TFP Annual Event and Awards Ceremony 10

NEWS EBRD wins top industry awards _08 IN DEPTH The green island: Taiwanese eco-products _16 TRAINING TFP London Forum _24 Trade Exchange

THE BIANNUAL MAGAZINE ALL ABOUT THE EBRD’S TRADE FACILITATION PROGRAMME AUTUMN-WINTER 2014

TFP Annual Event and Awards Ceremony _10

THE TFP in facts and ﬁgures _09 _ _ _ 02 3 INSIDE 10-15 03

Trade Exchange 10-15 EDITOR’S THIS YOUR TEAM LETTER ISSUE

Executive Editor Kamola Makhmudova This past year, 2014, has been a challenging year due to the geopolitical [email protected] situation in the EBRD region. Here in the TFP team we have carried on 07 supporting important trade transactions and continuing our popular Editor Hannah Fenn capacity building projects. Check out our news section to read about our [email protected] exciting Trade and Investment Forum in London, and conferences in Georgia, Kiev and Tunis. TFP Picture Editor SPECIAL Dermot Doorly For our Expert Insight view we were fortunate to receive a contribution CIAL TFP AWARDS [email protected] from one of Europe’s leading specialists of trade finance guarantees, 10 Andrea Hauptmann. In her article she tells us how to ensure demand Production Editor Dan Kelly guarantees are lodged successfully – especially important given the current NEWS TRAINING [email protected] economic climate. And on page 20 Hannah Fearn and Geoffrey Wynne _04-09 Connect with 13 6_22-27 TFP on of law firm Sullivan & Worcester talk us through the pros and cons of the Read about the latest Facebook, Find out about the TFP workshop at the Contributors bank payment obligation, a new electronic trade tool, comparing it with the Transition Report LinkedIn Joint Vienna Institute and our series of and our conferences and Twitter workshops on ISBP provisions. (in addition to those already traditional letter of credit. _ acknowledged): Vincent O’Brien, in Georgia, Kiev PAGE 08 Ken Pasternak, Svitlana Pyrkalo, Warsaw was the backdrop for this year’s TFP Annual Event and Awards and Tunis. Marco Nindl, Brian Chin, Bill Huang, Ceremony that took place in May. Turn to page 10 for a list of the most active Maria Mogilnaya, Philippa Moore, Yi-Nung Tsai, Irina Tyan, Sara Velco issuing and confirming banks in 2013, and a photo report of the ceremony. As the world embraced football fever this summer during the FIFA World Images: EBRD and image libraries 18 Designed by: Blackwood Creative Cup, we asked our pioneering Taiwanese colleagues to share their innovative Printed by: Park Communictions ideas. Read about the “green island’s” eco-industry on page 16. Published by: EBRD Communications We would also like to take this opportunity to thank our IN DEPTH One Exchange Square, partner banks, confirming banks, students, consultants London EC2A 2JN _16-21 United Kingdom and colleagues in the EBRD for helping us deliver over Tel: +44 20 7338 6000 Get some expert tips Fax: +44 20 7338 6100 the past year the excellent service that warrants industry on how to lodge a awards from the readers of Trade Finance magazine, successful demand, Global Trade Review and Trade & Forfaiting Review. It is and learn about the a humbling acknowledgment. new electronic trade tool, the Bank Payment On behalf of the TFP team I would like to send 16 Obligation. 22 Missed or misplaced season’s greetings to all readers of Trade Exchange. May Trade Exchange? 2015 be a happy and peaceful year for all of us! You can now download back issues from December Mirjana Zalar TFP website 2011 onwards at G E T I N Tel: +44 20 7338 7762 www.ebrd.com/tfp www.ebrd.com/tfp Email: [email protected] TFP e-Learning Programme: ebrd.coastlinesolutions.com Subscriptions TOUCH Rebecca Franklin Suknenko and feedback Tel: +44 20 7338 6476 www.ebrd.com Banks interested in Email: [email protected] European Bank for Reconstruction and Development (EBRD) participating in the © EBRD 2014. All material is strictly copyright Kellie Childs One Exchange Square and all rights are reserved. Reproduction in Trade Facilitation Tel: +44 20 7338 6991 London EC2A 2JN whole or in part without the written permission of Programme (TFP) can Email: [email protected] United Kingdom EBRD is strictly forbidden. The greatest care has Kamola Makhmudova, contact us at the address Tel: +44 20 7338 6000 been taken to ensure accuracy of information Executive Editor in this magazine at the time of going to press, below or email us at Importers and exporters should Trade Exchange is sponsored by Fax: +44 20 7338 6119 but we accept no responsibility for omissions or errors. The views expressed in this magazine are [email protected] [email protected] contact an issuing bank. TaiwanBusiness-EBRD TC Fund © All figures are as of October 2014 not necessarily those of EBRD. NEWS UPDATE _EVENTS

