BAFT Publishes Joint Paper Covering Digital Rapid Response Measures Taken By Banks Under COVID-19

April 23, 2020 by Jessica Moore

In a global emergency, international trade may slow but it must not stop. Even as COVID-19 reveals the shortcomings of a paper-based trade system, financial institutions (FIs) are finding ways to keep trade circulating. How are they doing it? Read this joint paper published on April 23, 2020 from BAFT, the ICC and the ITFA entitled ‘How Banks Are Going Digital To Manage COVID-19’.

This paper, jointly published with the ICC and the ITFA, collates common practices undertaken by global banks in the COVID-19 emergency situation and shares some guidance. This is not a “best practices” document and many of the practices described are being improved already. Rather it is a practical reference document with information about measures put in place to continue the flow of trade and trade finance when paper transfer has become difficult or impossible.

The COVID-19 pandemic has disrupted shipping, in-person interactions, and travel. As such, alternative procedures are required to settle trade finance transactions. Data is sourced from 2020 data from ICC, ITFA and BAFT members.

This brief shares the ad hoc practices being implemented by FIs under the COVID-19 pandemic. Their approaches are different from every previous global crisis in that responses target the singular problem of how to keep trade flowing when physical interactions are impracticable. The document makes clear that these quasi-digital solutions are interim only until actual e-enabled digitized solutions are fully developed.

Read the full paper from the ICC Digitalisation Working Group in the Library of Documents page under White Papers.

April 21, 2020 by Jessica Moore

On April 14, 2020 BAFT along with the ITFA, the Berne Union, the IACPM, the IUA and Lloyd’s Market Association filed a joint comment letter to policy makers in the European Union regarding the ongoing discussion about facilitating bank lending and the role of credit insurance amid the COVID-19 crisis.

The International Trade and Forfaiting Association (ITFA), the Bankers Association for Finance and Trade (BAFT), the Berne Union, the International Association of Credit Portfolio Managers (IACPM), the International Underwriting Association (IUA) and Lloyd’s Market Association (LMA) follow with great interest and appreciate the ongoing discussion of the policymakers in the European Union about facilitating bank lending amid the COVID-19 crisis. The aforementioned industry representatives believe that when it comes to credit insurance and guarantees, public and private sectors are inextricably connected through their respective complementary roles.

We welcome the initiatives to reconsider the provisioning requirements for loans covered by Export Credit Agencies and other publicly guaranteed loans. This will be a very helpful measure to enable banks to continue the flow of much needed trade finance.

We wish to highlight that the private credit insurance market also provides important support to economic activity within Europe through facilitating bank lending in the same way as public sector Export Credit Agencies. Like Export Credit Agency cover, private credit insurance support a wide range of short, medium and long-term bank lending, including trade-related, asset-backed and corporate loans, for activities across the entire European Union and worldwide.

Read the full Comment Letter in the Library of Documents page under Comment Letters.

April 1, 2020 by Jessica Moore

BAFT issued comments in response to the ARRC Consultation on Spread Adjustment Methodologies for Fallbacks in Cash Products Referencing USD LIBOR.

On March 25, 2020, BAFT issued comments in response to the ARRC Consultation on Spread Adjustment Methodologies for Fallbacks in Cash Products Referencing USD LIBOR. In addition to responding to the consultation, BAFT made the case that the lack of a forward looking SOFR term reference rate presents operational challenges for this business line and encouraged the ARRC to develop a working group focused on trade finance to address issues specific to this subset of the industry. The comments are posted on the Library of Documents page under Comment Letters.

March 20, 2020 by Jessica Moore

We have chosen to postpone our planned North America Annual Meeting, scheduled for May 3-6, and our Regional Bank Conference, scheduled for June 15-16. Both conferences will be rescheduled for November 2020 and consolidated with the 30th Annual Conference on International Trade.

To help stop the spread of the coronavirus (COVID-19), BAFT is following the Center for Disease Control’s guidance and recommendations. We have chosen to postpone our planned North America Annual Meeting, scheduled for May 3-6, and our Regional Bank Conference, scheduled for June 15-16. The health and well-being of our members, conference attendees, speakers, sponsors and employees is a top priority for BAFT and we believe this is the best way to ensure their safety at this time.

Both conferences will be rescheduled for November 2020 and consolidated with the 30th Annual Conference on International Trade. We are working closely with BAFT’s Board of Directors and the various Conference Planning Committees to deliver these programs in unison to maximize the value for attendees, speakers and sponsors. We will be in touch with the specific dates and hotel location once they are available.

We would like to thank the relevant committees and individuals who have dedicated their time and resources thus far to helping plan these events, and we remain committed to delivering these programs when it is safe and practical to do so.

We look forward to welcoming you later this year as your continued support is paramount to our joint success.

If you have any questions, please contact us at [email protected]. We appreciate your understanding, and we apologize for any inconvenience this may have caused.

March 5, 2020 by Jessica Moore

Due to growing concerns around the coronavirus (COVID-19) and subsequent travel restrictions, BAFT has rescheduled its upcoming 2020 MENA Bank to Bank Forum from March 18-19 to September 1-2.

In light of the growing concerns around the coronavirus (COVID-19) and subsequent regional travel restrictions, BAFT has decided to postpone its upcoming Middle East and North Africa (MENA) Bank to Bank Forum scheduled for March 18-19, as well as the Master Participation Agreement (MPA) Pre-Conference Workshop on March 17, both to be held in Dubai, UAE. The health and well-being of our members, conference attendees, speakers, sponsors and employees is a top priority for BAFT and we believe this is the best way to ensure their safety at this time.

We have rescheduled the MENA Bank to Bank Forum for September 1-2, while the MPA Pre-Conference Workshop is now scheduled for the afternoon of August 31, both in Dubai. All registrations will be transferred accordingly. If you are no longer able to attend the meeting due to the date change, please contact [email protected].

Currently, all other BAFT conferences remain on schedule and unchanged. Our staff experts will continue to track developments regarding the coronavirus in close coordination with public health officials. We will update you should there be any additional changes to BAFT’s conference schedule. Attendees with questions should feel free to reach out to the BAFT events team directly at [email protected].

We appreciate your understanding.

February 26, 2020 by Jessica Moore

BAFT recently updated its chart of information required by over 50 jurisdictions for the processing of both inbound and outbound USD wire transfers.

BAFT first issued the chart in 2016 as an appendix to the paper entitled Practices and Guidance for Formatting Payments and Handling Inquiries Related to the Financial Action Task Force (FATF) Recommendation 16.

A group of experts on large-value, cross-border payments sitting on BAFT’s Payments Committee brought the information in the chart up to date through end of calendar year 2019. Samantha Pelosi, Senior Vice President for Payments & Innovation at BAFT remarked that, “We are happy to provide this invaluable resource to the correspondent banking community again this year.”

The chart available to BAFT members at no charge and to non-members for a nominal fee. It can be found on the BAFT website in the Library of Documents, under “Best Practices and Industry Standards”.

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