Saudi business sector keen to expand global partnerships

Updated 09 October 2014
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Saudi business sector keen to expand global partnerships

ICC Saudi Arabia will intensely pursue maximum mobilization and utilization of the business sector in a bid to enhance its global role, says Yasin Al-Sorour, head of the ICCSA at the Council of Saudi Chambers (CSC).
“This is all the more essential considering the reputable status of the Paris-based International Chamber of Commerce (ICC), which plays an effective role in the global economic and business policies,” Sorour told Arab News in an exclusive interview.
He said the formation of the ICCSA’s board of directors, which represents all major business sectors — whether industrial, financial, commercial or service — will ensure wider participation of such sectors in its activities.
The upcoming period will witness a major shift in the work of the ICCSA in the face of the existing economic challenges.
It will thus become an active platform to empower the Saudi business sector join global functions and provide a variety of insights in a manner that will, hopefully, serve the interests of business sectors in particular and the Saudi economy in general, Sorour added.
The vision of the ICCSA is based on the fact that the Saudi business sector is an integral part of the global business sector and the ICC is considered a bridge that links the two entities.
Therefore, he stated, it has become imperative to build bridges with counterparts at the global level aimed at bringing knowledge, best practices and global systems into the Saudi business sector.

The following are excerpts from the interview:

What is the work nature of the ICC and its role in the development of private sector activities of member countries?
The Paris-based ICC is considered the biggest business organization and representative of global states.
Its members are selected from companies that have interests expanding into all activities of the private sector companies.
It retains strong and vital relations at the global level; it has a reputable advisory mission with the World Trade Organization (WTO) and key partner with UN agencies, the International Monetary Fund (IMF), the World Bank (WB) and, likewise, provides G20 and G8 countries with basic data on the principles of development of the international trade.
The ICC was established in 1919 in the aftermath of a major economic and business recession immediately following the First World War by a small group of business leaders who called themselves as ‘peace traders.’
It was termed the International Business Organization and was the sole entity empowered to speak on behalf of the business community in all parts of the world and geared to serve business sector through the activation of international trade and investment.
Who are members of the ICC?
The ICC has a membership base of more than 100,000 companies, both corporate and individuals, who are specialists or interested in this area representing more than 130 countries. They belong to organizations, associations or committees representing trade, business and economic sectors in all parts of the world. They are called national committees affiliated to the Paris-ICC and work hand in hand to support ICC’s mission and works.

What is the nature of the ICC activities?
The ICC undertakes three major activities: preparing laws and policies governing all global business transactions and commercial arbitration, preparing and drafting rules and laws governing commercial practices being practiced on daily basis through thousands of contracts and financial dealings such as the principles and norms of commercial arbitration, purchasing and delivery (INCOTERMS), united code of practices (UCP 600) and united code of bank guarantees, commercial funding and banking laws.

What committees are working under the umbrella of ICC?
A. There are 16 committees, which are entrusted to lay down ICC policies.
They meet standards and laws worked out by the ICC, which assigns works to committees, each of which is to be specialized in certain trade area and has to have a group of selected international experts.
All ICC policies, rules and standards are prepared by specialized working bodies called ‘policy-making committees.’
Normal procedure requires policy statements first to be adopted by a commission, in consultation with national committees, and then approved by the executive board, before they can be regarded as official and public ICC positions.
Meetings of commissions are normally held twice a year.
The commissions include technology and banking practices, commercial projects in community, commercial law and practices, trade and investment policy, insurance and financial services, arbitration, taxation, e-commerce, customs and trade laws, transport and logistics, biochemistry, competition, environment and energy, intellectual property, marketing and advertising, and anti-corruption.

With an international arbitration court, does ICC have any legal role in commercial disputes arising between countries?
This court was set up in 1923 under the guidance of the ICC and since then has been active in solving global commercial disputes. Saudi Arabia is a member of the Paris-based court and still retains membership and works vigorously for a couple of years.
By the end of the 20th century, commercial arbitration has gained wide and global acceptance in light of huge commercial disputes, which had been settled by the court whose rulings are recognized globally, where more than 120 countries signed the New York Convention in 1958 giving recognition to the court decisions.

