News Stories Archives

USCIB Leads in Preparations for Upcoming China Meetings at OECD

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USCIB members and staff played leading roles in the April 23 China Expert Group’s preliminary meeting to preview and discuss Business at OECD (BIAC) presentations that will be made at the kick-off session of the OECD’s Informal Reflection Group on China in May. During the preliminary meeting, BIAC experts, including USCIB Senior Advisor Shaun Donnelly and Dell’s Eva Hampl (formerly USCIB and now a Vice Chair of BIAC’s China group), advanced key points that BIAC will emphasize including on state-owned enterprises (SOEs), investment, innovation and digitalization, and climate neutrality.

With regards to SOEs, Donnelly and others emphasized the importance of including provisions on SOEs in future investment and trade agreements, updating World Trade Organization (WTO) rules on subsidies, drawing China into multilateral consensus on export and development finance, as well as engaging China to reduce excess capacity in steel and rejoin the Global Forum on Steel Excess Capacity. The investment dialogue between China and the OECD should also be intensified and made more substantive, rather than political, according to Donnelly. Updating the investment policy review of China is also critical since the last review was done in 2008.

On innovation and digitalization, Donnelly noted the need to review efforts to onshore production in the name of supply chain resiliency, to study global value chains to ensure that policies are driven by OECD-generated facts and not politics and protectionism, to foster cooperation on IT and Artificial Intelligence (AI) information-sharing and standards’ development, engaging China on implementation and dissemination of AI principles and policies, as well as monitoring and acting on China’s development of virtual currency along with its impact on major currencies.

“Engaging China on harmonizing carbon pricing and emission trading schemes, pushing China more toward sustainable investment policies at home and abroad (such as their Belt and Road projects use of fossil fuels) and continuing to press for mitigation and strong environmental commitments from China is key,” said Donnelly.

Donnelly also led a discussion urging BIAC, as a business forum, to press the OECD and its member governments for substantive reform and results in its engagement with China and to worry less about protocol and diplomatic formalities.

“It was great to have USCIB and American business actively involved in BIAC’s preparations for this important China strategy session at the OECD,” added Donnelly.  “With a new Secretary General coming to OECD in June, a new U.S. Administration looking to play a leadership role at the OECD, and steadily growing concerns around the world about some of China’s policies and practices, it’s vital that Business at OECD and its American members focus on these issues of how the OECD can play a useful role with China.”

Donnelly added: “Eva Hampl from Dell did a great job leading Friday’s discussion on the innovation and digitalization issues.  She and I look forward to our roles as BIAC lead speakers in the session with the OECD China group.  It was also great to see several USCIB members logging on for the BIAC discussion, confirming that China issues, broadly defined, remain important priorities for USCIB and its broad, cross-sectoral membership.”

If members have issues, questions or suggestions related to this BIAC and OECD effort on China, please contact Allice Slayton Clark (asclark@uscib.org).

USCIB Banking Committee Welcomes New Chair: Bank of America’s Geoff Brady

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Geoff Brady
Photo credit: Bank of America

USCIB is pleased to announce the appointment of USCIB member Geoff Brady of Bank of America as new chair of the USCIB Banking Committee. Brady, who is head of global trade and supply chain finance at Bank of America, succeeds Michael Quinn of JPMorgan Chase.

According to USCIB Senior Director for Trade, Investment and Financial Services Eva Hampl, USCIB’s Banking Committee works to increase efficiency and decrease the cost of international trade transactions by promoting the standardization of international banking procedures—primarily by providing input into the global work of the International Chamber of Commerce (ICC).

“We look forward to Bank of America’s active participation in this important area,” said USCIB President and CEO Peter Robinson. “We are confident in Geoff’s leadership in the ongoing work of the Committee, including ensuring strong U.S. representation in the ICC Banking Commission and ICC’s work to develop global rules and facilitate access to trade finance.”

USCIB Calls for International Financial Support for At-Risk Businesses, Workers in Developing Countries Impacted by COVID

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April 23, 2020 – As the continuing health consequences of the devastating COVID-19 pandemic are being felt across the globe, no country has been spared, but the impacts are particularly acute in vulnerable middle- and lower-income countries.

The scale and scope of the COVID-19 pandemic requires that all stakeholders come together to develop broad-based approaches to this pandemic crisis. Critically, without immediate support from international development finance institutions, the ability of vulnerable countries to reopen and resume economic activity once the pandemic is contained and addressed, will be severely compromised.

