Trade Finance elements – Trade Compliance

The recording include specific discussion on:

The trade compliance landscape

• Outline the goals, challenges, benefits and unintended consequence of trade finance

Overview of the top news stories, trends and developments in trade finance compliance, including such challenging issues as:

• Does Blockchain have anything to offer compliance and what are banks doing about it?
• Are the Financial Crime Compliance (FCC) risks in Trade Finance reduced or eliminated?
• What should a bank do if it has ceased a customer relationship for based on its compliance criteria but then finds that same former customer involved in a subsequent transaction brought to it by another customer?
• What happens when a problem arises midway through a relationship and what does the regulator expect a bank to do?
• With recent, well publicised, issues relating to internal control weaknesses and also country systemic weaknesses, what more could banks do to mitigate the FCC risks both internally and in respect of their counterparty risk assessments?

What are the key concerns in the regulatory landscape?

• Regulators have different requirements across jurisdictions: what standards should banks be working to? What is the scope of harmonisation to deter regulatory arbitrage?
• Unfunded Credit Risk Mitigation: do the regulators understand the issues and the unintended consequences?
• Divergence on sanctions: which regulator do we need to listen to and why? Is regulatory arbitrage real or just theoretical?
• How will US, UK and EU sanctions on Iran look in say three months' time?
• De-risking and the impact on trade through the correspondent network: are the consequences understood? Is this having an adverse effect on cross border transactions?
• Deferred Prosecution Agreements: What are the potential implications? Is this affecting behaviours?

Global standards and guidelines – latest developments

• Development in global standards and guidelines: Latest communications from the Wolfsberg Group, FATF, BAFT, ICC, Association of Banks Singapore
• What are the changes and impact? What do we need to do differently?
• Are the consequence of changing developing markets understood?
• Is there more scope for two tier correspondent banking i.e. full Nostro/Vostro account relationships including payments or limited to letters of credit and demand guarantees
• Do regional banks fully understand the risks and responsibilities of correspondent banking?
• Moving the 'tick box' approach forward: the need to constantly invest in people and systems.
• Training requirement as identified by organisations including FCA Thematic review

The impact of technology and digitization

• What are the issues that banks are trying to resolve through technology? Is this focussed on risk aversion or reduction in costs/regulatory fines?
• What are the obvious areas in which technology can help? Are there limitations?
• How is the impact of technology viewed by the regulator?
• What are the next steps to technology support including Artificial Intelligence?
• Will technology solve all the problems or must staff awareness and understanding increase in tandem?

What are the issues and concerns facing banks and their customers?

• Customer due diligence – making the best use of subscription services and the views of the regulators
• Checking counterparties – how far must a bank go?
• Advising banks? What undertakings can/should they advise? What degree of diligence is due? To what extent do they need to familiarise themselves with the terms of the advised L/C?
• Price checking – exactly what is expected by the regulator? What are the industry standards?
• Dual use goods – what information is in the public domain? What are banks doing to maintain their own database?
• Strategically controlled goods
• Documentary credits, demand guarantees and standby credits and collections, what is on the horizon to cause concern?
• Future shape of FCC controls in trade