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ICC Financial Crime Risk & Policy Group issue 2 Policy Statements

11/06/2019

The ICC has recently issued 2 Policy Statements from the Financial Crime Risk & Policy Group.

How Does Global Trade and Receivables Finance Mitigate against Proliferation Financing?

This paper considers the application of a risk-based approach to assist Financial Institutions (FIs) in identifying high-risk customers and transactions in relation to Proliferation Finance (PF) related to Weapons of Mass Destruction (WMD). 

The paper can be found here Mitigation against Proliferation Financing.pdf

Financial Crime Compliance Checks on the Price of Goods in Trade Transactions – Are Price Checking Controls Plausible?

This paper outlines the various potential methods for checking the price of goods, and their feasibility, demonstrating that there are significant difficulties in implementing effective price checking for Trade Finance transactions:

- Price Checking, beyond a common sense check for manifestly unusual pricing, is extremely challenging for Financial Institutions to carry out when processing trade documentation.

- It is not plausible for a Financial Institution to develop a binary financial crime control for price checking and automated systems have, to date, not proved to be effective.

- Even where publically available pricing information is available (such as for commodities) price checking remains challenging due to the multiple factors which constitute the final price of the underlying commodity in a transaction

The paper can be found here Financial Crime compliance checks on price of goods.pdf


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A credit required: “1 COPY OF APPL'S CERTIFICATE OF CONFIRMATION OF THE AMOUNT TO BE PAID (THE REMAINING CLAIMING AMOUNT). THE REMAINING CLAIMING AMOUNT IS THE DIFFERENCE BETWEEN THE FINAL PURCHASE PRICE AMOUNT AND EIGHTY PERCENT (80%) INVOICE AMOUNT OF THE PROVISIONAL INVOICE. WITHIN FIVE (05) BUSINESS DAYS AFTER THE RECEIPT OF COPY OF FINAL INVOICE FROM THE BENEFICIARY THROUGH ELECTRONIC MAIL, THE APPLICANT SHALL SEND COPY OF APPLICANT'S CERTIFICATE OF CONFIRMATION OF DRAWING CERTIFYING THAT THE DRAWING AMOUNT IS IN ORDER. IN THE EVENT THAT APPLICANT'S CERTIFICATE OF CONFIRMATION IS NOT RECEIVED WITHIN ABOVE MENTIONED TIME, THE BENEFICIARY SHALL PRESENT 20% LC DOCUMENT AGAINST DISCHARGE PORT DOCUMENTS WITHOUT APPLICANT'S CERTIFICATE OF CONFIRMATION OF DRAWING.” Beneficiary presented their confirmation with amount to be paid being the difference between the final purchase price amount and 80% invoice amount of the provisional invoice. Can issuing bank raise a discrepancy of: 1. Certificate of confirmation not issued by the applicant as LC required or 2. Unpresentation 1 copy of applicant’s certificate of confirmation unpresentation. Because issuing bank received applicant’s confirmation that amount to be paid differs with amount to be paid by beneficiary (applicant showed deduction which is not mention under LC) plus applicant provided proof that applicant sent email to beneficiary within 5 banking days as LC required and amount to be paid. Whether or not applicant is protected by any terms or conditions of UCP, ISBP or ICC opinions,… because they presented applicant’s confirmation to beneficiary but beneficiary did not present applicant's document under their presentation?