Current Issues


We serve as the industry’s voice before multilateral agencies, export credit agencies, finance ministries, central banks and legislative bodies. We collaborate around the world with other industry groups and trade associations. As a member of BAFT, we represent you in continually striving to:

  • develop international standards such as the “Master Participation Agreement” for trade risk
  • support the “national treatment” of financial firms in the markets where they do business
  • promote the harmonization of financial services regulation and supervision between countries
  • coordinate with private and public sector stakeholders to ensure that governments, multilateral agencies, and leading policymakers around the globe have substantive feedback and reliable data on market dislocations and industry trends
  • Advocate for the positive consideration of trade finance and transaction banking under the Basel capital and liquidity framework
  • Use common Trade Finance Definitions to standardize industry/regulatory terminology and facilitate prioritization of trade risk in sovereign events
  • Ensure the continuation of benefits afforded companies via ECA financing

Policy News

  • International Trade Organizations release compliance guidance for Trade

    by Patrick Devilbiss | Jan 24, 2017

    International Trade Organizations Release Compliance Guidance for Trade Transactions

    WASHINGTON – The Wolfsberg Group, The Banking Commission of the International Chamber of Commerce (ICC) and BAFT jointly announce today the publication of The Wolfsberg Group, ICC and BAFT Trade Finance Principles. The guidance document updates the Wolfsberg Group's Trade Finance Principle’s paper last revised in 2011.  This broader industry edition now addresses the due diligence required by global and regional financial institutions of all sizes in the financing of international trade.

    The document was updated to reflect the growing regulatory expectations, as well as the more stringent application of existing regulations faced by the industry today. The collaborative effort will help standardize the practice of financial crimes compliance for trade transactions.

    The publication of this document is the culmination of more than two years of work undertaken by the organizations and their members.
     
    “In keeping with the traditional work of the ICC Banking Commission, this guidance on sound financial crimes risk management for the traditional trade products follows in the steps of the UCP, URC etc. in setting standards by which banks should conduct their trade business and to provide a sound basis for the continuation of the finance of international trade by banks,” said Olivier Paul, head of policy of the ICC.

    “When the leading industry associations work together, a stronger and universally acceptable standard of behaviors can be developed and adopted by all of the global trade finance community regardless of size,” said Tod Burwell, BAFT president and CEO. “These principles take into account the difference in development, cultures and size of all banks involved in trade finance and are not specific to any one country.“
     
    "The extensive collaboration between the Wolfsberg Group, the ICC and BAFT to enhance the Wolfsberg Group's 2011 Trade Finance Principles paper will serve a much wider number of financial institutions and, as a result, ensure their applicability more broadly across the industry. This publication is particularly timely in light of the recent focus on international trade flows and correspondent banking. This effort demonstrates the impact that such joint work can have on the industry and will no doubt drive further efforts on other issues in the future,” said Tracy Paradise, executive secretary of the Wolfsberg Group.

    About BAFT
    BAFT, the leading global financial services association for international transaction banking, helps bridge solutions across financial institutions, service providers and the regulatory community that promote sound financial practices enabling innovation, efficiency, and commercial growth. BAFT engages on a wide range of topics affecting transaction banking, including trade finance, payments, and compliance. The association website is www.baft.org.

    About The Wolfsberg Group
    The Wolfsberg Group is an association of thirteen global banks which aims to develop frameworks and guidance for the management of FCRs, particularly with respect to Know Your Customer, Anti-Money Laundering and Counter Terrorist Financing policies. The Wolfsberg Group consists of the following financial institutions: Banco Santander, Bank of America, Bank of Tokyo-Mitsubishi UFJ, Ltd, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan Chase, Société Générale, Standard Chartered and UBS.

    About The International Chamber of Commerce (ICC)
    The International Chamber of Commerce (ICC) is the world’s largest business organization with a network of over 6.5 million members in more than 130 countries. We work to promote international trade, responsible business conduct and a global approach to regulation through a unique mix of advocacy and standard setting activities—together with market-leading dispute resolution services. Our members include many of the world’s largest companies, SMEs, business associations and local chambers of commerce www.iccwbo.org
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  • BAFT submits letter to Basel Committee on Banking Supervision outlining price and capital impacts of Basel III proposals

    by Patrick Devilbiss | Nov 21, 2016

    On November 17, 2016, BAFT submitted a letter to the Basel Committee on Banking Supervision reiterating its belief that, if left unchanged, the Basel III proposals outstanding would be highly detrimental to trade finance.  BAFT highlighted recent work from Oliver Wyman which shows that lending will decrease 2.6% with every 1% increase in capital ratios.  Further, modeling shows that, for trade finance, capital requirements will increase by around 36%, and pricing will need to increase an estimated 60%-100% depending on the product.  As the Basel Committee wraps up its work related to the Basel III package of reforms, BAFT urges the Committee to modify the proposals to avoid these potentially calamitous effects.

    Read the Letter
  • BAFT Submits Letter to European Banking Authority on Article 55 of the BRRD

    by Patrick Devilbiss | Oct 02, 2016

    On Tuesday, September 30th, BAFT submitted a letter to the European Banking Authority (EBA) in response to their interim report on minimum requirement for own funds and eligible liabilities (MREL).  In the report, the EBA recognized the serious problems implementation of Article 55 presents for trade finance and offers a number of policy approaches for the European Commission to consider.  BAFT thanked the EBA for its work and urged them to adopt a blended approach, limiting the scope of Article 55 while at the same time providing national authorities the power to offer waivers where necessary. 

    BAFT Letter to EBA re MREL Report Aug 30 2016

  • Oil and Gas Best Practices Guidance Document

    by Patrick Devilbiss | Sep 11, 2015

    BAFT has published The Oil and Gas Industry: A Practical Guide to Independent Undertakings (the “Guide”) developed by its Oil & Commodity LC Working Group. This educational document reviews common terms found in the LCs and Demand Guarantees (collectively “Undertakings”) supporting this industry’s sales.

    BAFT identified a need to harmonize and qualify specific terms and document types in these Undertakings to better serve the industry needs. The Guide addresses such topics as fluctuating pricing, reduction and due date clauses, etc. It assists in reviewing documents not specifically mentioned in the various rule sets (UCP, ISP and URDG) governing undertakings, such as pipeline certificates, book transfers, meter tickets, letters of indemnity (“LOIs), etc.

    Guidance Document available to BAFT members here

  • BAFT Submits Intraday Liquidity Comment Letter

    by Patrick Devilbiss | Jun 04, 2015
    BAFT, alongside the IIF and the Clearing House, submitted a letter to the Basel Committee Working Group on the topic of intraday liquidity. Members can read the full comment letter on the BAFT website.
    View the Comment Letter