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Copyright © International Chamber of Commerce (ICC). All rights reserved.
( Source of the document: ICC Digital Library )
In In this issue, we've taken a new tack in one of our regular features, the Insight interview. Instead of interviewing only one L/C expert, we've interviewed three, this time on a subject of growing importance - electronic trade today and tomorrow. It's a subject we've covered before, but never in this much depth.
Our three experts explode a few myths. The first is that paper documentation is on the way out. It clearly isn't, at least not yet. John Ahearn from Citi Global Transaction Services puts it clearly: "If banks start using electronic documents while everywhere else there's a need to present paper documents, that will not be enough to drive the change."
At the same time, it's clear that technology has produced some significant changes in the recent years. According to Ashutosh Kumar of Standard Chartered Bank (Asia), "With technology you can receive more information in a much more proactive, robust and structured manner." But he adds that while technology has made the business more scalable, "it has not really changed the business."
All of this makes us cast a sceptical eye on the predictions of experts going back years who've claimed that electronic documentation would shortly take over the field. The message from our interviews is "not until we see more harmonization and standardization". In that connection, there are two developments to watch. The first concerns possible changes in Customs. As John Ahearn says: "If Customs says the only way you can have goods cleared is to present documents electronically, people will start doing that."
The second is the ICC/SWIFT cooperative effort to develop rules for the Bank Payment Obligation (BPO). Both SWIFT and ICC are respected players in the field, and if they jointly come up with standards to harmonize electronic transactions, we could see some real movement. DCInsight will, as always, keep you in the picture.
Ron Katz Editor