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ICC releases its latest Trade Finance Survey

07/10/2016

The ICC today issued its latest Global Trade Finance survey based on 2015 data. The report can be downloaded from the following link: 

http://www.iccwbo.org/News/Articles/2016/New-survey-findings-worsening-global-shortage-of-trade-finance/

Highlights include:

Category 7 messages fell by 4.49% and category 4 messages fell by 6.79% compared to 2014 data. The number of MT700 messages saw a rate of decline of 3.76% in 2015. Declining volumes were seen in all regions of the world.

The average value of a letter credit fell sharply from USD643,000 in 2014 to USD350,000 in 2015.

Commercial letters of credit, on average, made up 38% of the trade finance product mix within a bank compared to 45% in 2014.

79% of respondents indicated no change in their take-up of Bank Payment Obligations, indicating that technology- driven change is not substantially driving business practices in 2015.

47% of respondents indicated that their net income had increased between 2014 and 2015. 

 

 

 

 

 

 


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We, as the issuing bank, requested the below document, under field 46A. “Insurance policy/certificate for 10.00 percent above CIF value payable to the order of Sampath bank PLC, covering institute cargo clauses (a), institute war clauses (cargo), institute strike clauses (cargo), transshipment risks marked premium paid claims payable in Colombo irrespective of percentage.” Insurance certificate is presented containing below wording on the face side of the document. “The settlement of loss and damage will be effected, unless otherwise provided, through the intermediary of Marsh SA/NV to whom all documents are to be forwarded for this purpose, and will collect the indemnity under deduction of a commission of one percent” Also, it indicates the LC conditions as a mirror image as follows under the heading of "letter of credit conditions" whereas insurance conditions are incorporated separately in the certificate: "covering institute cargo clauses (A), institute war clauses (cargo), institute strike clauses (cargo), transshipment risks marked premium paid claims payable in Colombo irrespective of percentage" Having considered the above clauses, we have quoted below discrepancies. 1) Insurance policy indicates a deductible of 1 pct instead of irrespective of percentage. 2) Insurance not marked premium paid Beneficiary’s bank disagrees with our discrepancy and raised below argument: “Insurance policy/certificate does not indicate a deductible of 1 pct irrespective of percentage on the face of the document and banks will not examine terms and condition in insurance document as per ISBP paragraph K22 and marked as premium paid under the LC conditions. Considering above, may we have your opinion on the discrepancy quoted by us and the counter argument raised by the beneficiary’s bank.