A new online mechanism for trade settlement is to be launched in March 2002 by Bolero, the secure electronic platform over which trade data and documentation can be exchanged on the worldwide web. The system has been developed to improve the probability that the seller will be paid and the buyer will receive goods in a cross-border trade.

Called boleroSURF (Settlement Utility for Risk and Finance), the new mechanism aims to ensure that both parties to a trade have fulfilled their contractual obligations, allowing payment to take place and the goods to be delivered. Once a buyer and seller agree on the contractual terms, the necessary documentation is lodged with the SURF mechanism. Every stage of the transaction is then verified and validated.

Automated compliance checking

boleroSURF could be a significant advance towards moving cross-border trade online. It accommodates all methods of payment from open account to letter of credit (L/C) and running parallel to other elements in Bolero's infrastructure, users will be able to use electronic documents with automated compliance checking.

Bolero claims that using boleroSURF, the time taken to process a typical trade can be cut down from several weeks to less than a day. A further cash saving benefit claimed by the developers is that importers and exporters using the mechanism will be able to reconcile order against delivery data, improving inventory management and managing orders against settlements for cash optimisation.

White label

The boleroSURF solution also provides banks with what Bolero describes as a ready to go, off the shelf, "white label" solution for the offering of on-line credit and risk products to their customers. The new mechanism works in conjunction with the core Bolero messaging system that allows trade data and documentation to be exchanged online in a secure environment.

Bolero's Title Registry allows exporters and importers to transfer the ownership of goods on the internet while the proprietary Rulebook provides a legal framework that underpins the whole service.

L/C processing implications

The boleroSURF solution was the result of a year's consultation exercise involving Bolero members. Eight of the world's largest banks and a number of major multinationals and trading organisations, such as Samsung, Otto Versand and the Colombian Coffee Federation provided input into the product's development.

Trade financiers involved in the consultation have suggested that pending further evaluation, boleroSURF's automated document checking could radically streamline and significantly reduce errors in L/C documentary checking processes.

Because every stage of a transaction is automatically validated and all non-compliance is immediately notified, some conventional document checking operations could become redundant where the system is adopted.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.