New York, N.Y., February 19, 2013 – Every year, some $300 billion of world trade takes place under forfaiting, a type of trade finance where the purchaser takes on all risk associated with receivables. The International Chamber of Commerce (ICC) has published a new set of uniform rules for the practice, according to ICC’s American chapter, the United States Council for International Business (USCIB).
ICC Uniform Rules for Forfaiting (URF 800), now available from the USCIB International Bookstore, are the first-ever global rules governing a practice generally referred to in the U.S. as “structured trade finance.” The new publication provides clear definitions and practical model agreements for all aspects of forfaiting. Developed jointly by the ICC and the International Forfaiting Association, the rules went into effect on January 1.
“These rules will help avoid misunderstandings, thereby reducing risk, harmonize best practices worldwide and facilitate dispute settlement,” said Donald Smith, president of Global Trade Advisory Ltd. and chair of the ICC drafting group that developed the rules. ”Created by experts for experts, ICC Uniform Rules for Forfaiting is a must-have publication for anyone involved in international trade finance transactions.”
Forfaiting facilitates the provision of finance to the international trade community and gives liquidity to instruments that would otherwise be limited to evidencing payment claims. By making payment claims easier to transfer, forfaiting enables them to be used as more than just a means of obtaining payment for goods or services delivered: they can be used to provide finance.
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