_04 NEWS _05 UPDATE

TBILISI CONFERENCE. The launch of the Transition OPINION. Report at the EBRD headquarters, London “As firms move TFP organises first along their Caucasus Trade Finance transition path, Conference in Georgia so will the International trade is growing rapidly in countries in Armenia, Azerbaijan and Georgia, which means that trade finance is becoming which they are ever more important. That’s why the EBRD organised its first Caucasus Trade based. The Finance Conference to unite issuing and confirming banks active in the region as overall message well as decision-makers in trade finance to discuss industry challenges with leading of this year’s specialists, including regulators and economists. Transition The event was held on 25 June in Tbilisi at the historic TBC Bank Report is a headquarters and was opened by Otar Nadaraia (Deputy Chairman of hopeful one.” National Bank of Georgia), Mariam Megvinetukhutsesi (Deputy CEO INNOVATION IN TRANSITION. Erik Berglof, EBRD Chief Economist at TBC Bank) and Bruno Balvanera (EBRD Director for Caucasus, Moldova and Belarus). This was followed by a EBRD report on how firms can Trade finance colleagues from Armenia, Azerbaĳan, presentation by the International Chamber Georgia, Germany, Turkey and Uzbekistan “I am sure the of Commerce Paris on the results of their transform economies latest 2014 global survey on trade finance, commercial banks are not able to provide conference was very and then panel discussions covering the support in their trade finance operations, useful for all The EBRD’s 2014 Transition Report, titled A key theme of the report is that, regardless latest trends and challenges in Armenia, the EBRD’s TFP will try to fill the gaps and “Innovation in Transition”, focuses on how individual of a country’s level of economic development Azerbaijan and Georgia. The conference support the further growth of trade. participants as it companies across the transition region innovate. and of its progress along the transition path, was closed with an award ceremony for Apart from the informative involved the exchange The report reveals how innovation can help increase firm managers can make decisions that have a students of the EBRD Trade Finance presentations and lively panel discussions, firm productivity, boost economic growth and re- profound influence on the efficiency and e-Learning Programme. participants particularly enjoyed the of ideas on the energise transition. productivity of the businesses they run. Yet, networking opportunities. One delegate, most current and The report takes a broad view of innovation which actions are most beneficial – research AN UPWARD TREND Zara Melkonyan, Head of International – by using a unique enterprise survey it analyses and development, adopting products that were The conference has shown that there are Department at Araratbank, Armenia, relevant topics.” how firms innovate by introducing new products, developed elsewhere, or improving management a lot of opportunities for local banks and enthused: “The Caucasus Trade Zara Melkonyan, Head of International new production processes, new ways to organise practices – depends strongly on the business companies to become even more active Finance Conference was a real success, Department at Araratbank, Armenia themselves, and new ways to market their environment in which a firm operates. Governments in trade finance. But what also emerged as is always the case with the EBRD’s events. products and services – and whether they do this can do a great deal to unleash this potential, was that increased capital requirements of I am sure the conference was very useful for by adopting products and technologies from but in order to determine the right measures for foreign confirming banks have a negative all participants as it involved the exchange advanced economies or by developing new any given country they must work closely with the impact on the availability of trade finance of ideas on the most current and relevant products and processes themselves. private sector.O for some banks in the region. The general topics, which is of high importance in light of The report also takes stock of firms’ investments trend is that trade finance activity is today’s changing international environment in research and development and provides new picking up and local banks in Armenia, and the situation in the region.”O insights into how managerial practices influence For more information please go to Azerbaijan and Georgia are able to increase firm productivity. http://tr.ebrd.com their trade finance volumes. And where www.ebrd.com/news NEWS UPDATE _EVENTS

