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The Prudential Regulation Authority publishes Policy Statement updating its Supervisory Statement on Credit Risk Mitigation

Posted by Hannah Fearn on Mar 13, 2019 1:22:34 PM

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).

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Topics: PRA Policy Statement, Credit Risk management, Capital Requirements Regulation, supervisory statement

The UK passes new Order making it a criminal offence to breach the EU Blocking Statute

Posted by Sam Fowler-Holmes on Feb 8, 2019 11:21:08 AM

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.

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Topics: international trade, EU Blocking Statute, Amendment Order

S&W Monthly Breakfast Seminar, January 2019 — Trade, Export and Project Finance Compliance Refresher

Posted by Amanda Montano on Feb 6, 2019 9:31:02 AM

by Amanda Montano and Judith Abanto

Kicking off the monthly Breakfast Seminar series for 2019, Sullivan & Worcester’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.

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Topics: Trade Finance, R v Skansen Interiors Ltd, Bribery Act 2010, Criminal Finances Act 2017

2019 BAFT Europe Bank to Bank Forum

Posted by Hannah Fearn on Feb 5, 2019 10:32:44 AM

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.

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Topics: Brexit, Trade Finance, BAFT, international trade

Iran Sues US Over Re-Imposition of Sanctions and EU Reactivates Blocking Regulation

Posted by Geoff Wynne on Oct 9, 2018 10:24:14 AM

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.
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Topics: European Union, International Court of Justice, US-Iran Relations, International Law, Economic Sanctions

ARRC publishes draft transitional provisions for USD LIBOR replacement rate

Posted by Robert Franklin on Oct 2, 2018 4:46:47 PM

While we are waiting on the LMA's Working Sub-Group on Transition Issues in Syndicated Loan Markets to produce draft provisions dealing with the transition to SONIA, their US counterpart, the Alternative Reference Rates Committee (ARRC) has already done so for SOFR, the US dollar risk free rate (RFR), in its recent consultation paper "Regarding More Robust LIBOR Fallback Contract Language for New Originations of LIBOR Syndicated Business Loans".

The ARRC's approach is likely to be influential for the LMA in relation to transitional drafting for USD (and potentially for other currencies as well in the interests of consistency). The highlights of the ARRC consultation paper include:

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Topics: SONIA, ARRC, SOFR, RFR, LIBOR, LIBOR replacement rate, syndicated business loans

Trade Finance — 'Documenting to Improve Regulatory Compliance'

Posted by Geoff Wynne on Oct 2, 2018 9:50:57 AM

I recently authored the article "Documenting to Improve Regulatory Compliance," published by Trade Finance.

In the article I look at how, in a world of ever increasing regulation, there might be some areas in trade finance documentation where parties can show they are addressing concerns and taking steps to protect their position against a review by Regulators of what they are doing. The article looks at the position under English law and in light of current and future UK regulations.

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Topics: Trade Finance

S&W Monthly Breakfast Seminar - the low down on BAFT MPA

Posted by Amanda Montano on Sep 28, 2018 11:44:37 AM

By Amanda Montano, S&W Associate and Fiona Luong, S&W Trainee

Having been instructed by BAFT to prepare the revised Master Participation Agreement, Sullivan & Worcester’s London Trade Finance team gave a presentation on ‘All you need to know about the BAFT MPA’ at the firm’s September Seminar.

Attended by an audience of more than 100 financial institutions and participants in the trade finance market, Geoff Wynne and Hannah Fearn talked about the key changes and implications of the new MPA.

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Topics: Trade Finance, Master Participation Agreement, BAFT, English Law

Project Finance Push

Posted by Geoff Wynne on Sep 21, 2018 10:30:15 AM

I am very pleased to tell you that Robert Franklin has joined the firm. Robert is a former colleague and joins us as senior counsel in the finance team in London, where his role is to expand and help lead the project finance practice.

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Topics: Project Finance

Cape Town Calling

Posted by Geoff Wynne on Sep 18, 2018 11:48:45 AM

From Tuesday 4th to Thursday 6th September 2018, ITFA, the International Trade and Forfaiting Association, a worldwide trade association for companies, financial institutions insurers and intermediaries engaged in trade and forfaiting, hosted its 45th Annual International Trade and Forfaiting Conference in Cape Town.

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Topics: Trade Finance, BAFT, ITFA

About the Blog


Talking Trade Finance is here to provide you with all of the latest updates in the Trade & Export Finance Industry. 

The material on this site is for general information only and is not legal advice. No liability is accepted for any loss or damage which may result from reliance on it. Always consult a qualified lawyer about a specific legal problem.

 

Meet the Editor


cook

Simon Cook is a partner in the Trade & Export Finance Group in Sullivan & Worcester’s London office. He has experience in a wide variety of banking and finance transactions, including structured trade and commodity finance, project finance, warehouse finance, supply chain finance, ECA finance and borrowing-base facilities. He advises on transactions across emerging markets for both lenders and borrowers notably in the oil, telecoms, soft commodities and metals sectors in Africa and the Middle East, where he was based for four years. Simon also acts for industry bodies and is a member of ITFA’s Africa Regional Committee.

 

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