In this edition you will find a recording of our recent EACT in Action event, which featured 2021 EACT Award winners Deutsche Bahn. We are also privileged to feature articles covering technological readiness in the Czech Republic, the role of finance teams in the new normal, prioritisation strategies, how blockchain can help control of movement of liquid fuels across the supply chain and more.

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In this issue:

1.  EACT in Action Event: How to Streamline Customer Reference Data in Treasury Processes   Events–EACT in Action: KYC Webinar

2.  EACT Award 2021: And the Winner is... EACT Award 2021: And the Winner is...

3.  To be or Not to be in? That’s the Question for Cross-Border Payments with the UK   To be or Not to be in? That’s the Question for Cross-Border Payments with the UK (eact.eu)

4.  Problem of the Cross-Border Local Currency Payment Execution in Some “Exotic” Countries  Problem of the Cross-Border Local Currency Payment Execution in Some “Exotic” Countries (eact.eu)

5.  Crisis Coping Strategies  Crisis Coping Strategies (eact.eu)

6.  Beat Deadline Drama by Tackling the LIBOR Transition Today  Beat Deadline Drama by Tackling the LIBOR Transition Today (eact.eu)

7.  Schuldschein: Helping SITA Rebuild the Airline Sector  Schuldschein: Helping SITA Rebuild the Airline Sector (eact.eu)

The European Commission, the European Central Bank, as well as the European Banking Authority and the European Securities and Markets Authority have issued a joint statement on Libor transition.

THE STATEMENT CAN BE FOUND HERE

The authorities urge market participants to accelerate their transition efforts and reduce their exposures to all LIBOR settings and currencies to the best extent possible by 31 December 2021 – in particular by not using any Libor settings as references in new contracts anymore.

The authorities also highlight that any synthetic rates or statutory fallback rates should only be used when absolutely necessary for tough to transition contracts, rather than relying on such rates as solutions to Libor transition.

https://issuu.com/thinkpublishing/docs/act_the_treasurer_issue_2_2021

The Commission publishes a list of indicators to monitor progress towards the CMU objectives

The European Commission has published a list of indicators to help track capital markets' developments and measure progress achieved by the EU’s capital markets union (CMU) policy.

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EBA publishes final revised Guidelines on major incident reporting under PSD2

The European Banking Authority (EBA) published today its final revised Guidelines on major incident reporting under the Payment Service Directive (PSD2). The revised Guidelines optimise and simplify the reporting process and templates, focus on incidents with significant impact on payment service providers (PSPs), and improve the meaningfulness of the information to be reported.

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FSB statement on smooth and timely transition away from LIBOR

This statement encourages authorities to ensure that regulated entities align their use of new LIBOR contracts with the relevant timelines for the respective currency, regardless of where the trades are booked.

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Public country-by-country reporting by big multinationals: EU co-legislators reach political agreement

• Representatives of the Portuguese presidency of the Council today reached a provisional political agreement with the European Parliament’s negotiating team on the proposed directive on the disclosure of income tax information by certain undertakings and branches, commonly referred to as the public country-by-country reporting (CBCR) directive.

• Such practices are facilitated by the absence of any obligation for big multinational companies to report on where they make their profits and where they pay their tax in the EU on a country-by-country basis.

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The Financial Stability Board (FSB) has issued a statement on LIBOR transition looking ahead to the 31 December 2021 deadline.

The statement can be found here.

Alongside the statement the FSB has published an updated transition roadmap that provides an overview of useful transition steps.  

Likewise, the FSB has published two papers to help firms with their transition efforts. One paper that covers the various overnight RFRs and term rates (here) and one that delves into the use of the ISDA spread adjustments for cash products (here).

Tarek Tranberg
Head of Public Affairs & Policy
European Association of Corporate Treasurers – EACT

E tarek.tranberg@eact.eu   L: LinkedIn

SMURFIT KAPPA WINS INAUGURAL IACT TREASURY AWARD

IACT is delighted to announce Smurfit Kappa as the winner of the inaugural IACT Treasury Award. The submissions were reviewed based on 6 criteria: innovation, reach, ESG, excellence, economics and inspiration.

The Smurfit Kappa Treasury team which was supported by Matheson on the legal side has been announced as winner for arranging its first sustainability linked loan for €1.35bn, whilst setting new targets to reduce its carbon footprint, water use and establish a more diverse workforce.

Smurfit Kappa has displayed highly responsible industry leadership from many perspectives, including through its core belief in the importance of sustainability achieved through its circular business model. Their forward thinking and innovative RCF amendment demonstrates how Treasurers can fulfil their funding requirements at optimal cost while having a positive impact on the world. For the Smurfit Kappa team, their additional motivation included:

(1) providing clear evidence to customers, investors, employees, affected communities and suppliers of the determination of Smurfit Kappa’s senior management to prioritise stated ESG goals and KPIs;

(2) linking ESG KPIs with a reduced cost of funding would have a powerful effect on achieving maximum ESG “buy-in” across the business; and

(3) setting an example for other Corporates with ambitious ESG goals and clearly defined KPIs to request similar provisions from their banks, thereby magnifying the positive ESG impact of the initiative beyond its immediate context

More information relating to the RCF amendment, such as the relevant syndicate of banks, the new interest rate adjustment provisions agreed in December 2020, Smurfit Kappa’s five ESG related KPIs and the global geographical reach of those KPIs are included in a Global Capital article “Smurfit Kappa seals five green promises with loan”

Smurfit Kappa is a global leader in the design, manufacture and supply of sustainable paper-based packaging. It has 46,000 people working at more than 350 production sites in 35 different countries. It is listed on the UK’s FTSE 100 index and last year its revenue topped €8.5 billion.

The IACT has nominated the Smurfit Kappa deal to represent Ireland at the European Association of Corporate Treasurers (EACT) Awards to be held in June. The EACT is the representative association for Treasury Associations across Europe.

The formal prize giving of the IACT award will take place later this year.

To view the latest EACT regulatory report click here HERE