_06 _07

KIEV CONFERENCE. TRADE AND INVESTMENT FORUM, TUNIS. Hope for Promoting trade Ukrainian trade in Tunisia As part of its drive to support the Tunisian as EBRD economy, the EBRD organised a one-day Future Events Trade and Investment Forum in Tunis on 22 October 2014. Trade Finance e-Learning boosts support Around 100 representatives from local and Programme Graduation Ceremony foreign commercial banks, corporates, SMEs MARCH 2015. The EBRD’s Trade Facilitation Programme teamed and business associations attended the event. Luca Vincenzo Rossi awards top students with the MINSK, BELARUS opportunity to train at Landesbank Baden-Wuerttemberg up with Worldwide Expert Conferences for their The Forum offered a unique chance to learn The EBRD Trade Finance e-Learning first joint annual event on 30 September–1 October about investment opportunities in the southern cooperation can add value to investments Programme Graduation Ceremony will in Kiev. Many industry experts from 12 countries and eastern Mediterranean (SEMED) region, through activities such as policy dialogue, take place during the Trade Finance in CIS ranging from Canada to Japan attended to meet, and in Tunisia in particular, and to share trade legal reform, training programmes and event organised by Worldwide Expert on exchange views and hear about the situation in finance banking expertise. project preparation. 19-20 March 2015. All students who have Ukraine. The event was opened by Marie-Alexandra The two panels – one on financing imports successfully completed the programme by The TFP currently works with eight local banks Veilleux-Laborie, Head of the EBRD’s Resident into Tunisia and the other on supporting intra- 15 January 2015 will be eligible to attend. in Ukraine, and over 100 more around the EBRD Office in Tunisia, and by FIPA Tunisia’s Khalil regional trade – discussed the country limits Contact the EBRD TFP team for more information. Networking at the Worldwide region, to enable its private corporate clients to Expert Conference Laabidi, who thanked the EBRD for extending its availability and the role the EBRD’s TFP could continue international trade. At the time of writing, investments through 9 strategic projects in the play in facilitating the import/export operations ICC Banking Commission Meeting the TFP has supported trade transactions worth last 12 months. of Tunisian companies. 2024 APRIL 2015 €1.5 billion in Ukraine, of which over €175 million “We believe that by the end of this year The morning session was dedicated to The Forum provided not only a great SINGAPORE, SINGAPORE has been processed in 2014. investment opportunities with the EBRD in key networking opportunity, but also a chance for Contact Paulina Martinez at paulina.martinez@ But, as in other sectors, the EBRD is increasing Ukraine will become one of the largest strategic sectors – agribusiness, manufacturing some to shine, as the first Tunisian graduates of iccwbo.org for more information. its engagement in trade finance in Ukraine. Head of beneficiaries of the EBRD’s TFP” and services, and small business support the EBRD Trade Finance e-Learning Programme the TFP, Rudolf Putz, explained: “We are working (where the EBRD has supported more than received their certificates of achievement. to up the number of local banks with whom we crisis and an energy supply crisis all at the same 100 projects since it established its presence Of the five graduates, Kameleddine Limam cooperate, and we believe that by the end of time, each of which would represent a very serious in the country). and Sami Slama of Amen Bank were named this year Ukraine will become one of the largest issue in any country. So Ukraine’s resilience is The afternoon focused on facilitating trade top students, and were awarded the prize of countries for the EBRD’s TFP.” admirable, and this really puts a heavy responsibility with Tunisia and capacity building projects. a week’s on-the-job training at Landesbank He went on to say that “in Ukraine we want to on our shoulders to rise to the occasion – while not Attendees heard how the EBRD’s technical Baden-Wuerttemberg.O support medium-sized transactions with tenors of compromising our sound banking and transition EBRD Annual Meeting and up to one year primarily, but we can also facilitate mandate.” Business Forum up to three years on a case-by-case basis, and Regarding trade finance, he added: “The TFP has 1415 MAY 2015. provide additional trade finance limits and share been an important tool in strengthening the ability TBILISI, GEORGIA risk for Ukraine in conjunction with other IFIs.” of local banks to provide trade finance and in giving Francis Malige For more information, visit: www.ebrd.com/am. A priority area now for the TFP is energy speaking at the local SMEs the support they need to sustain their efficiency – for example by supporting the import of conference export and import businesses. The TFP recently TFP Annual Event and Awards energy-efficient equipment, such as modern tractors extended its award-winning e-Learning Programme Ceremony for agriculture and equipment for renewable energy to all partner banks in Ukraine with the support 13 MAY 2015. generation. Representatives of several credit of donor funds from EBRD shareholder TBILISI, GEORGIA export agencies expressed an interest in governments.” The TFP’s Annual Event and Awards Ceremony supporting such imports. Trade finance is one of many sectors in will take place in Tbilisi a day before the Newly appointed EBRD Managing which the EBRD is supporting its clients EBRD Annual Meeting and Business Forum Director for Ukraine, Moldova, Belarus through difficult times and to better prepare (see above). The TFP event will also host and the Caucasus, Francis Malige, dynamic private enterprises for when an awards ceremony for the most active summed up the situation for Trade growth will return. The Bank aims to have participating banks of 2014. Attendance by Exchange: “Ukraine is facing severe invested about €1 billion this year Tunisian graduates invitation only.O recession, a geopolitical crisis with a in Ukraine.O receive their certificates of achievement Contact the TFP team for more information. military conflict, a banking system www.ebrd.com/news NEWS UPDATE NEWS UPDATE _INDUSTRY AWARDS _FACTS & FIGURES

