Trade

Global Trade Review: BAFT Appoints Scott Stevenson as Senior Trade VP

Via Global Trade Review

BAFT (Bankers Association for Finance and Trade) has appointed Scott Stevenson as senior vice-president of trade, following the retirement of industry veteran Stacey Facter. 

Stevenson joins from AF Capital Partners, where he was a senior advisor providing expertise on structured and project finance for developing banks in emerging markets. 

He previously spent more than 14 years at the International Finance Corporation (IFC), including a role as senior global manager for trade and supply chain solutions, and has also held positions at International Financial Consulting and the World Bank Group. 

Stevenson was also previously regional head of financial institutions at Standard Chartered Bank in Singapore, and between 2017 and 2020 was chief executive of Savia Trade Management Company, an Africa-focused financial intermediary that directly targets smallholder farmers and agri SMEs. 

He takes over the role previously held by Facter, who stepped down after more than eight years in the position. Prior to that she worked in a variety of trade and securities roles at JP Morgan over a period of over 11 years. 

BAFT’s president and chief executive Tod Burwell hails Stevenson’s “wealth of experience in trade”. 

“His diverse geographic experience, coupled with his commercial banking and multilateral development banking background, is a great foundation to provide our members around the world with the insight, tools and resources they need to help them succeed in trade finance,” he says. 

BAFT Announces New Senior Vice President of Trade

BAFT has named Scott Stevenson as its new Senior Vice President of Trade. Stevenson will lead the association’s trade portfolio.

WASHINGTON – BAFT, the leading global financial services association for international transaction banking, has named Scott Stevenson as its new Senior Vice President of Trade. Stevenson will lead the association’s trade-focused policy, practices, and education initiatives, and will support its trade-related councils and committees.

“Scott has a wealth of experience in trade, and we are delighted to have him as a part of the BAFT team,” said Tod Burwell, President & CEO of BAFT. “His diverse geographic experience, coupled with his commercial banking and multi-lateral development banking background, is a great foundation to provide our members around the world with the insight, tools and resources they need to help them succeed in trade finance.”

Stevenson replaces Stacey Facter, who retired from BAFT in the same role overseeing all of the trade-related activities of the association. Prior to joining BAFT, Stevenson was a senior advisor for AF Capital Partners, which provided expertise in emerging market structured and project finance for development banking institutions. For two years, he consulted development banks and export credit agencies following a 17-year career at the International Finance Corporation (IFC) and the World Bank Group in various trade and investment project leadership roles. Before joining the IFC, Stevenson was the regional head of financial institutions at Standard Chartered Bank in Singapore. He earned his bachelor’s degree from Colgate University, and his MBA from York University.

BAFT Media Contact:
Blair Bernstein
Director, Public Relations
[email protected]
+1 (202) 663-5468

Currency Agnostic Blockchain Debuts for Global Trade

Commodities purchases worth around $43 million from Peru under the initiative of Mitsubishi Corporation (Americas) were made over multiple transactions using Skuchain’s currency agnostic blockchain for digital trade assets, which were used for payment through Mizuho Bank.

MOUNTAIN VIEW/SINGAPORE/TOKYO — Metal commodities worth around $43 million were purchased from one of the largest mines in Peru under the initiative of Mitsubishi Corporation (Americas). The purchases were made over multiple transactions using Skuchain‘s currency agnostic blockchain for digital trade assets that were used for payment through Mizuho Bank.

The digital asset issued by the buyer was a Distributed Ledger Payment Commitment (DLPC), a digital negotiable instrument with a full-fledged legal framework published by BAFT (Bankers Association for Finance and Trade), the largest trade association for transaction banking.

Skuchain’s blockchain managed the lifecycle of the digital asset from issuance to discharge and triggered secure payment instructions to Mizuho. This makes open account trade transactions frictionless and with a similar level of security as Letters of Credit, Guarantees and other traditional trade instruments, at a reduced cost.

