For over a year forwarders had been receiving requests to deposit higher security bonds to insure payments to the IATA CASS. This was caused by CASS managers being under strict instructions to require forwarders to increase security as there volumes returned to pre 2008-2009 economic slowdown levels.
FIATA efforts to overturn this administrative measure were initially frustrated, as IATA had in September 2009 realized an internal $ 15 million fraud in their settlement system, and the reaction of IATA management was to impose zero tolerance and remove local discretion from CASS managers, aggravating what forwarders felt were unreasonable and unjust bonding requirements.
During the 2010 FIATA World Congress in Bangkok, FIATA’s Airfreight Institute (AFI) arranged a strategic meeting with Mr. Des Vertannes the then newly appointed IATA Head of Cargo. The parties agreed that there was an urgent need to review and revise the existing Criteria for Registration and Retention of the European Air Cargo Programme (EACP) considering that the strict application of CASS Financial criteria had resulted in a situation where perfectly compliant forwarders had been required to provide additional security bonds.
Consequently a FIATA/IATA working group was formed with the remit to prepare a proposal to be submitted to the European Air Cargo Programme Joint Council (EACP- JC).
An initial draft proposal was presented at the Joint Council meeting held in February 2011.
The Joint Council Carrier members agreed that this was a good framework. However it was agreed that the document needed some further refining. The working group produced a final draft and this document was distributed to all airlines participating in the EACP prior to a special meeting of the Joint Council which took place in May 2011.
At this meeting the document was discussed and further minor changes were made.
The Joint Council unanimously accepted the final version of the new criteria which will become effective on July 1, 2011.
Under the new criteria there will be no more financial reviews of the intermediaries except in well-defined circumstances.
The settlement limit of an intermediary which exceeds its established monthly settlement limit will be automatically increased.
Finally, it has been agreed that any bank guarantees required of forwarders as a result of the previous established criteria would be released with immediate effect.
FIATA representatives to the working group considered the proposal a compromise document to bring immediate relief to an unreasonable and unjust situation. While the amended criteria still falls short of the ideal solution sought by FIATA, the new criteria will alleviate some of the presently existing inconsistencies.
28 June 2011