What are the objectives of the International Court of Arbitration?
A. The court aims to promote efforts in solving international commercial disputes through the ICC arbitration and other mediation means, study judicial aspects of arbitration on how to settle disputes of commercial nature, benefit from new technologies to settle current commercial disputes, and develop commercial policies, rules and standards on continual basis.
As far as ICC Saudi Arabia is concerned, an arbitration commission was formed with the intent to attract ideas and views on issues related to international arbitration and forms of settling disputes.
The commission is also meant to promote the idea of resort to arbitration as a way to resolve commercial disputes, study judicial dimensions of arbitration and multifaceted forms of settlement of the global commercial nature and take advantage of the current dispute settlement services provided by the ICC in the light of current developments, including those issues related to modern technology.

Does ICC have any link with other commercial chambers?
Here comes the role of the World Chambers Federation (WCF), which functions under the umbrella of the ICC.
The WCF, specialized in commercial chambers worldwide and utilizing global communication networks, provides guidance and help commerce chambers exchange expertise and promote their performance in all financial, administrative and service areas.
The WCF also joins hands with a number of world organizations, such as the World Bank and the UN Development Program and other agencies, to help commerce chambers in the developing countries provide services and boost their role in economic growth of their respective countries.

In this context, how does the WCF plan to realize its objectives?
The WCF pursues to realize a package of objectives, notably encouragement of cooperation between local chambers and other world equivalents, organization of forums and conferences to allow heads of chambers contact with one another and exchange topics of common interests. The WCF also encourages chambers to make them mediators between private and government sectors and help chambers deliver best services to their respective members.

There is a network of global chambers, how does it work and what achievements are attainable?
This network links all chambers around the globe through its website (worldchambers.com) and it is the sole portal, which was designed by commerce chambers.
The website extensively boost exchange of trade information between commerce chambers and member companies through a network of 14,000 chambers listed on the directory of commerce chambers.
The network (portal) helps commerce chambers around the globe to develop their tradition mission on how to boost commercial companies through provision of smart and coherent markets, points of contact with customers and potential suppliers, and development of business opportunities and deals.
The network also joins all commerce chambers in all continents in the global (chamber) network project where there are more than 10,000 participants whose names appear in the directory through which the portal allows them to have direct access to their counterparts around the world.

What advantages do members enjoy from the network (portal)?
Members have so many advantages and benefits, notably enhancement of trade exchange around the world and provision of business data and services to all chambers worldwide.

The ICC provides services to combat commercial crimes, what kind of criminal activities are covered by such services?
The ICC services cover a number of crimes related to commercial and economic activities, including marine piracy where the International Marine Bureau (IMB) was established in 1981 to track movements of ships around the globe and possible ship piracy and take necessary measures to minimize piracy acts.
The IMB issues quarterly reports on marine piracy news.
There are also crimes related to financial and investment fraud where the anti-commercial crime office (ACCO) plays a pivotal role to avoid financial and investments frauds.
The office saved companies and individuals billions of dollars in losses, which they could have sustained from possible fraud acts through providing its members with the newly-discovered criminal methods.
As regards commodity counterfeit crimes, the office of counterfeit commodities (OCC) conducts global investigations on counterfeit items and their distribution networks, gives guidance on commodity counterfeiters and their methods.
The office runs training courses to company employees on how to discover counterfeited commodities.
For the Internet crimes, a special section was created based on the growing complaints raised by companies on their exposure to crimes through their websites. Through the section, intruders (hackers) could be tracked down and sent to courts.

When was ICCSA established, and what are its views and objectives?
The ICCSA was established in 1975 to represent the interests of Saudi economy at the ICC and other international forums. It undertakes its activities under the umbrella of the Council of Saudi Chambers (CSC).
The vision of ICCSA is based on the fact that the Saudi business sector is an integral part of the global business sector and the ICC is considered a bridge that links between the two entities.
Therefore, it has become imperative to build bridges with counterparts at the global level aimed to bring knowledge, best practices and global systems into the Saudi business sector.
What goals and objectives the ICCSA pursues in the interest of promoting the private sector?
The International Chamber of Commerce Saudi Arabia (ICCSA) will intensely pursue maximum mobilization and utilization of the business sector in a bid to enhance its global role.
This is all the more essential considering the reputable status of the Paris-based International Chamber of Commerce (ICC), which plays an effective role in the global economic and business policies.
The formation of the ICCSA’s board of directors, which represents all major business sectors — whether industrial, financial, commercial or service — will ensure wider participation of such sectors in its activities.
The upcoming period will witness a major shift in the work of the ICCSA in the face of the existing economic challenges.
It will thus become an active platform to empower the Saudi business sector join global functions and provide a variety of insights in a manner that will, hopefully, serve the interests of business sectors in particular and the Saudi economy in general.

