The ICC Banking Commission is working with the International Forfaiting Association (IFA) to create a set of global rules for the forfaiting market.
A drafting group has been established following a request made last year to form a special task force to review existing IFA guidelines for the forfaiting primary market.
The ICC and IFA have now proposed to work together to develop rules for both primary and secondary markets.
However, the process of putting together the rules will take some time, according to Thierry Senechal, policy manager for the ICC Banking Commission.
“It is envisaged that the drafting may take several years before a final document is eventually approved,” he remarks.
In its traditional form, forfaiting is a form of export trade finance involving the discount of trade-related debt obligations due to mature at a future date without recourse to the exporter or endorser.
The IFA was established in 1999 and is a global association representing commercial companies, financial institutions and intermediaries involved in forfaiting.
The ICC is a global rule-making body for the commercial banking industry, and has previously produced rules and guidelines governing the use of documentary credits, documentary collections, bank-to-bank reimbursement and bank guarantees.
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