Mitsubishi Corporation (Americas) appreciated the precise control this provides the company over its counterparty payments and seeks to expand the usage of blockchain managed DLPCs to underwrite its own transactions as well as encourage its customers to replace current trade finance instruments with the DLPC. By placing control over trade finance arrangements squarely in the hands of the enterprises that need it while tapping into vast pools of capital at banks and other financial institutions gives the company more liquidity and trading capacity.

“People have talked about Blockchain and supply chain for at least 5 years. We just moved past the talk stage to actually move thousands of tons of a physical commodity across 10,000 miles backed by bank-acceptable digital assets worth $43m on our blockchain and we did it faster, cheaper, and more secure than what came before,” said Srinivasan Sriram, Founder and CEO at Skuchain.

“We are very honored to collaborate with Skuchain and Mizuho Bank to conduct the first DLPC transactions in real trading. We would like to continuously pursue further opportunities to apply DLPC to provide better services to our customers and partners,” said Yuichiro Yoshinari, Director, Innovation and Design Thinking at the Silicon Valley Branch of Mitsubishi Corporation (Americas).

“We are honored to have conducted the first DLPC transactions with Mitsubishi Corporation (Americas) and Skuchain.  We would like to accelerate the improvements in our ability to provide services to meet customers’ diverse needs by utilizing cutting-edge technologies in trade finance,” said Yoshisuke Maeda, General Manager at Mizuho Bank, Global Transaction Banking Department.

Tod Burwell, President & CEO, BAFT stated “Digitization of trade requires standards as well as supporting legal framework.  We were delighted to work with our members to develop the DLPC for this purpose, and even more excited that this has been successfully put into practice to facilitate live transactions.”

About Mitsubishi Corporation (Americas) and its Silicon Valley Branch
Mitsubishi Corporation (Americas) is a wholly owned subsidiary of Mitsubishi Corporation, a global integrated business enterprise with 10 business groups that operate across virtually every industry. These include natural gas, industrial materials, petroleum and chemicals, mineral resources, industrial infrastructure, automotive and mobility, food, consumer, power, and urban development. The Silicon Valley Branch, which led this project, is an innovation hub that scouts and tests new technologies and startups to lead the company’s digital transformation. Learn more at https://www.mitsubishicorp.com/northamerica.

About Skuchain
Skuchain provides enterprises and banks a currency agnostic blockchain for global trade. Its platform powers value chains that leverage data and capital to achieve optimal resilience and flexibility. Skuchain’s solutions have been adopted across mining and minerals, food and agriculture, electronics, auto and finance in Asia, Europe and the US. Learn more at https://www.skuchain.com.

About Mizuho Bank
Mizuho Bank, Ltd. is a leading global bank with one of the largest customer bases in Japan, and an extensive international network covering financial and business centers around the world. Learn more at https://www.mizuhogroup.com/.

About BAFT
BAFT is the leading international financial services association whose membership includes large global and regional banks, service providers, and fintech companies headquartered around the world. BAFT provides advocacy, thought leadership, education, and a global forum for its members in transaction banking, including international trade finance and payments. For nearly a century, BAFT has expanded markets, shaped policy, developed business solutions, and preserved the safety and soundness of the global financial system.

BAFT, Trade Finance Groups Launch Report on Impact of LIBOR Transition

New report provides insight on the impact of LIBOR transition for banks and corporations in the trade finance industry.

WASHINGTON — BAFT, the leading global financial services association for international transaction banking, in collaboration with TXF Intelligence and Baker McKenzie today announced the publication of No More LIBOR: What Next for Trade Finance? This report explores the impending impact the cessation of LIBOR will have on trade finance. Using a mixed methodology that combined quantitative survey responses with detailed qualitative insights from banks and corporations between February and May 2021, this report sheds light on the industry’s transition priorities in the months leading up to LIBOR’s cessation.