_08 _09 CONFIRMING BANKS OPERATE IN 88 COUNTRIES PRESS TALK. Facts “The EBRD has once again been voted the best & figures development bank in trade. It’s no mean feat, when you A brief history consider the amount Launched in 1999, the Trade of development Facilitation Programme (TFP) finance in the aims to promote foreign trade TOP 10 CONFIRMING BANKS market over the past January-October 2014 to, from and among the EBRD few years. But the Bank Country EBRD has continued countries of operations through 1 Commerzbank Germany a range of products. 2 Unicredito Italy to stay ahead of 3 BHF-Bank Germany the pack through 4 UBS Switzerland 5 KBC Bank Belgium the broad range of Through the Programme, the 6 WGZ BANK Germany its funding and its EBRD provides guarantees to 7 Raiffeisen Bank International Austria TOP 10 COUNTRIES Marco Nindl and Kamola Makhmudova 8 ABN Amro Netherlands BY NUMBER OF admirable focus on receiving the award from Peter 9 Deutsche Bank Germany Gubbins, Managing Director of GTR international confirming banks TRANSACTIONS financing renewable 10 ING Bank Netherlands and short-term loans to selected January-October 2014 and clean energy projects.” issuing banks and factoring Country companies for on-lending to TOP TEN TFP 1 Russia Global Trade Review TOP INDUSTRY AWARDS 2 Ukraine TRANSACTIONS 3 Armenia local exporters, importers No of transactions and distributors. BY INDUSTRY 4 Belarus EBRD wins January-October 2014 5 Georgia 6 FYR Macedonia 48 7 Moldova Product/Industry 63 8 Azerbaĳan major accolades 9 Kazakhstan Vehicles and spares 62 NUMBER OF CONFIRMING 330 10 Serbia BANKS OPERATING The EBRD’s Trade Facilitation Programme has scooped three Industrial equipment 70 IN 88 COUNTRIES major industry awards: “Best Development Bank in Trade” from and materials see map above Global Trade Review (GTR); “Best Developmental Financial Foods and food commodities 73 Institution” in the Global and Europe categories from Trade Clothing Finance; and “Best Development Finance Institution” from Trade Consumer goods, sports & Forfaiting Review. and household equipment Metallurgical equipment, 113 Commenting on the awards, Rudolf Putz, Head of the TFP, materials, metal and goods said: “We are delighted that the readers of Trade & Forfaiting Construction and equipment 254 Rudolf Putz, Head of TFP, collecting Review, Global Trade Review and Trade Finance have once 800+ Medical supplies and equipment Trade Finance magazine’s awards again recognised the EBRD’s achievements in the development 114 for Best Development Financial of innovative trade finance and technical assistance projects Services (financial) Institution Europe and Global 137 for banks and their clients in eastern Europe, the CIS and the Oil and products, oil refinery equipment, gas southern and eastern Mediterranean.” In 2013 banks participating in the TFP used the EBRD’s support to finance more than 2,000 trade transactions with a total value of more than €1 billion. Preference was given to transactions that support the development of small and medium-sized enterprises and trade between the countries in €10.7 You can follow us on Twitter which the EBRD operates. The TFP was particularly important for www.twitter.com/ebrdtrade banks and their clients in Belarus and Ukraine. 17,000+ Join the TFP LinkedIn Similar figures are expected for 2014 and the TFP is expected to remain in high demand due to the lack of availability of trade 110 TOTAL NUMBER networking group billion NUMBER OF www.linkedin.com/ finance facilities from foreign commercial banks.O OF TRANSACTIONS groups?gid=4667852 TOTAL TRANSACTION ISSUING BANKS IN VALUE SINCE 1999 25 COUNTRIES SINCE 1999 or find us on Facebook For more information visit www.tfreview.com, www.facebook.com/ebrdtfp tradefinancemagazine.com and gtreview.com. TF TFP AWARDS SPECIAL TFP AWARDS SPECIAL D_12S SPECIAL _11 TFP ANNUAL EVENT AND AWARDS CEREMONY 2014

he Trade Facilitation Programme (TFP) holds its annual award ceremonies at the EBRD’s Annual Meeting to honour the most T active issuing and confirming banks involved in the Programme. The winners are determined based on the number of guarantee transactions in the previous year. This year’s TFP Event and Awards Ceremony took place on 16 May 2014 in Warsaw, Poland, straight after the EBRD Annual Meeting and Business Forum. The event attracted over 140 bankers and trade finance specialists. Awards were presented by Nick Tesseyman, Managing Director for Financial Institutions at the EBRD, and Ambassador Jack K.C. Chiang, Taipei Representative Office in Poland.

O This year’s TFP Annual Event and Awards Ceremony could not have happened without generous Taiwanese funding and support.

Colleagues from Bank Eskhata, Tajikistan

WHAT PEOPLE SAID “We are honoured to Nomulin Basbish of Khan Bank receiving the award win this prestigious for most active issuing award from the EBRD, Per Fischer receiving the Aigul Teleusheva of Demirbank “Most active confirming collecting the award for most active bank in Mongolia our long-standing bank” award on behalf issuing bank in Kyrgyz Republic of Commerzbank partner in Georgia. This acknowledgement is a testament to the distinguished professionalism, high quality of service and sustained focus on Rasim Ismayilov of Muganbank shares his thoughts on winning innovative products the award for most active issuing bank in Azerbaĳan offered by TBC Bank’s Trade Finance team.” Promsvyazbank won the Vakhtang Butskhrikidze award for most active CaptionCaption to gogo in here issuing bank in Russia Chief Executive Officer, TBC Bank

_12 _13 Rudolf Putz congratulates TFP AWARDS the award winners Most active issuing bank in Moldova

2013

Most active TFP issuing banks Most active issuing bank in and conﬁrming banks in 2013, Mongolia by number of transactions

Most active issuing bank in Most active issuing bank Armenia in Romania

Mariam Megvinetukhutsesi Most active issuing bank of TBC Bank collects the award for in Azerbaĳan Most active issuing bank most active issuing bank in Georgia in Russia The 2013 award winners

