ICC Banking Commission has voted to adopt the Uniform Rules for Forfaiting (URF)

“We are very pleased to announce the ICC Banking Commission has voted to adopt the Uniform Rules for Forfaiting (URF) at its bi-annual meeting currently taking place in Mexico.
The following press release has been issued by the ICC and ITFA : “

ICC unveils new rules for forfaiting

Mexico City, 14 November 2012 – The International Chamber of Commerce (ICC) today unveiled new uniform rules on forfaiting (URF) to govern the international forfaiting market estimated at more than US$300 billion annually. The URF will enter into effect on 1 January 2013, providing a set of rules for the sale of instruments used for financing trade – which include bills of exchange, promissory notes, documentary credits and invoice purchases as well as some newer instruments.

Forfaiting facilitates the provision of finance to the international trade community and gives liquidity to instruments that would otherwise be limited to evidencing payment claims. By making payment claims easier to transfer, forfaiting enables them to be used as more than just a means of obtaining payment for goods or services delivered: they can be used to provide finance.

“The newly-adopted forfaiting rules are the latest example of ICC’s leadership in writing rules that govern international trade and investment and highlight the crucial role forfaiting plays in securing financing for exporters and importers,” said ICC Secretary General Jean-Guy Carrier.

The URF are the result of an ambitious project by ICC and the International Trade and Forfaiting Association (ITFA) to create new rules for a multilateral trading system fit for the 21st century.

Meticulously prepared over a period of three-and-a half-years and with input from experienced professionals from all over the globe, the URF are destined to become the standard text for both the primary and secondary forfaiting markets worldwide.

“It has long been an ambition of the ITFA to produce a single set of standardized terms and conditions for the two components of the forfaiting market – the primary market in which transactions are originated from exporters and other sellers of goods and services, and the secondary market where those transactions are traded between banks and other financial institutions,” said ITFA Chairman Paolo Provera.

The URF do not change the nature of the payment claim being originated or on-traded, and as such can be used alongside the full and ever-expanding range of instruments used to finance trade.

The rules were adopted today during a meeting of the ICC Banking Commission taking place in Mexico City from 12-15 November. Over 400 participants are attending the meeting, which is the first of the commission’s bi-annual meetings to be held in Latin America.”