“The goal of this research is to present the latest market trends surrounding the impending cessation of LIBOR across trade finance,” said Tom Parkman, head of research, TXF Intelligence. “The data presented provides an insight into prevailing sentiments across parts the banking and corporate world this critically important issue – research which to date, does not exist in the trade finance industry.”

The transition away from LIBOR will have a deep impact across the suite of trade finance products. In 2019, global trade flows totaled $18.1 trillion, with an estimated $9.77 trillion of that sum comprised of bank intermediated trade. Corporations surveyed in this research have reportedly made very little progress to successfully transition all of their LIBOR-linked exposures to a suitable alternative rate. Banks surveyed continue to stress the importance of transitioning to term rates for all currencies, but especially for U.S. Dollar. Banks cited the uncertainty and lack of clarity around the availability of term rates across currencies as a roadblock to effectively communicating a transition plan with corporate clients. Regulatory efforts are being made in the U.S. to assist the availability of the Term SOFR rate and more progress is expected soon. For example, on July 21, the Alternative Reference Rates Committee recommended conventions and use cases for employing the forward-looking Secured Overnight Financing Rate (SOFR) term rates that are expected to be formally recommended by the ARRC in the coming days.

“While LIBOR transition has often been regarded as a ’bank problem,’ banks tread a fine line between educating borrowers who may be less familiar with the issues around LIBOR transition and providing advice,” said Luka Lightfoot, partner, banking and finance, Baker McKenzie. “It is important that corporates and banks engage with each other to come to mutually acceptable solutions to the LIBOR transition challenge.”

“Banks should continue to track currency-specific transition deadlines, intensify internal system and process preparations, and enhance and tailor communication with corporate clients,” said Diana Rodriguez, vice president, international policy, BAFT. “Taken together, these steps will help to ease some of the uncertainty and pave a more solid path toward transition.”

To read No More LIBOR What Next for Trade Finance?, click here.

To read BAFT’s other resources on navigating the transition, click here.

BAFT Media Contact:
Blair Bernstein
Director, Public Relations
[email protected]
+ 1 (202) 663-5468

Trade Digitization in A Post-Pandemic World

New BAFT whitepaper analyzes the state of trade digitization at the end of 2020, the progress made during the COVID-19 pandemic and highlights necessary actions to ensure continued advancement

WASHINGTON – BAFT, the leading global financial services association for international transaction banking, in collaboration with the International Chamber of Commerce (ICC) and the International Trade and Forfaiting Association (ITFA) today announced the publication of a new whitepaper, Progress on Trade Digitization 2021. The whitepaper analyzes the state of trade digitization at the end of 2020, highlights progress made during the COVID-19 pandemic and proposes additional changes to ensure digitization’s continued and sustainable advancement.

According to a 2020 ICC Annual Survey, 54% of respondents revealed they introduced new digital solutions to address difficulties posed by COVID-19. These digital initiatives took various forms, including mobile network providers reducing fees, governments raising contactless limits to reduce in-person cash transactions and increased daily and monthly limits for users.

“While these digital developments in the wake of COVID-19 were incredibly helpful, our ultimate goal is to make positive changes that are sustainable long-term,” said Stacey Facter, senior vice president, trade products, BAFT. “To do that requires a legal environment that allows for digital documents to scale, as well as a global adoption of the standards in place today and continued support for those still under development. These are critical factors in maintaining the forward momentum of digitization.”

“The arguments in favor of digitization have been accepted by the majority of the world’s biggest trading nations but implementation still remains a work in progress,” said Sean Edwards, chairman, ITFA. “Fortunately, we possess the tools and resources to make this happen and the pace of change can be very quick with the right support.”

The whitepaper highlights six countries as case studies in how governments can implement reforms that harmonize their domestic legal frameworks with UNCITRAL’S Model Law on Electronic Transferable Records.