Most active issuing bank Most active regional issuing in Belarus TFP DEAL OF bank in Russia Gagik Sahakyan of WHAT PEOPLE SAID. THE YEAR Ameriabank receives the Deal of the Year award “The Development Aid Most active issuing bank in The building of the new generation ﬁbre- Most active issuing bank Bosnia and Herzegovina optic network in Armenia was the 2013 Team of Commerzbank in Serbia TFP Deal of the Year. is most honoured by Armenian telecommunications

once again having company Ucom imported from Romania optical cables that will enable it contributed to Most active issuing bank Most active issuing bank in receiving the 2013 in Bulgaria Tajikistan to provide broadband internet, IP television and landline digital telephone award for most active services, the so-called triple play confirming bank. We technology. Most active issuing bank Most active issuing bank Ucom is the first and currently only thank the TFP team in FYR Macedonia in Ukraine company in Armenia that is building the for their excellent fibre-optics to operate this technology. cooperation.” Under the TFP the EBRD issued a guarantee to support intra-regional Most active issuing bank Most active issuing bank in trade between Armenia and Romania. In in Georgia local currency financing this particular transaction Ameriabank issued a letter of credit with post- financing for just over US$ 900,000, Most active confirming bank confirmed by Commerzbank. The EBRD Most active issuing bank in guaranteed 100 per cent of the political Kazakhstan and commercial payment risk and Dutch development bank FMO shared Most active Taiwanese part of this risk. confirming bank The tenor of the underlying Most active issuing bank transaction was for three years, a tenor in Kosovo that would not have been possible MoldindconbankMlMoldidinddconbab nkk won the award for most active EBRD/ICC 2013 Academic without the support of the EBRD. issuing bank in Moldova Excellence Award Most active issuing bank in Two of the many attendees who enjoy reading Trade Exchange Kyrgyz Republic

Vincent O’Brien, Chair of Marketing Intelligence Group, ICC SP Banking Commission, presents the results of the Global Survey AWA RDS on Trade Finance 2014 SPECIAL AWA RDS SPECIAL DS SPECIAL AWA RDS TF _14 TFP AWARDS SPECIAL _15

TFP AWARDS SPECIAL Panel discussion on staﬀ development with Anne Kiem (CEO, Institute DS SPECIAL of Financial Services UK), Rudolf Putz, Vincent O’Brien and Kamola Makhmudova

Innesa Amirbekyan, winner of the Trade Finance Clinic Gold Award, with Jack K. C. Chiang, Head of the Taiwanese delegation NBD Bank was named “Most active regional issuing bank in Russia” WHAT PEOPLE SAID “The EBRD TFP team has greatly supported the development of trade ﬁnance business at Muganbank. Winning the 2013 award for most Holger Kautzky, Commerzbank and Axel N. Bommersheim, Commerzbank, active issuing bank in with Marc Auboin, WTO Switzerland Azerbaijan has enhanced the image and credibility of Muganbank, both in the domestic and international trade

Mihaela Nadasan, Executive ﬁnance market.” Director Banca Transilvania, Rasim Ismayilov, ElmirElElmiir Hasanov,Hasanov, CChairman,hairman, MuMuganbankganbank collecting the award for most Deputy Chairman of the Board, and Aslan Abasov, Deputy Chairman active issuing bank in Romania Bank Respublika Muganbank

WHAT PEOPLE SAID “Thank you, EBRD, for this prestigious prize, which is proof of our sustained eﬀorts and focus on our valuable clients, supporting their needs and increasing access to import Banka per Biznes won the and export trade.” Rasim Ismayilov, award for most active issuing Muganbank bank in Kosovo Ömer Tetik, CEO, Banca Transilvania _16 _17