Do you have overseas participation in a way that could enhance trade exchange and transfer of expertise?
The ICCSA has participated in the world trade agenda (WTA) summit. which brought together key business leaders and decision-makers to lay down priorities of business sector for an active trade policy in the 21st century.
The ICCSA also joined the G20 countries as well as meetings of political and economic groups in Paris and Geneva, ICC and G20 Advisory Group which were convened and timed with Davos Forum 2014.
The ICCSA also participated in the 7th conference of the WCF, Mexico, and the 8th WCF in addition to regular meetings of the permanent members of ICC (twice a year), the international council of the international commerce chambers (twice a year), RCG/MENA (twice a year), WATAC (twice a year).
The ICC Saudi Arabia attends regular meetings of permanent heads of ICC, Regional Consultative Group and the General Council of ICC.


Iran sanctions shadow falls on smaller German banks

Updated 27 May 2018
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Iran sanctions shadow falls on smaller German banks

  • Some German companies plan to press on with Iran dealings
  • German exports to Iran rose 15.5 percent last year

Germany’s biggest lenders have shied away from business with Iran after past penalties for breaching US sanctions, but smaller banks have leapt on opportunities afforded by the nuclear deal rejected by Donald Trump.

There are just months to go until a November deadline issued by Washington after the US president abandoned a hard-fought agreement that loosened business restrictions on the Islamic Republic in exchange for Tehran giving up its pursuit of nuclear weapons.

But some firms plan to press on in their dealings with Iran despite the looming threat of penalties.

“We will continue to serve our clients,” for now, said Patrizia Melfi, a director at the “international competence center” (KCI) founded by six cooperative savings banks in the small town of Tuttlingen in southwest Germany.

The center, which supports companies operating in sensitive markets like Iran or Sudan, has seen demand “rising sharply in the last few years, from firms listed on the Dax (Germany’s index of blue-chip firms), from all over Germany and from Switzerland,” she added.

German exports to Iran have grown since the nuclear deal was signed in 2015, adding 15.5 percent last year to reach almost €2.6 billion ($3.0 billion) after 22-percent growth in 2016.

Such figures remain vanishingly small compared with Germany’s €111.5 billion in exports to the US — its top customer.

Nevertheless, the KCI will “wait and see what the sanctions look like” before turning away from Iran, Melfi said.

Already, firms dealing with Tehran must take great care not to fall foul of US restrictions.

Transactions are carried out in euros, and the KCI does not deal with businesses that have American citizens or green card resident holders on their boards.

What’s more, products sold to Iran cannot contain more than 10 percent of parts manufactured in the US.

One of the most important inputs for the business is “courage among our managers” given the high risks involved, Melfi said.

Germany’s two biggest banks, Deutsche Bank and Commerzbank, avoid Iran completely after being slapped with harsh fines in 2015 over their dealings there, with Deutsche alone paying $258 million in penalties.

DZ Bank, which operates as a central bank for more than 1,000 local co-op lenders, is withdrawing completely from payment services there, a spokesman told AFP.
That left KCI to seek out the German branch of Iranian state-owned bank Melli in Hamburg.

Even that linkage could break if Iran’s biggest business bank appears on a US list of barred businesses as it has before.

Meanwhile, among Germany’s roughly 390 Sparkasse savings banks, business with the regime is mostly limited to producing documents linked to export contracts.
“We will be looking even more closely at those” in the future, a person familiar with the trade told AFP.

Elsewhere in the German economy, the European-Iranian Trade Bank (EIH) founded in 1971 is another conduit to Tehran.

Also based in Hamburg, it for now remains “fully available to you with our products and services,” the bank assures clients on its website, although “business policy decisions by European banks may result in short term or medium term restrictions on payments.”

Neither does the Bundesbank (German central bank) believe that much has so far changed for business with Iran.

“Only the European Union’s sanctions regime will be decisive,” if and when it is changed, the institution told AFP.

Any payment involving an Iranian party would have to be approved by the Bundesbank if things return to their pre-January 2016 state.

German banking lobby group Kreditwirtschaft has called on Berlin and other EU nations to clarify their stance — and to make sure banks and their clients are “effectively protected against possible American sanctions.”

KCI’s Melfi said time is running out for EU governments to act.

“Many firms just want to stop anything with Iran, since they can’t calculate the risk of staying,” she noted.

On Friday for the first time since the Iran nuclear deal came into force in 2015, China, Russia, France, Britain and Germany gathered in Vienna — at Iran’s request — without the US, to discuss how to save the agreement.

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