Position Paper on Drafting ICC Rules for Supply Chain Finance
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Banking & finance
Following market demands to standardise supply chain finance (SCF) practice globally, the International Chamber of Commerce (ICC) has released a position paper analysing the preconditions for drafting ICC rules for SCF. The paper follows consultations gathering ICC members’ views on the relevance and opportunity of drafting ICC rules for SCF in the future.
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Various organisations have developed rules, definitions, guidance papers and reports in the area of SCF. ICC, as the major rulemaking body for trade finance, has contributed with the Uniform Rules for Forfaiting, Uniform Rules for Bank Payment Obligations and Uniform Rules for Digital Trade Transactions. Several bodies are also working to define and standardise SCF techniques. The Global Supply Chain Finance Forum (GSCFF), facilitated by the ICC Global Banking Commission, for example, published the Standard Definitions for Techniques of Supply Chain Finance and guidance papers.
Despite this progress, ICC does not consider the conditions for drafting rules as fulfilled. There is the need for a consensus on and wider adoption of definitions and practices to ensure that the rules satisfy actual market demand and are widely applied and eventually adopted.
ICC believes that greater standardisation, rules and frameworks are required to promote sound SCF practices. ICC will continue advocating with the GSCFF and other organisations to raise awareness of the Standard Definitions for Techniques of Supply Chain Finance and other guidance papers.
More information is available on the Global Supply Chain Finance Forum website.