Tech News, Magazine & Review WordPress Theme 2017
  • Home
  • Supply Chain Updates
  • Global News
  • Contact Us
  • Home
  • Supply Chain Updates
  • Global News
  • Contact Us
No Result
View All Result
No Result
View All Result
Home Supply Chain Updates

Exclusive: IATA faces legal backlash over ‘dangerous’ CASS irregularities

usscmc by usscmc
November 14, 2019
Exclusive: IATA faces legal backlash over ‘dangerous’ CASS irregularities
Share on FacebookShare on Twitter

International-Air-Transport-Association-IATA
By Alex Lennane

14/11/2019

IATA could face a serious backlash from CASS payments system participants – as well as financial supervisory authorities – over allegations of financial irregularities. 

IATA has been reported to German financial authority Bafin over potentially significant issues in its CASS system. 

It is claimed that IATA is advancing funds, but has not been enabling CASS members to see any exposure to risks.

This has been called “a serious problem”, and “dangerous” to CASS participants.

It is also unclear whether IATA has the correct licence to offer credit, a highly regulated part of the financial industry.  

A third complaint suggests CASS participants do not know the costs they are obliged to pay for IATA’s credit facility, which only benefits airlines. 

The complaints stem from a case in the summer in which a freight forwarder failed to pay its settlement to IATA.

Nevertheless, IATA paid the GSSA involved, which then booked more capacity on an airline for the forwarder. The GSSA only found out three months later that the forwarder had not settled – but IATA had advanced the funds anyway. 

In a letter to Bafin, seen by The Loadstar, the GSSA wrote: “IATA had advanced covering funds for three months, masking the increasing monthly bad debt as the agent continued to be supplied by us with air waybills. IATA had not, until we argued, even allowed us or other agents to view any of these reports. 

“At the third month, IATA informed us that it would be reducing the amount it settles to us from all other airlines in CASS by the amount not collected (but hidden by their credit advancing), from the non-paying forwarder. It calls this ;claw back’. 

“We have therefore been exposed to losses over three months by the combined effects of being denied visibility and IATA’s advancing of unknown credit to the system, covering up for the forwarder.  

“Obviously if we hadn’t seen the money arrive in month one, we would have stopped two months earlier.” 

While IATA backtracked on the lack of visibility following the initial complaint, the transparency still leaves a lot to be desired. Before IATA moved its CASS operations to Madrid, companies received a fax each month showing any non-settlements. 

“I have the ability to see [who has paid] now,” said the GSSA. “But it’s laughable. You get an email noting that ‘something has changed’ – but you can’t see what it is. You have to log on, download an Exel file and format it to see what is going on.

“This is not how it should be. It should be easily accessible.” 

The credit funds came from IATA’s clearing banks, in what are known as “hinge” accounts, with overdraft facilities, interest and other associated charges, alleges the complaint.  

The costs of CASS are divided between participants, but, said the GSSA, “we are paying the interest and bank fees along with the airlines – but only the airline could possibly benefit”. 

While the initial case centres on Germany, sources say they suspect the problem is global – except in Greece, where IATA had admitted that it had taken a credit risk view and chosen not to advance credit there. 

IATA‘s act of incorporation states: “Nothing in this section shall be deemed to authorise the association to issue any note payable to the bearer thereof, or any promissory note intended to be circulated as money, or as the note of a bank, or to engage in the business of banking or insurance”. 

However, the letter to Bafin claims IATA “operates a CASS system that advances many millions, charges interest all have to cover, makes its fees doing that too, and takes credit risk decisions”. 

It adds: “They are in need of proper inspection, licensing and probably a significant fine, as they have been told about this and refuse to change because the airlines like it, and so does IATA”. 

The letter alleges: “IATA is therefore knowingly abusing its position as a settlement system provider to become a commercial credit provider in large scale.” 

The GSSA is being represented by the Federation of Airline General Sales Agents (Fedagsa).

Glenn Shires, general secretary, urged IATA to respond with information on its ability to advance credit legally, the transparency problems in CASS and the potential costs to “participants of a credit facility which only benefited airlines”. He said he had not had a satisfactory response, in particular over the legality of IATA offering credit. 

He told IATA: “This is seriously a problem and needs resolving before it becomes widespread and the industry uses other safe means for moving its payments.” 

The issue is expected to be reported to the financial supervisory authority of several countries, including the UK. Fedagsa is also looking into filing a complaint in the US, which could involve the Department of Justice, which has the ability to imprison wrong-doers.   

Despite repeated requests by The Loadstar over the past two weeks for a response to the allegations, IATA has failed to comment or explain its actions. However, shortly after this article was published, it said: “We are confident that CASS is fully compliant under applicable EU law and we will be happy to engage with any regulators seeking information.” But it failed to address the detailed list of questions posed.

The GSSA told The Loadstar: “They don’t really give a shit. But it’s the principle, and I am not afraid to fight big companies.”

The GSSA is looking to file a lawsuit as well. 

usscmc

usscmc

No Result
View All Result

Recent Posts

  • Volkswagen Announces Pricing of 25% Equity Stake Sale in Porsche
  • Can software simplify the supply chain? Ryan Petersen thinks so
  • A strategic approach to cost reduction for banks and fintechs
  • Study examines supply chain issues and opportunities
  • Instacart acquires hyper local grocery e-commerce platform

Recent Comments

  • Top 5 Supply Chain Certifications that are in high demand | Top 5 Certifications on Top 5 Globally Recognized Supply Chain Certifications
  • 3 Best Procurement Certifications that are most valuable | Procurement Newz on Top 5 Globally Recognized Supply Chain Certifications

Archives

  • September 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • September 2019

Categories

  • Global News
  • Supply Chain Updates

Meta

  • Log in
  • Entries feed
  • Comments feed
  • WordPress.org

slot gacor slot slot gacor 2023 slot 2023 slot gacor terbaru slot gacor terpercaya slot gacor slot gacor slot slot gacor 2023 slot 2023 slot gacor terbaru slot gacor terpercaya slot gacor slot gacor slot slot gacor 2023 slot 2023 slot gacor terbaru slot gacor terpercaya slot gacor

Pages

  • Home
  • Terms of Use
  • Privacy Policy
  • Disclaimer
  • Antispam
  • Contact Us

Categories

  • Global News
  • Supply Chain Updates
slot gacor slot slot gacor 2023 slot 2023 slot gacor terbaru slot gacor terpercaya slot gacor slot gacor slot slot gacor 2023 slot 2023 slot gacor terbaru slot gacor terpercaya slot gacor slot gacor slot slot gacor 2023 slot 2023 slot gacor terbaru slot gacor terpercaya slot gacor

Tags

APICS Globally Recognized Supply Chain Certifications IIPMR Certifications International Institute for Procurement and Market Research (IIPMR) ISM Next Level Purchasing Top 5 Supply Chain Certifications top supply chain certifications

Trending

No Content Available
  • Antispam
  • Contact Us
  • Disclaimer
  • Home
  • Privacy Policy
  • Terms of Use

© 2023 www.usscmc.com

No Result
View All Result
  • Home
  • Supply Chain Updates
  • Global News
  • Contact Us

© 2023 www.usscmc.com

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Cookie settingsACCEPT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled

Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.

Non-necessary

Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.

SAVE & ACCEPT