IATA Currency Clearance Service

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IATA Currency Clearance Service
Membership Orientation Phase 1
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ICCS Orientation

• ICCS in IATA
• Joining ICCS

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Contents

• ICCS in IATA
• Industry Financial Services
• Industry Cash Management Services
• ICCS
• Joining ICCS
• Terms Conditions Agreement
• Pricing side-letter

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Industry Cash Management ServicesMission
Statement

• To assist and support airline treasuries in
  meeting their corporate objectives in the areas
  of cash management and currency repatriation

www.iata.org/cashmanagement
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Industry Financial Services
Ayaz Hussain Director Industry Financial Services
Arnaud Francq Director Industry Payment Services
Card Services
Industry Clearing Services ICH, Revenue Acct.
IDFS Financial Control
IATA Prorate Agency
Airport,ATC Enhancement Financing Services
TONY PIETRANGELO Assistant Director Cash
Management Services
E-Invoicing Services
Remittance Settlement
TASF Travel Agent Service Fee
ICCS
Currency Coordination
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Industry Cash Management Services
IATA Currency Clearance Service (ICCS)
Currency Coordination (ICP)
Tony Pietrangelo Assistant Director, Industry
Cash Management Services
Martin Kaluschke Manager ICCS Operations
Amy Christopher Manager Currency Coordination
Lise Gagnon Assistant Director ICCS Financial
Services and TASF
Renata Oleksik Assistant Manager ICCS Operations
Marika Lindgren Assistant Manager ICCS
Operations
Amy Christopher Account Manager Industry Cash
Management Services
Montreal
Geneva
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Industry Cash Management Services - Contact
Details
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Industry Cash Management Services
ICCS

• Currency Coordination Activities
• A non-commercial activity, which co-ordinates and
  leads industry lobbying aimed at removing
  regulatory obstacles that prevent IATA Member
  Airlines from freely repatriating their worldwide
  sales proceeds.

• IATA Currency Clearance Service
• A global cash management tool that assists
  airline Treasuries to centrally manage their
  world-wide BSP, CASS, GSA and Credit Card sales
  proceeds.

Our Web Site www.iata.org/cashmanagement
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ICCS What we do

• Selected Qualitative Benefits
• An outsource solution for airline treasuries
• A natural extension of the BSP/CASS settlement
  process
• Centralised control of funds
• Advance notification of incoming funds
• Less time spent on international banking
  activities

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ICCS What we do

• Selected Quantitative Benefits
• Accelerated repatriations
• Optimum foreign exchange rates
• Interest paid on funds in transit
• Reduced FX exposure
• Reduced transfer charges
• Potential to close local bank accounts

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ICCS How we do it

• ICCS has a world-wide banking structure
• Local and central (London) bank accounts
• Standardised concentration of funds
• Interest remuneration at near money market rates
• Information Netting System (web-based software)
• Communications between airlines ICCS Operations
• ICCS Clearance Cycle
• Foreign Exchange (FX) Conversions

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1. ICCS - Worldwide Banking Structure
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2. ICCS - Information Netting System

• Citibanks CitiDirect web-based software free
  of charge user-friendly
• Communication link between ICCS airline
  treasuries
• Airlines can
• Receive notification of incoming funds
• Transmit currency orders to ICCS
• Download ICCS Final reports

CitiDirect
Funding requirements info
Pre-advise incoming funds
Orders
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3. ICCS Clearance Cycle

• Approximately 100 clearances per year
• Clearance calendar available in advance
• Facilitates cash forecasting

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• For example
• BSP Bahrain settles during ICCS Clearance 1208
  (12th clearance of 2008).
• On 31 January, the BSP Reporting Day, BSP Bahrain
  reports the amount of funds it will settle to
  ICCS (as well as non-ICCS airlines) on the BSP
  Settlement day.
• The approximate report (30A) is available to
  Members on 4 February (Order Day) and they have
  until 1900 (CET) to send any revised currency
  orders to ICCS. If not received, ICCS applies
  the default instructions on record. 4 February is
  also BSP Settlement Day, when the BSP settles to
  ICCS (as well as locally to non-ICCS airlines).
• On 5 February, Contract Day , ICCS trades its net
  currency positions with the service bank.
• On 6 February, Closing Day, the final report
  (30F), showing final funds flows and exchange
  rates, is available for download from the IN
  system by Members.
• Members receive funds in their bank accounts on 7
  February, Clearance Day.