CASE STUDY: TAIWAN COOPERATIVE BANK. Taiwan Cooperative Bank (TCB) was founded Since the technological island is home in 1946 and its business ranges from banking, to several world-renowned electronics insurance, securities, to trusts and asset THE companies such as Asus, Acer and HTC, management. finding an adequate solution for the Over many decades TCB has built up a solid huge volume of discarded electronic customer base; as of 31 May 2014 the Bank components has previously been a had 287 Taiwanese branches and 10 overseas problem. In response to demand, a outlets, creating the most extensive branch number of electronic waste recycling network of Taiwanese banks and positioning GREEN companies have been launched. These itself as a market leader in deposits and loans companies have greatly enhanced the business – TCB boasts NT$2.41 trillion in island’s recycling capabilities and it can The Taiwanese deposits and NT$1.91 trillion in loans business. now fully meet the challenge of recycling made a significant ISLAND To help customers increase their foreign substantial quantities of electrical contribution to the trade in central and eastern Europe, TCB joined components, while also making a profit. FIFA World Cup in the EBRD’s Trade Facilitation Programme as a confirming bank. And to meet today’s SPREADING THE WORD ON Brazil – the kits of challenges in an increasingly globalised GREEN PRODUCTS 10 national teams market, TCB has continued to increase its It is the awareness of sustainable Taiwanese and foreign service locations; the development that is driving the green were made from PET Football kits made from recycled plastic bottles are just Tianjin branch, the third outlet in China, was revolution of Taiwanese industry, along recycled clothing. inaugurated on 1 August 2014 and the Fuzou one of many “green” products made by the Taiwanese with the understanding of how green branch (the fourth outlet) is expected to open industries can strengthen the economy as for business soon, too. a whole. According to the Taiwan External ne of the major sporting events of And recycling is a particular success; Looking ahead, TCB will continue to provide Trade Development Council, Taiwanese the summer of 2014 was the FIFA the rate of recycling plastic bottles, for its customers with a complete array of financial green exports accounted for 13.5 per cent World Cup in Brazil. While the example, has now reached 95 per cent, services, as well as striving to become a global O of total exports in 2012, amounting to Taiwanese did not compete directly higher than the 75 per cent achieved in bank and to fulfil its commitment to being the US$ 40.5 billion. in the tournament, they did make a Japan.* This can be attributed largely to best financial institution for nationals around The government actively encourages significant contribution – through high- the government’s subsidy and incentive the world. the growth of “green business” through tech sportswear. policy. Having set up a fund to encourage raising awareness, and there are a Using innovative techniques, recycling and waste reduction, the number of exhibitions and workshops TCB in Taipei polyethylene terephthalate (PET – a government now spends 6 billion New that take place each year focusing on material frequently derived from recycled Taiwan dollars a year on subsidies paid to green industries and their business plastic bottles) can be broken down into the recycling companies. Statistics show opportunities on the island. a fabric which is more comfortable and that this policy has proved increasingly One of these events is the Eco- sweat-absorbent than cotton. The method lucrative; in 2011, for example, 193,000 Products International Fair, which in has been so successful that at the 2014 tonnes of plastic were collected and 2014 featured winners of the Taiwan World Cup, the kits of 10 national football converted into raw materials worth Green Classics Awards. The Awards teams were Taiwanese products. US$ 172 million.* recognise green products and services of PET recycled clothing is also a big the highest quality and innovation, and earner; FIFA estimated that profits from winners gain exposure through various the World Cup would be more than marketing initiatives. Also, the Bureau of US$ 40 billion, and that the Taiwanese Foreign Trade produces the Taiwan Eco textile industry would be the main Products Directory listing products with beneficiary of this. According to the environmentally friendly components, Ministry of Economic Affairs, the such as LED lighting applications, printing Taiwanese hold 70 per cent of the PET materials and environmental protection recycled sportswear market. and pollution prevention products. The directory can also serve as a reference for LEADERS IN RECYCLING green procurement.O The Taiwanese are proud of their commitment to environmental sustainability and have been leading For more information on Taiwanese the green initiative in Asia since the green trade, visit http://green.taiwantrade. 1990s – they were placed third in the com.tw/. 2013 World Competitiveness Yearbook * Source: the Taiwanese Environmental Protection sustainable development rankings. Administration. IN DEPTH IN DEPTH _EXPERT INSIGHT _EXPERT INSIGHT

_ _ 18 shown on the transport document is not 19 in accordance with the invoiced quantity.

Other documents If a certificate of quality is called for, the guarantee should stipulate what GETTING YOUR (minimum) terms of quality should be certified. If it does not, the bank is not allowed to make any objection as long as the document is entitled “Certificate of Quality”. This is the case even if there is no DEMAND mention of the quality in the document.