As part of the international response to address the health, economic and social crisis from this pandemic, the G-20 countries, including the G-20 Finance Ministers, have coordinated closely with the International Monetary Fund (IMF) and the World Bank Group and regional development banks, to mobilize resources to address urgent needs.

We call upon the G-20 and leadership of the international financial institutions to support those countries requiring assistance for the health care assets to combat the COVID-19 pandemic.

Additionally, we urge these countries and institutions to allocate necessary resources for:

  1. sufficient funds for governments to offer credit facilities to maintain and avoid the liquidation of businesses in export sectors vital to the economies of these vulnerable countries,
  2. funding to governments to support functioning social protection programs, including income to meet the basic needs of their work force so that they can be supported while they wait to resume their jobs once businesses can be reopened, and
  3. technical and financial support necessary for the export and other economic sectors in these countries so that workplaces can resume operation safely taking into account strategies to mitigate COVID-19 risk.

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USCIB’s Donnelly Retires; Will Take on a Consulting Role 

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Shaun Donnelly

Vice President for Investment Policy and Financial Services Shaun Donnelly is retiring April 3 after eight and half years at USCIB.

Donnelly came to USCIB in 2011, after an impressive 36-year career as a Department of State Foreign Service Officer followed by shorter stints at two other leading Washington trade associations. Throughout his time at USCIB, Donnelly has been a leading voice for the U.S. and international business communities on a wide range of investment policy issues, speaking out forcefully and publicly, as well as privately, to the U.S. Administration, Congress and in international fora, from the OECD and World Trade Organization (WTO) to the UN Conference on Trade and Development (UNCTAD) and the UN Commission on International Trade Law (UNCITRAL).

Donnelly has also been a sought-after and a provocative speaker at investment conferences and seminars around Washington and around the globe.  But most importantly, Donnelly has always been willing and able to put his experience, his expertise and his rolodex to use to assist USCIB members, collectively and individually.

“It has been a real privilege to have Shaun as part of the USCIB team, and I’m delighted that he will continue on in an advisory role,” said USCIB President and CEO Peter Robinson. “Shaun is a global regulatory diplomat par excellence, never hesitating to stand up for private sector interests in a forceful, rational and compelling way.”

In the State Department’s Foreign Service, Donnelly served eight years as a Deputy Assistant Secretary of State (DAS) in the Bureau of Economic and Business Affairs, at various times leading policy on Trade, Energy and Economic sanctions.  For almost five of those years he was the Principal Deputy Assistant Secretary, the Department’s #3 economic policy official. Donnelly also served as U.S. Ambassador to Sri Lanka and Maldives and as Deputy Ambassador to Tunisia and Mali. In his final U.S. government assignment, Donnelly was detailed to the Office of the U.S. Trade Representative (USTR) as Assistant USTR in charge of Europe and the Middle East, running USTR’s largest regional office.  He retired from the Foreign Service with the personal rank of Career Minister, roughly equivalent to that of three-star general.

“Simply put, it’s time,” Donnelly said.  “It’s been a great run and I have really appreciated the opportunity to work with so many great colleagues at USCIB and in our member companies.”

For us at USCIB, the good news is that Donnelly has agreed to stay on in a consulting role, serving as a senior advisor to Robinson and USCIB Senior Vice President for Policy and Government Affairs Rob Mulligan, as well as to take on a few special projects.

“I look forward to staying involved behind the scenes with USCIB and helping where I can,” said Donnelly. “It’s a great organization and there is still a lot of important, challenging work to do.”

USCIB Weighs in With Administration on Trade Deficits

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With the Trump administration seeking to reorient U.S. trade policy toward bilateral agreements, bilateral trade deficits have been put forward as a marker of the health — or lack thereof — of U.S. commercial relations with a given country. USCIB has taken up this issue in a recent statement to the Department of Commerce.

In its statement, USCIB said: “On the specific issue of trade deficits, particularly bilateral deficits (or surpluses) with individual countries, USCIB supports the view of most mainstream economists, who are convinced that trade deficits are a product of broader macroeconomic factors, not trade policy, and that the trade balance should not be viewed as a straightforward indicator of a country’s economic health. While it is useful to address trade barriers that impede access for U.S. goods and services exporters to specific markets, we should not set up bilateral trade balances as the metric of successful trade policies.”

