SWIFT, the financial messaging provider for more than 9,700 financial institutions and corporations in 209 countries, and the Banking Commission of the International Chamber of Commerce (ICC) have signed a Declaration of Cooperation that will enable industry-wide adoption of the Bank Payment Obligation (BPO).
The ICC Banking Commission is a global rule-making body for the banking industry and a worldwide forum of trade finance experts whose common goal is to facilitate international trade finance.
The BPO will offer an alternative means of settlement in international trade and will provide the benefits of a letter of credit in an automated environment. It enables banks to offer flexible risk mitigation and financing services across the supply chain to their corporate customers.
Both ICC and SWIFT believe that by working together and leveraging their respective positions across the trade finance community, the BPO will have an important role to play in the development of international trade by addressing cost pressures in the face of increased automation and changes in the regulatory environment.
KahChye Tan, Global Head of Trade and Working Capital, Barclays and Chair of the ICC Banking Commission indicated: “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 small.
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.”
Gottfried Leibbrandt, Head of Marketing, SWIFT, further explained: “Industry forecasts indicate that merchandise exports will reach US$ 33 trillion by 2020, from US$ 6 trillion in 2000.
ICC and SWIFT are best positioned to help the banking industry facilitate further growth of trade using innovative solutions. SWIFT is committed to helping its member banks deliver innovation in trade finance to the corporate world.”
The declaration, signed at Sibos in Toronto, confirms the framework for collaboration between SWIFT and ICC to publish and maintain a set of contractual rules that will establish uniformity of practice in the market adoption of the Bank Payment Obligation (BPO) and the related ISO 20022 messaging standards.