INSTRUCTIONS TO GUARANTOR The beneficiary needs to give exact and correct instructions to the guarantor in RIGHT that the beneficiary has to clearly express that he is lodging a demand. For example, documents sent “for collection” will not be treated as a demand under a guarantee and will not be STATEMENT OF BREACH Demand guarantees examined with regard to their conformity This is the most important part of the with guarantee terms. Since a collection provide valuable demand under the URDG. The statement does not impose an independent payment must be in line with the stipulations in the protection for those obligation on the bank, the bank will only guarantee and the URDG, otherwise the effect payment if the guarantee applicant conducting trade, question as to whether the statement is agrees to it. especially in the current complying is a matter of interpretation. The URDG require a statement that challenging environment, TIMELINE there is a breach and the respect in which A demand must be presented to the but they’re not always the applicant is in breach. Only a general guarantor (or any other place for explanation/declaration of the kind of easy to get right. presentation as mentioned in the breach is required, but this can leave room guarantee) on or before expiry. Within the Andrea Hauptmann for interpretation. validity of the guarantee, the beneficiary of Raiffeisen Bank “Documents need not might correct any discrepancies in the COMPLYING DATA demand or the supporting documents. International provides The amount asked for in the demand be identical but they After expiry, the beneficiary can only hope some pointers must not exceed the available amount of have to be consistent that the applicant waives the discrepancies the guarantee, even if the invoice value on how to lodge a and accepts payment made under the exceeds the guarantee value. A claim may with one another and guarantee. In most cases the applicant will successful demand. be lodged for the guaranteed amount only meet the guarantee terms not grant a waiver and the guarantor will (at the most). reject the demand. Other relevant data (such as name and and conditions.” Remember, according to the rules, each address of the beneficiary and applicant, presentation shall identify the guarantee odging a demand under a contract number and so on) have to under which it is made, such as by stating URDG 758 guarantee may be stated exactly as per the guarantee that a reliable bank must confirm that guarantee terms, delivery as per delivery Transport documents the guarantor’s reference number for the initially seem simple but in terms. Inconsistencies might lead to the the signatures appearing on the demand terms, and so on. The standard for A number of common errors can be L guarantee. If it does not, the time for reality more than 30 per cent guarantor rejecting the demand unless are legally binding on the company. If the complying documents under a URDG found in these documents. For example, examination indicated in article 20 shall of claims are considered to be formally the guarantee is amended or the applicant guarantee does not provide for verification demand guarantee is now more aligned in one particular case the delivery terms start on the date of identification. If the inconsistent with the guarantee terms agrees to waive the discrepancy. of signatures, the signatures have to be to the required standard in the UCP.1 The stated “CIP Almaty”, but the CMR identification occurred after the guarantee and conditions. accepted as presented, which may cause following are some examples of non- evidenced delivery up to the Ukrainian- expired this could be a critical mistake for This can be because the principle of SIGNATURES problems, but those problems are between complying documents in the context of a Hungarian border. Also, if a transport the beneficiary. strict formalism of a guarantee often causes If the guarantee calls for verification of the applicant and the guarantor. URDG 758 demand guarantee. document is required, it has to be These are just some examples that problems for clients. It means that all the signatures, the guarantor must make issued in accordance with the highlight the importance of careful terms and conditions stipulated in the sure the demand is sent by an authorised EXAMINATION OF DOCUMENTS requirements for that particular preparation for a demand under a guarantee must be followed, along with the employee of the beneficiary in line with This is probably the most controversial document, for instance, a CMR if it 1 URDG 758, sub-article 19 (b) states: “Data need not be guarantee.O provisions of the ICC’s Uniform Rules for the verification requirements. In practice, point. Documents need not be identical identical to, but shall not conflict with, data in that document, requires the document to be “stamped Demand Guarantees (URDG). Normally if verification is required, this normally but they have to be consistent with one any other required document or the guarantee.” and signed by the carrier”. (Therefore a there is little room for interpretation as means that the person signing has to another and meet the guarantee terms UCP 600, sub-article 14 (d) states: “Data in a document, carrier’s stamp without a signature is to whether the demand complies, but to be included in the list of authorised and conditions – evidencing, for when read in context with the credit, the document itself and not acceptable because the document Andrea Hauptmann, Senior Director, international standard banking practice, need not be identical ensure a successful demand, the following signatories of the beneficiary organisation. example, the contract number, goods to, but must not conflict with, data in that document, any other is not properly issued.) Another Head of Guarantees Department at points are important. Ideally the guarantee would expressly state description, consignee as per the stipulated document or the credit.” discrepancy might be that the quantity Raiffeisen Bank International. IN DEPTH IN DEPTH _BANK PAYMENT OBLIGATIONS _BANK PAYMENT OBLIGATIONS

_20 _21 “For sellers wanting to THE BANK transact with buyers without a track record or PAYMENT in riskier jurisdictions, the BPO mitigates OBLIGATION  IS IT payment risk.” THE FUTURE?

The bank payment obligation (BPO) is a new electronic trade tool that has many beneﬁts. The market has so far been slow to use it, but could it one day replace the traditional, paper- based letter of credit? Hannah Fearn and Geoﬀrey Wynne of Sullivan & Worcester UK LLP compare the two instruments.

