ICC provides guidance to the trade finance market to address COVID-19 disruptions
The International Chamber of Commerce (ICC) has issued a couple of guideline publications for the governments of different countries to deal with the imbalance of the trade finance market due to the outbreak of the COVID-19 pandemic.
In these guideline publications, it has holistically addressed the problems that the trade finance market is facing and also provided the solutions to deal with it. Apart from the governments, it has been targeted at different markets and regulators.
The primary disruption that the ICC has addressed regards to the usage of hard copies of market-related documents. In the trade market, digitized copies of any documents are not considered. ICC has given a detailed response to the problem and designed a reform for the businessmen and policymakers.
As per the 1st guideline publication, ICC has set rules that are actually the technical guidelines to allow certain relaxations and flexibility for the market proceedings in the current situation.
The papers that are reviewed in the guidelines come under the Uniform Customs and Practice for Documentary Credits (UCP 600) and the e-Rules related to it. Other papers that are reviewed are the Uniform Rules for Demand Guarantees, Uniform Rules for Bank-to-Bank Reimbursements, and Uniform Rules for Bank Payment Obligations. Along with the papers, the e-rules are also reviewed in the guideline publication.
ICC’s second guideline publications sketch the ways through which banks and governments can take preventive measures against COVID-19 contamination in the trade and market environment. Paper-based trade is reviewed in the 2nd publication of ICC. The main lookout for ICC is to make a universal model that would safeguard the global trade market in the post-corona era.
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John WH Denton AO, the Secretary-General of ICC, has presented his thoughts on this matter. According to him, by publishing these guidelines, the ICC is doing its duty of keeping the global trade balanced and saving its continuity. However, he also talked about his expectations that the governments and regulators would reciprocate. He further said that only a proper action from such bodies would help the market run well.
Apart from standing firm on its responsibility as an organization, ICC is also working on ensuring the proper balance on the supply chain of the trade market. In the current situation of a global pandemic, it is providing the guidelines to take the road of digitization wherever necessary.
It shows the market how digitization can completely take an inevitable part to keep the trade market active. This avoids any situation where the global economy can collapse. The only concern for ICC, however, remains a solution for the proper scalability tracker for the global market.