This week ITFA published its revised guidelines on CRR-compliant insurance policies. The guidelines were first published in 2016 to assist banks with navigating the complex rules for credit risk mitigation that apply to non-payment insurance policies.
Sullivan's London insurance team is very pleased to have worked with ITFA to update the guidelines to reflect recent regulatory developments, including the Prudential Regulation Authority's policy statement on the use of certain types of credit risk mitigation (published in March of this year).
Credit risk mitigation
ITFA has published "A guide to accounting and legal issues under IFRS 9 for the trade receivables and supply chain finance industry."
These are ITFA's first set of guidelines on the standards aimed solely at the trade and supply chain finance industry, since the International Accounting Standards Board (IASB) issued IFRS 9, which came into force on January 1, 2018.
Supply chain finance
International financial services association BAFT (the Bankers Association for Finance & Trade), together with ITFA (the International Trade and Forfaiting Association) have published an updated New York law Master Participation Agreement (NY MPA) and associated guidelines. BAFT, together with ITFA, put together a working group of experts to review the existing form and identify changes based on current market practice.
Master Participation Agreement,
by Amanda Montano and Alexander Swayne
Sullivan is pleased to have been named "Best Trade Finance Law Firm" 2019 by leading trade finance publication Global Trade Review (GTR) at its annual Leaders in Trade awards, held on 2 May 2019 in London.
The Leaders in Trade awards highlight excellence in the trade, commodity, supply chain and export finance and fintech markets.
Trade & Export Finance,
Global Trade Review,
Leaders in Trade
International law firm Sullivan & Worcester LLP has today unveiled a dynamic new brand and logo.
The firm will now be known as "Sullivan" and, in conjunction with the name change, has revealed a bold, striking logo intended to graphically symbolise the forward-thinking and creative approach that the firm brings to client matters.
"Sullivan has always been a firm of innovative and strategic thinkers with a keen focus on getting positive outcomes for our clients. Our new brand and logo capture our firm’s energy," said Joel Carpenter, managing partner of Sullivan.
By Hannah Fearn, Geoffrey Wynne and Marian Boyle
Today the Prudential Regulation Authority (PRA) has published a Policy Statement (PS 8/19) and updated Supervisory Statement (17/13 “Credit Risk Mitigation”, which will come into force on 13 September 2019) in relation to the use of different types of guarantees as unfunded credit risk mitigation (CRM) for the purposes of calculating capital requirements under the Capital Requirements Regulation (575/2013) (CRR).
PRA Policy Statement,
Credit Risk management,
Capital Requirements Regulation,
By Sam Fowler-Holmes and Fiona Luong
UK companies who are trading or are considering trading with Iran may now face potential criminal penalties for breaching the EU Blocking Statute, underscoring the need to carry out due diligence in order to best manage their risk profile. This includes:
- assessing whether any authorisations are required from either the US or EU in relation to current and future business activities (e.g. by obtaining the EU Commission’s authorisation to comply with specified US extraterritorial sanctions); and
- weighing up the risks associated with breaching US extraterritorial sanctions against those of breaching the EU Blocking Statute and updating internal policies, protocols, and business plans (where appropriate).
This may cause problems for parties who will be caught between US sanctions and UK/EU requirements.
EU Blocking Statute,
by Amanda Montano and Judith Abanto
Kicking off the monthly Breakfast Seminar series for 2019, Sullivan’s London partner Mark Norris gave a presentation on the key compliance risks faced by trade and project finance practitioners.
Putting the need for compliance in context, he reported that the World Bank and the OECD estimate that bribery, tax evasion and corruption are responsible for revenue losses in the billions, particularly in poorer economies.
R v Skansen Interiors Ltd,
Bribery Act 2010,
Criminal Finances Act 2017
By Hannah Fearn
I recently had the pleasure of attending the 2019 BAFT Europe Bank to Bank Forum in London. The well-attended event included many highly informative panel talks covering a range of topics, but with a particular focus on the future of trade finance.
Highlights included a discussion on the challenges facing the digitisation of trade (including legal and regulatory hurdles) and insights into how banks manage liquidity in the era of instant payments. BAFT took advantage of technology to make the sessions as interactive as possible, with delegates able to use their phones to participate in live polls and Q&As.
By Fiona Luong and Geoff Wynne
On August 6, 2018 President Trump issued an executive order re-imposing certain sanctions that were lifted under the 2016 Joint Comprehensive Plan of Action ('JCPOA'). These include the prohibition of:
- The purchase or acquisition of US dollar banknotes by the Iranian government;
- Iran’s trade in gold or precious metals;
- The sale, supply or transfer (whether direct or indirect) to or from Iran of materials such as graphite, raw or semifinished metals, including aluminium and steel, coal and software, or integrating industrial processes;
- ‘Significant’ transactions involving the purchase or sale of Iranian rials, or maintenance of ‘significant’ funds or accounts outside Iran denominated in rials;
- The purchase, subscription to or facilitation of the issuance of Iranian sovereign debt; and
- Transactions within Iran’s automotive sector.
International Court of Justice,