY REGION Customers1,0131,5039923,2191,7001,5196516938,081 Customer Defaults 571135231225084 The Iran sanctions is reflected in the fact that Middle East is the region with the highest customer default

16. MLT CUSTOMER DEFAULT RATE BY ASSET CLASS The exposure-weighted customer default rate is 0.35%; FI’s have a higher default

17. ICC Academy launch 18 March 2015

18. The curriculum

19. The membership

24. Specialized Trainings and Events 20-23 APRIL 2015 -ICC Banking Commission Annual Meeting 16-18 NOVEMBER 2015 -ICC Banking Commission Technical Meeting SEPTEMBER 2015 - Supply Chain Finance Summit

25. Thank you! ICC Banking Commission The leading and trusted authority for trade finance David Bischof, dbf@iccwbo.orgdbf@iccwbo.org