Furthermore, the USCIB statement argued for greater attention to trade in services, not just goods, in any analysis of trade balances. “In the United States, services account for almost 80% of GDP, and services jobs account for more than 80% of private sector employment,” USCIB said. “Accordingly, a trade policy focused solely on trade deficits in manufacturing is misleading.”

The Commerce Department is expected to hold hearings on trade deficits later this week.

New Compliance Guide for Trade Transactions Published

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The International Chamber of Commerce (ICC) Banking Commission, along with partners, the Wolfsberg Group and the Bankers Association for Finance and Trade (BAFT) recently announced the publication of a revised guidance document on Trade Finance Principles. This broader industry edition now addresses the due diligence required by global and regional financial institutions of all sizes in the financing of international trade.

The document was updated to reflect the growing regulatory expectations, as well as the more stringent application of existing regulations faced by the industry today. The collaborative effort will help standardize the practice of financial crimes compliance for trade transactions.

The publication of this document is the culmination of more than two years of work undertaken by the organizations and their members.

“In keeping with the traditional work of the ICC Banking Commission, this guidance on sound financial crimes risk management for the traditional trade products follows in the steps of the UCP, URC etc. in setting standards by which banks should conduct their trade business and to provide a sound basis for the continuation of the finance of international trade by banks,” said Olivier Paul, head of policy of the ICC Banking Commission.

You can download the paper here.

New Survey Finds Worsening Global Shortage of Trade Finance

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2016 ICC Global Survey on Trade Finance shortfall_sourceBusiness executives have identified a sharp decrease in the availability of financing for cross-border trade, according to the latest annual survey of global trade finance from the International Chamber of Commerce. According to the survey — which received 357 responses from 109 countries worldwide — 61 percent of respondents reported a global shortage of trade finance . Only 52 percent of respondents reported an increase in trade finance activity, compared to 63 percent in 2015 and 80 percent in 2012. Furthermore, the perceived shortfall came predominantly from regional and global banks — 78 percent and 56 percent respectively, compared to 41 percent of national banks.

ICC Secretary General John Danilovich said: “We must emphasize the importance of trade finance. It is often forgotten – trade finance has dropped off the international agenda. We need to do more to communicate its central importance to the global economy.”

Read more and download the survey on the ICC website.

 

Business Urges Congress to Approve Ex-Im Bank Quorum Requirement

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Money_globeUSCIB joined 14 other business associations urging Congress to approve the Export-Import (Ex-Im) Bank’s quorum requirement so that it may again review transactions over $10 million.

“While the Ex-Im Bank is back in operation and accepting new applications, it is prohibited from approving significant transactions because of the lack of a quorum on the Bank’s Board of Directors,” the business group wrote in a letter sent to Congressional leaders on September 12. “As a result, manufacturers and other exporters throughout the United States are at a significant disadvantage to global competitors who are aggressively supported by their own governments’ export credit agencies.”

The business associations argued that a fully operational bank would support millions of U.S. jobs by enabling companies to compete more successfully in the global economy. USCIB and others noted that the Bank is a vital tool in leveling the global playing field, helping American businesses secure new customers, particularly in emerging markets.

“With every passing day, businesses from the United States are missing out on new business opportunities overseas, to the detriment of local economies and American jobs. Congress can and must act swiftly,” USCIB and others wrote. “As associations representing millions of businesses throughout the United States, we urge you to move forward legislation as part of the Continuing Resolution that will enable Ex-Im to consider and act on all transactions immediately to boost America’s ability to compete globally.”

Read the full letter.

ICC Banking Commission Global Survey Highlights Impact of Trade Finance Gap on SMEs

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Cover Page ICC Global Survey on Trade Finance 2015_sourceThe International Chamber of Commerce (ICC) Banking Commission has released the results from its 2015 Global Survey on trade finance – highlighting the impact of the trade finance gap on SMEs, the impact of regulation on correspondent banking, as well as positive trade finance trends, particularly with regards to export finance.

Small and Medium-sized Enterprises (SMEs) are among the hardest-hit by the trade finance gap, reports the Global Survey on trade finance, released on September 29 by the International Chamber of Commerce (ICC) Banking Commission. The Survey received 482 responses from 112 countries around the world and showed that SMEs account for nearly 53 percent of all rejected trade finance transactions. By contrast, 79 percent of the trade finance transactions for larger businesses are accepted.

