The International Chamber of Commerce’s (ICC’s) recently released Global Survey report points to compliance as a major impediment in the provision of trade finance.
The report also highlights the increasing difficulties small- and medium-sized enterprises (SMEs) face obtaining trade finance as a result of tougher compliance requirements.
The challenges of meeting compliance requirements relating to anti-money laundering (AML) and know your customer (KYC) regulations were cited by 90 per cent of respondents to the survey as barriers to trade finance provision. In the 2015 survey, 81 per cent of respondents said it was a barrier.
Additionally, nine out of ten of survey respondents in the latest survey cited the cost and complexity of compliance requirements as barriers to trade finance.
A sizeable 40 per cent of respondents reported terminating banking relationships due to compliance requirements, with 83 per cent expecting compliance costs to increase.
The Global Survey shows that SMEs face 58 per cent of total rejections, despite submitting 44 per cent of all trade finance proposals.
The report says urgent action is required to limit the effects of tougher requirements on trade finance provision, and to help meet the needs of global SMEs, which it says are being disproportionately affected.
The ICC Global Survey can be downloaded from here.
Categories: Trade Based Financial crimes News