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4. ICCS FX Conversions

• Foreign Exchange (FX) Conversions
• Neutral, Non-Speculative, Transparent, Auditable
• Based on highly competitive interbank, mid-point
  benchmark rates
• Presently using the CitiFX benchmark product
  offered by Citibank London Treasury
• Local FX conversion policies in place in
  countries with currency restrictions
• Note Airlines have complete flexibility on
  whether to convert funds through ICCS or take
  delivery of local currencies (dependant on local
  restrictions).

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GSA Funds Clearance Service

• This extension of the basic ICCS service
  facilitates the collection and repatriation of
  General Sales Agent (GSA) sales
• All of the established advantages of using the
  ICCS
• Further centralisation of foreign revenues
• More control over GSA collections remittances
• Accelerated clearance of GSA proceeds
• Less time spent on this time-consuming activity

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Credit Card Receivables Management

• All of the established advantages of using ICCS
• Further centralisation of foreign revenues
• Available customised solutions
• Collection of local currency settlements from
  local banks
• Collection of local currency settlements from a
  centralised source
• Currency conversions at optimum rates
• American Express and Euroline coverage

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ICCS On the move

• Future Goals / Projects
• Implement ICCS in all IATA BSPs/CASSes
  world-wide
• Further automate our systems to accommodate rapid
  rate of growth and limited staff resources
• Increase credit card receivables service coverage
  
• Introduce new products and services

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Industry Cash Management Services

• Additional Added Value
• Currency Matters
• The Industry Cash Management Services newsletter
• Circulated to over 350 airline Treasury
  Financial officers
• Industry Cash Management Services Annual Meeting
• The airline industry treasury conference
• Our Web Site www.iata.org/cashmanagement

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Contents

• ICCS in IATA
• Industry Financial Services
• Industry Cash Management Services
• ICCS
• Joining ICCS
• Terms Conditions Agreement
• Pricing side-letter

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Joining ICCS

• Sign the ICCS Terms Conditions Agreement
  Pricing side-letter
• Complete ICCS Standard Instructions
  documentation 7 pages
• Authorised officers list (pages 2 to 4)
• Standing default instruction for each currency
  (page 5)
• Bank account details (page 6)
• Letters to BSPs/CASSes (separate documents)
• ICCS Web Services Use and Registration
• ICCS Members Private Page
• ICCS Information Netting (IN) System

• Sign the ICCS Terms Conditions Agreement
  Pricing side-letter
• Complete ICCS Standard Instructions
  documentation 7 pages
• Authorised officers list (pages 2 to 4)
• Standing default instruction for each currency
  (page 5)
• Bank account details (page 6)
• Letters to BSPs/CASSes (separate documents)
• ICCS Web Services Use and Registration
• ICCS Members Private Page
• ICCS Information Netting (IN) System

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ICCS Terms Conditions

• The standard contract necessary to join ICCS
  outlining the general legal terms and conditions
  set forth by IATA and ICCS

• Membership and Scope
• Standard Instructions
• Responsibilities and Actions of both the Member
  and IATA
• Interest and Charges
• Netting
• Security
• Position of IATA

• Duties of IATA and Rights of Members
• Liability and Indemnity
• Extraordinary Events
• Termination, Suspension of Membership
• Exercise of Rights Waiver
• Communications
• Governing Law and Arbitration

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ICCS Pricing Side-Letter

• The ICCS Pricing Side-Letter covers
• Security
• Currency Conversion Rates
• ICCS Service Charge
• Attachments
• ICCS Standard Service Charge Schedule
• ICCS Policy for Currency Conversion Rates

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Joining ICCS

• Sign the ICCS Terms Conditions Agreement
  Pricing side-letter DONE
• Complete ICCS Standard Instructions
  documentation 7 pages
• Authorised officers list (pages 2 to 4)
• Standing default instruction for each currency
  (page 5)
• Bank account details (page 6)
• Letters to BSPs/CASSes (separate documents)
• ICCS Web Services Use and Registration
• ICCS Members Private Page
• ICCS Information Netting (IN) System

• Sign the ICCS Terms Conditions Agreement
  Pricing side-letter DONE
• Complete ICCS Standard Instructions
  documentation 7 pages
• Authorised officers list (pages 2 to 4)
• Standing default instruction for each currency
  (page 5)
• Bank account details (page 6)
• Letters to BSPs/CASSes (separate documents)
• ICCS Web Services Use and Registration
• ICCS Members Private Page
• ICCS Information Netting (IN) System

These steps are relevant upon membership.
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ICCS Operations Manual

• Dont forget that the ICCS Operations Manual
  contains comprehensive coverage of all the topics
  addressed herein and more!

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Contact Us

• Please do not hesitate to contact us should you
  have any questions.