It also discusses the need for cross-industry, cross-technology platform-based standards to improve the effectiveness and efficiency of digital trade. The paper offers examples of standards available today and encourages stakeholders to consider how they can leverage them. For those interested in going a step further, the paper suggests participating in the creation of global standards through the DSI.

To read Progress on Trade Digitization 2021, click here.

BAFT Media Contact:
Blair Bernstein
Director, Public Relations
[email protected]
+ 1 (202) 663-5468

GSCFF Announces Update to its Standard Definitions to Include Description of Corporate Payment Undertaking

On January 28, The Global Supply Chain Finance Forum (GSCFF) announced plans to update its Standard Definitions for Techniques of Supply Chain Finance to provide further clarity on the distinctions between the individual techniques.

The Global Supply Chain Finance Forum (GSCFF) – comprising BAFT (Bankers Association for Finance and Trade ), FCI (previously known as Factors Chain International), the International Chamber of Commerce (ICC), the International Trade & Forfaiting Association (ITFA) and the Euro Banking Association (EBA) – today announced plans to update its Standard Definitions for Techniques of Supply Chain Finance (Standard Definitions) to provide further clarity on the distinctions between the individual techniques.

Alongside the existing Receivables Purchase and retitled Loan sub-categories, a newly created Advanced Payable sub-category now includes three techniques: Corporate Payment Undertaking (CPU), Dynamic Discounting (DD) and Bank Payment Undertaking (BPU).

This update highlights and confirms the quality of the original content – first published four years ago – and the need to be agile in a dynamic field such as supply chain finance. Thus, it is intended to reflect an up-to-date view of current market practices within supply chain finance, in particular by establishing greater clarity between the Payables Finance Technique under the Receivables Purchase category and the CPU technique.

CPU is a buyer-led program within which sellers in the buyer’s supply chain can, at their option, access liquidity by requesting a discounted early payment. However, unlike a Payables Finance scenario, the finance provider does not purchase the underlying receivable from the seller, but rather, fully relies on the buyer’s irrevocable payment undertaking.

Christian Hausherr, Chair of the GSCFF, and European Product Head of Payables Finance, Trade Finance & Supply Chain Finance at Deutsche Bank, says: “At the time of publication, the Standard Definitions were deemed to be complete and widespread acceptance of the terminology confirms their benefit for the wider industry. Today, the GSCFF aims to bring further clarity to the techniques, with new description of CPU, DD and BPU. Adapting to current business practices, these updates will continue to encourage greater adoption of the Standard Definitions by market participants.”

The first description document on CPU has also been released today, with subsequent documents on DD and BPU expected over the coming months. Each description document will provide an overview of the technique’s definition, involved parties, distinctive features and variations, relevant risks and benefits, among other technicalities. Once the series has been published, a final updated version of the master Standard Definitions document will be made publicly available.

To access the description document on corporate payment undertaking, visit our Library of Documents under the Industry Definitions and Guidelines section or click here.

About the Global Supply Chain Finance Forum:
The Global Supply Chain Finance Forum was established in 2014 to develop, publish and champion a set of commonly agreed standard market definitions for Supply Chain Finance (SCF). Comprised of trade bodies BAFT (Bankers Association for Finance and Trade), FCI (previously known as Factors Chain International), the International Chamber of Commerce (ICC), the International Trade and Forfaiting Association (ITFA) and the Euro Banking Association (EBA), the industry consortium leverages its collective footprint to aid the target audience of SCF in gaining clarity and consistency on the various terms and techniques used. The main objective of the GSCFF is to support the sustainable growth of supply chain finance by establishing consistency and a standardized understanding of SCF across the industry. Subsequently, the GSCFF strives towards acknowledgement of its definitions and their benefits by its target audience, especially on the regulatory side. The GSCFF monitors and reacts to major market developments in all relevant matters for SCF. It is open to financial institutions, non-FI finance providers, accounting firms, investors, rating agencies, regulators and corporates who have a stake in SCF.