The trade finance gap is highlighted throughout the Survey, citing compliance as a chief barrier to trade finance. Nearly 46 percent of the banks surveyed terminated correspondent relationships due to the cost or complexity of compliance, while 70 percent of respondents reported declining transactions due to AML/KYC requirements. Furthermore, the percentage of respondents citing anti-financial crimes compliance requirements as a significant impediment to trade finance has increased from 69 percent last year, to 80 percent in this year’s Survey. This trend is expected to continue, as nearly all (93%) of respondents expect compliance requirements to increase during 2015.

“The Global Survey works as a snapshot of market trends, allowing us to compare progress from previous years and gauge global expectations,” said Vincent O’Brien, chair of the ICC Banking Commission Market Intelligence. “This year that snapshot has highlighted the severity of the trade finance gap – which continues to be impacted by regulation, despite the low-risk nature of trade finance – and particularly its impact on SMEs. This is crucial given SMEs constitute over 95 percent of all firms and account for approximately 60 percent of employment worldwide.”

That said, the results from the Survey also show some positive trends in trade finance. Around 63 percent of respondents reported an increase in overall trade finance activity, with 61 percent of banks stating they have increased their capacity to meet trade finance. What’s more, 25 percent of respondents to the Global Survey on trade finance consider trade instruments supporting trade as involving more than 75 percent less inherent risk than conventional lending.

The results from the Global Survey also reflected positively on export finance, with 79 percent of respondents in the industry claiming it remains a profitable business. The industry also observed a significant decrease in pricing, and even more so, fees in 2014.

“While the trade finance industry is certainly facing challenges, and the trade finance gap is a clear issue, the results from the Global Survey on trade finance show that it is not all doom and gloom,” added O’Brien. “The financial landscape is recognizing the importance of trade and, in addition to banks stating they have increased capacity to meet trade finance, we have an array of alternative lenders – such as specialist financiers, export credit agencies, and multilateral development banks – stepping up to fill the trade finance gap.”

Daniel Schmand, chair of the ICC Banking Commission, said: “New players can prove their worth by addressing the shortfall of trade finance; new or alternative financiers may support trade in areas where banks are restricted by risk appetites, regulatory burdens or stakeholder concerns.”

Download the 2015 ICC Global Trade and Finance Survey.

ICC Launches Global Export Finance Committee

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The launch of the ICC Global Finance Committee took place on September 7 in Barcelona, Spain.
The launch of the ICC Global Finance Committee took place on September 7 in Barcelona, Spain.

The International Chamber of Commerce (ICC) launched the “ICC Global Export Finance Committee,” an export finance working group supported by many leading banks across the export finance industry.

Operating under the umbrella of the ICC Banking Commission, the committee is the first step towards building a real global export finance community – representing medium- and long-term (MLT) export finance banks.

The Global Export Finance Committee has three key objectives:
  1. To create a credible standing global discussion forum of banking experts in MLT export financing,
  2. To create a representative body to discuss industry matters with various stakeholders,
  3. To advocate for and help develop improvements and efficiencies through the standardization and harmonization of processes and regulations.

“The Global Export Finance Committee fills a much needed role in the export finance industry,” said Eric de Jonge, head of structured export finance at ING Bank, who chairs the working group. “It aims to not only act as a discussion forum and a body to exchange information and views on export finance but also to enable improvements and increase the efficiency of the processes and regulations governing the export financing industry as a whole.”

Although the export financing industry as a whole is relatively small, it serves an important purpose for OECD governments as well as governments in emerging markets, enabling and facilitating international trade and economic activity. Indeed, governments in many countries are exploring how they can more efficiently support exports, investments and trade.

Not only has the industry observed changes in regulatory requirements such as Capital Requirements Regulation (CRR) and Basel III, it also faces changes in the value chain concerning Export Credit Agencies (ECAs). These developments, together with the involvement of the capital markets, mean it is necessary for banks active across the industry to reach a common approach.

ICC has already made a first step towards reaching a common approach through the inclusion of MLT trade and export finance products in the influential ICC Trade Register Report. The dedicated Trade Register working group has successfully evolved into a platform of active banks that are responsible for ECAs, and that supports transaction data gathering.

While the Trade Register working group focuses primarily on data gathering, there are many more topics relevant to the export finance industry. Cooperation with ECAs, advocacy before governmental and regulatory bodies, standardization, and harmonization, as well as the exchange of views and data to the extent allowed under anti-competition laws, are just a few of the areas that can be explored further by the ICC Global Export Finance Committee.

Download ICC Global Export Finance PDF Document here