Financial & Business Association
of Euro-Asian Cooperation
On January 27 Irina Gorbulina took part in the APEC seminar
On January 27, the representative of the FBA EAC in Australia and New Zealand, Irina Gorbulina, took part in the seminar "Promoting Cross-border Financing of Digital Trade", organized by the APEC Business Advisory Council (BAC).
The seminar was prepared by an initiative group of three economies: Thailand's National Digital Trade Platform (NDTP) (Thailand), Singapore's Networked Trade Platform (NTP) (Singapore) and Japan's TradeWaltz (Japan).
The seminar considered the results of a number of activities to verify the pilot project prepared by the group. This project included the introduction of standards for electronic commercial documents, electronic purchase order, electronic invoices and electronic packing lists. As well as the process of verifying the authenticity of the main documents for financing by banks. This initiative provides for three elements: (a) making laws, rules and regulations related to electronic trade documents and processes legally binding and binding; (b) agreement on common standards of interoperability between industries and trading partners; and (c) cooperation between stakeholders within and between trading partners. This year, the Council insists on more active participation of other APEC member countries in the APEC digital trade project, which currently involves only three economies: Thailand, Singapore and Japan.
Expansion of digital trade between APEC countries.
Despite significant progress in digital technologies, trade finance (and trade in general) to this day remains mainly a paper and manual process. The lack of uniform standards for trade documents in various economies is a serious problem, as it hinders the use of technologies such as artificial intelligence, distributed ledger, advanced analytics and the Internet of Things, among others, for digitization and automation on an end-to-end basis of various processes related to trade finance, including product selection, data entry, management workflow, document verification, compliance verification and authorization procedures after the transaction.
The lack of functional compatibility of the legal foundations of digital documents in different jurisdictions is also another important task. Uncertainty about the validity of electronic documents related to collateral or ownership rights in different jurisdictions leads to the fact that one still has to rely on paper documents, including digital documents, re-converted back to paper documents processed manually after crossing borders.
Various digitalization projects are emerging in each country, each of which operates according to its own rules, using its own practices and local participants. But today it is critically important that such platforms become compatible. This will help to avoid the spread of "digital fortresses", which will entail new costs, new barriers and new risks. The introduction of interoperable digitalization of trade finance will require the removal of key political and technical barriers, especially inconsistent and unclear legal regimes of digital documents and the lack of standards for documents in different jurisdictions. End-to-end digitalization of trade finance is especially important for micro, small and medium-sized companies (MSMEs), whose participation in global supply chains is important for them to increase their profitability and promote the economic integration of the region. Most MSMEs still depend on traditional paper document management in trade, which significantly increases their already high operating costs and increases the time required to process documents. It also complicates timely access to working capital.
In its report to the APEC Finance Ministers for 2019, the APEC Business Advisory Council invited countries to create a pilot project to digitize certain supply chains between three or more interested countries. This pilot project will help identify the main barriers and specific areas where reform is needed. For example, it is necessary to review existing mechanisms to facilitate the cross-border use of digital documents and legal rules for the recognition of digital signatures in documents on the transfer of digital title, as well as a number of other standards. In 2022, a pilot project was initiated to connect the National Digital Trading Platform of Thailand (NDTP) to the Singapore Network Trading Platform (NTP) and the Japanese TradeWaltz. The concept verification activities were successfully implemented in September and October 2022.
This pilot project provided for the introduction of standards for electronic commercial documents, electronic purchase order, electronic invoice and electronic packing list. This also included the process of verifying the authenticity of the main documents for financing by banks. This initiative is based on three elements: (a) the creation of laws, rules and regulations concerning electronic trade documents and processes that are legally effective and enforceable; (b) agreement on common interoperability standards between industry and trading partners; and (c) cooperation between stakeholders and trading partners.
The seminar considered the results of a number of activities to verify the pilot project prepared by the group. This project included the introduction of standards for electronic commercial documents, electronic purchase order, electronic invoices and electronic packing lists. As well as the process of verifying the authenticity of the main documents for financing by banks. This initiative provides for three elements: (a) making laws, rules and regulations related to electronic trade documents and processes legally binding and binding; (b) agreement on common standards of interoperability between industries and trading partners; and (c) cooperation between stakeholders within and between trading partners. This year, the Council insists on more active participation of other APEC member countries in the APEC digital trade project, which currently involves only three economies: Thailand, Singapore and Japan.
Expansion of digital trade between APEC countries.
Despite significant progress in digital technologies, trade finance (and trade in general) to this day remains mainly a paper and manual process. The lack of uniform standards for trade documents in various economies is a serious problem, as it hinders the use of technologies such as artificial intelligence, distributed ledger, advanced analytics and the Internet of Things, among others, for digitization and automation on an end-to-end basis of various processes related to trade finance, including product selection, data entry, management workflow, document verification, compliance verification and authorization procedures after the transaction.
The lack of functional compatibility of the legal foundations of digital documents in different jurisdictions is also another important task. Uncertainty about the validity of electronic documents related to collateral or ownership rights in different jurisdictions leads to the fact that one still has to rely on paper documents, including digital documents, re-converted back to paper documents processed manually after crossing borders.
Various digitalization projects are emerging in each country, each of which operates according to its own rules, using its own practices and local participants. But today it is critically important that such platforms become compatible. This will help to avoid the spread of "digital fortresses", which will entail new costs, new barriers and new risks. The introduction of interoperable digitalization of trade finance will require the removal of key political and technical barriers, especially inconsistent and unclear legal regimes of digital documents and the lack of standards for documents in different jurisdictions. End-to-end digitalization of trade finance is especially important for micro, small and medium-sized companies (MSMEs), whose participation in global supply chains is important for them to increase their profitability and promote the economic integration of the region. Most MSMEs still depend on traditional paper document management in trade, which significantly increases their already high operating costs and increases the time required to process documents. It also complicates timely access to working capital.
In its report to the APEC Finance Ministers for 2019, the APEC Business Advisory Council invited countries to create a pilot project to digitize certain supply chains between three or more interested countries. This pilot project will help identify the main barriers and specific areas where reform is needed. For example, it is necessary to review existing mechanisms to facilitate the cross-border use of digital documents and legal rules for the recognition of digital signatures in documents on the transfer of digital title, as well as a number of other standards. In 2022, a pilot project was initiated to connect the National Digital Trading Platform of Thailand (NDTP) to the Singapore Network Trading Platform (NTP) and the Japanese TradeWaltz. The concept verification activities were successfully implemented in September and October 2022.
This pilot project provided for the introduction of standards for electronic commercial documents, electronic purchase order, electronic invoice and electronic packing list. This also included the process of verifying the authenticity of the main documents for financing by banks. This initiative is based on three elements: (a) the creation of laws, rules and regulations concerning electronic trade documents and processes that are legally effective and enforceable; (b) agreement on common interoperability standards between industry and trading partners; and (c) cooperation between stakeholders and trading partners.