We need to be able to see deep inside supply chains to know whether criminals are using trade finance to launder money says head of trade and supply-chain finance at the Asian Development Bank (ADB), Steven Beck.
Replacing paper trails with digital ledgers and QR (quick response) codes rich in information however will, he says in an analysis published in International Banker, transform trade by enabling transparency deep into supply chains to ensure they are resilient and ready to handle future challenges.
Work in progress
Making trade and supply chains more transparent will help fight crime, or even to track the illicit trade in animals or the use of underage and slave labour, says Beck, who adds that ADB is working with governments and banks across Asia to improve the transaction reports that help regulators and law enforcement identify illegal activities.
That work is aimed at both stopping crime and, importantly for banks already laden with red tape, simplifying reporting so that the burden on them is lessened, which, in turn, will hopefully facilitate greater support for small and medium-sized companies.
Common standards and protocols
In his analysis, Beck also discusses how all participants in the trade ecosystem – exporters, shippers, ports, customs, warehousing/logistics and importers – need to agree on the standards and protocols to underpin digitalisation.
The Digital Standards Initiative, created by ADB, the government of Singapore and the International Chamber of Commerce, is working on this now, in partnership with all stakeholders, he says.
Common standards are essential, and governments need to adopt laws recognising digital trade documents for digitalisation to materialise, he concludes.
Beck’s analysis, Making global trade and supply chains more resilient and socially responsible, published by International Banker can be found here.
Categories: Trade Based Financial crimes News