ICC Digital Library

Uniform Rules for Forfaiting

Implementation Date 1 January 2013


We are pleased to present the first-ever drafted Uniform Rules for Forfaiting (URF). They were developed as a joint project by the Banking Commission of the International Chamber of Commerce (ICC) and the International Forfaiting Association (IFA), therefore taking into account the legitimate expectations of all relevant sectors.

This first drafting of the rules was meticulously prepared over a period of three and a half years, and is the result of a collective effort by a number of ICC constituent groups. In particular, I would like to express my gratitude to the members of the ICC Banking Commission with its more than 500 members and the officers of the IFA who together led this project, making pertinent suggestions for changes in the text. ICC national committees also contributed substantially to the final product: 92 national committees submitted several hundred pages of valuable suggestions on successive drafts, a large number of which were incorporated into the final text.

The ICC URF Consultative Group reviewed the various drafts and added their own suggestions. The URF Drafting Group, ably chaired by Don Smith, met on a number of occasions, carefully reviewed all comments submitted by national committees and the Consultative Group and developed the final draft.

This collective effort has borne fruit; it has produced rules that reflect a broad consensus among bankers, users and all members of the forfaiting community. The present drafting is the result of an ambitious project to create a new set of rules for the forfaiting market estimated at more than USD300 billion annually. As such, URF is destined to become the standard text for forfaiting markets worldwide.

Jean Guy Carrier
Secretary General
International Chamber of Commerce

It has long been a cherished ambition of the International Forfaiting Association 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.

The Uniform Rules for Forfaiting have achieved that objective and I am immensely proud of the final product. On the part of the IFA, they reflect a mass of accumulated experience and good practice which have now been set down in writing for the benefit not just of our current – and future – members but for the wider trade finance market as a whole. Forfaiting is no longer an arcane art the province of a limited number of practitioners but is a technique of great flexibility and application. The URF will bring those benefits to the attention of the widest possible community. They are not just designed to interact with all of the trade finance and payment instruments currently used internationally but will meet the challenge of likely future developments and new instruments. By marrying both origination and trading the rules give access to a deep and liquid market which can provide much needed funding to producers and manufacturers and assist banks in managing their portfolios and credit exposures.

The URF are a practical set of rules and model agreements have been included to assist users in employing them. I have no doubt that the market will develop new forms and find uses for the rules which have not yet even been contemplated.

I again thank the members of the Drafting Group who put in so much work over a long period.

Paolo Provera
International Forfaiting Association