SWIFT and ICC Banking Commission Collaborate on Rules for Trade Finance
SWIFT, the financial messaging provider, and the Banking Commission of the International Chamber of Commerce (ICC) are set to sign a co-operation agreement at Sibos in Toronto that will enable industry-wide adoption of the bank payment obligation (BPO). The BPO is an alternative means of settlement in international trade and provides the benefits of a letter of credit (L/C) in an automated environment. It enables banks to offer flexible risk mitigation and financing services across the supply chain to their corporate customers.
Both SWIFT and the ICC Banking Commission believe that by working together, they can achieve uniform adoption of the BPO, reducing costs and mitigating risks in international trade for buyers and sellers alike.
Kah Chye Tan, global head of trade and working capital, Barclays and chairman of ICC Banking Commission, said: “Trade finance is a critical banking service supporting the world economy. It is vital that the industry aligns on enhanced rules and tools in support of trading counterparties whether large or smaller. The ICC Banking Commission views the development of the BPO rules and the related ISO 20022 messaging standards as strong foundations for banks to provide modern risk and financing services aligned with today’s technology evolution.”