The ICC Bahrain, the national committee of the International Chamber of Commerce in the kingdom, has played a major role in drafting rules for forfaiting business, said a report.

Forfaiting is a financial transaction involving the purchase of receivables from exporters by a forfaiter. The forfaiter takes on all the risks associated with the receivables but earns a margin, said a report in the Gulf Daily News, our sister publication.

"ICC Bahrain has positively contributed to the newly-created and internationally recognised Uniform Rules for Forfaiting (URF)," said ICC Bahrain board adviser Ebrahim Zainal.

"Its trade forum chairman Pradeep Taneja was selected as a member of the drafting group," he said.

"Taneja was the only one in the group representing the entire Middle East.

"The fact that ICC Bahrain has been able to contribute to drafting three consecutive international banking and business rules - UCP 600 for Letters of Credit, URDG 758 for Demand Guarantees and now the URF for Forfaiting business, demonstrates that Bahrain is the banking and financial services hub of the Middle East.

"As a hub it not only follows international rules and best practices but also takes part in creation of such rules and practices."

ICC Banking Commission approved the new Uniform Rules for Forfaiting (URF) at a meeting in Mexico.

These are pioneering global rules for forfaiting business, which will govern the international forfaiting market estimated at more than $300 billion annually.

The URF will come into effect on January 1. "Forfaiting facilitates the provision of finance and liquidity to the international exporting and trade community at competitive rates," said Taneja.

"As such, the Uniform Rules for Forfaiting are advantageous not only to exporters who can discount their export receivables at competitive rates on a without recourse basis but also for banks which can build high quality trade related assets by sourcing transactions in the secondary markets," he added.-TradeArabia News Service