ICC training gives low down on revolutionary trade finance rules
Members of ICC’s Uniform Rules for Bank Payment Obligation (URBPO) Drafting and Education Groups converged in Paris last week to present the new rules that are set to revolutionize trade finance transactions.
Welcoming participants to the official launch and training session at ICC headquarters in Paris, Andre Casterman, Co-Chair of the ICC BPO Project and Head of Corporate and Supply Chain Markets at financial messaging provider SWIFT said: “The new BPO payment method responds to banking industry calls to examine how technology can be leveraged to dematerialize bank-to-bank flows so that banks can offer services to their clients without acting as document transferring couriers, a process that slows down trade transactions.”
Mr Casterman said that ICC’s binding URBPO were critical for protecting banks intermediating trade transactions using the BPO payment method.
“BPO is a new payment option that is easy to use by corporate clients and can be considered by buyers and sellers to enrich their relationships and to introduce as a payment term in contracts at transaction level,” he said. “The revolutionary aspect of the URBPO is that we are helping banks develop innovative services for their corporate clients while at the same time mandating both the use of specific standards and electronic matching in the bank-to-bank space.”
The BPO provides the benefits of a letter of credit in an automated and secured environment, and enables banks to offer flexible risk mitigation and enhanced financing services to their corporate customers.
Michael Quinn, Co-Chair of the ICC URBPO Education Group and Managing Director of Global Trade at JP Morgan said that the speed of trade, the complexity of supply chains and the reliance on information and data today is overwhelming. Mr Quinn told participants that over the last 10 years banks and corporates have become focused on financing liquidity down supply chains to ensure products can get to customers. The financial crisis forced a lot of companies to rethink their supply chain strategies and consider ways to ensure integrity down the chain while ensuring it remains liquid and appropriately protected. This, he said, had led to a convergence of corporate needs for supply chain financing with banks’ need to support them in this and an ambition to reduce paper handling so that greater focus can be put on risk mitigation and financing.
“The importance of collaboration among the banking community is paramount today. We have case studies where banks are successfully using BPO in situations where there is high volume import, short shipment time periods and a need to provide liquidity to suppliers who are providing relatively low-cost retail consumer type goods,” Mr Quinn said. “This provides us with excellent examples of how BPO is being leveraged to facilitate trade without getting bogged down in the processing of documents.”
Detailing each rule individually, the URBPO exclusive training session gave participants valuable insight from experts of the ICC URBPO Drafting Group into the Rules which will enter into force on 1 July 2013. The rules are currently available from the ICC Bookstore
To learn how the new BPO payment method will operate in practice, ICC also offers a new online training that takes participants from basic concepts through to a detailed analysis of the rules. For more information or to register visit URBPO online training
For further information, please contact
Policy Manager, Banking Commission
+33 1 49 53 29 76