in favour of the seller, meaning that the seller (as beneficiary) has a direct claim against the issuing bank for payment. Another difference is how payment is triggered. An LC requires presentation of documents relating to the underlying trade transaction. These documents could than making a presentation under a paper AN ELECTRONIC LC, OR AN presented under an LC. Instead, a BPO other. Banks still have certain obstacles WHAT IS A BPO? be in paper or, if permitted, electronic LC, potentially leading to fewer rejections. ENHANCEMENT TO OPEN could be seen as an enhancement to to overcome as they start to use BPOs. The BPO – sometimes referred to as an form. The issuing bank then examines However, using automated processes ACCOUNT TRADING? open account trading, allowing sellers But as the industry embraces increased “electronic letter of credit” – was launched the documents to determine whether means less scope for scrutinising Most trade transactions are carried out on to obtain security of payment from automation and traders demand faster, in June 2013 under the ICC’s Uniform the presentation is a complying one. A transactions at a time when regulators open account basis. This is the least secure buyers with whom they do not have cheaper methods of settling payment, it Rules for Bank Payment Obligations BPO, however, requires data about the seem to require banks to act as payment method for a seller, who has no a track record, at (potentially) a lower may be that the electronic BPO becomes (URBPO). To date, take-up in the market underlying transaction to be submitted gatekeepers to the risks of financial crime. certainty of payment after shipping its cost to buyers than opening an LC. the preferred method of payment over the has been limited, suggesting that trade to an electronic data matching platform, Trade finance is perceived as a high risk goods. LCs give security to both parties, traditional LC.O customers do not yet understand the which automatically determines whether area for money laundering and other giving a seller certainty of payment and a ARE BPOS LIKELY TO purpose of the BPO and how it might those data match the requirements of the crime, and the guidance recently published buyer certainty of delivery (on the basis REPLACE LCS? Hannah Fearn – Associate, and assist their trading relationships. BPO. If there is a data match, the obligor by the UK’s Financial Conduct Authority of the relevant shipping documents being For the foreseeable future, it seems that Geoffrey Wynne – Partner, Sullivan The underlying nature of a BPO is the bank must honour the BPO in the same requires banks to develop policies and presented to its issuing bank). BPOs and LCs will sit alongside each & Worcester UK LLP same as for a letter of credit (LC): it is an way that an issuing bank honours an LC controls to prevent trade instruments For sellers wanting to transact with irrevocable undertaking given by one party following a complying presentation. being used to finance crime. This requires buyers without a track record or in to pay another on satisfaction of specified examination of the trade transaction’s riskier jurisdictions, the BPO mitigates conditions. A BPO is a method of payment THE BENEFITS AND underlying payment instruments. The payment risk as the seller can rely on for an underlying trade transaction and RISKS OF ELECTRONIC potential advantages of BPOs over paper the payment undertaking given by the it allows parties to mitigate the risks of PROCESSES LCs, in terms of costs and time, might buyer’s bank. The BPO provides less trading by transferring the payment risk The BPO, which is created and managed be diminished to the extent that the comfort for the buyer, however, as payment SEE PAGES to a bank. entirely electronically, offers an alternative examination of transactions prohibits the by the buyer’s bank will be triggered by the _14-15 A key structural difference between to the document-heavy LC. By automating full use of automated processes. submission of matching data alone. The of the March 2013 a BPO and an LC is the identity of the the process, a BPO should be quicker It would be unfair to say that the buyer’s bank will not, by virtue of giving issue of Trade beneficiary. A BPO exists between two and cheaper than a paper-based LC. increased burden on banks to scrutinise the BPO, receive the underlying shipping Exchange for banks: the obligor bank, which undertakes Also, relying on an electronic platform the business of their customers would documents that confirm (absent fraud) that more “super to make a payment, and the recipient to automatically compare data removes only affect BPOs. Increased regulation the shipment has been made. banker” tips bank, which receives that payment. As the element of subjectivity inherent in may necessitate changes in the way banks While similar to an LC in many ways, the recipient bank is the beneficiary of examination of documents (although it operate all types of independent payment a BPO is something different. In fact, the BPO, the seller in the underlying also requires parties to be exact in the data undertakings, including LCs, which are, electronic LCs already exist, with the transaction has no direct claim against the they submit). Sellers could find the process like BPOs, intended to be independent of rules of eUCP intended to work with UCP obligor bank. By contrast, an LC is issued of submitting data more straightforward the underlying transaction. 600 where electronic documents may be TRAINING DIGEST _ISBP WORKSHOPS

_22 TRAINING _23 DIGEST

11 2 5

IMPROVING 4 1 18 8 13 3 7 10 9 SPECIALISTS’ 19 6 14 12 20 15 SKILLS 17 16

New and revised provisions of the International Standard Banking Practice were the focus of an EBRD workshop Workshop “Participating in the workshop was participants YOUR KEY TO THE road show in Albania a real honour for me. I was very COMPLETE ROAD SHOW impressed by the open-minded and In chronological order he EBRD delivered a series of one-day friendly nature of all involved, and workshops examining the detailed application 1 Ulaanbaatar 9 Skopje 17 Cairo of both new and revised provisions of the Vincent passed on his expert 2 Yekaterinburg 10 Tirana 18 Chisinau T 3 11 19 International Standard Banking Practice (ISBP) knowledge to participants in an Tbilisi Moscow Yerevan in day-to-day documentary operations. 4 Kiev 12 Dushanbe 20 Tunis With the aim of further developing the skills informative and engaging way. 5 Minsk 13 Almaty of trade finance specialists across the EBRD’s Thank you, EBRD, for offering us 6 Baku 14 Ashgabat countries of operations, the workshops also offered 7 Bishkek 15 Casablanca practical examples and case studies of how to apply this opportunity.” 8 Belgrade 16 Amman ISBP in practice. Radhouane Houria, Head of Trade Finance at Banque Tuniso-Koweitienne The workshops were delivered by Vincent O’Brien, a leading specialist in international trade and finance who has delivered this training in more than 70 countries. Feedback has been exceptionally positive with participants expressing their appreciation for Happy faces in Kyrgyz Republic the support from the EBRD Shareholder Special Fund, which funded this technical cooperation (TC) project. The first workshop was held in Ulaanbaatar in May 2013 and the last workshop in Tunis at the end of October 2014, spanning 19 countries. Since its establishment, the EBRD’s Trade Facilitation Programme has been promoting know- how transfer and capacity building by offering bespoke TC projects. These projects help to promote the application of prudent banking standards and have been supported by institutional, commercial Participants at the workshop in Jordan and sovereign donors. O Attendees in FYR Macedonia TRAINING DIGEST TRAINING DIGEST _LONDON FORUM 2014 _LONDON FORUM 2014 T Forum guests hearing about challenges UPDA in the trade finance sector FORUM _24 FORUM UPDATE _25 UM UPDATE FORUM UPDATE It was a pleasure to participate in the TFP’s TFP TRADE conference. It was very interesting and provided a great opportunity to meet FINANCE the excellent TFP team, as well as colleagues , from other banks. I am FORUM 2014 looking forward to similar opportunities in the future. Andreja Turcin, Director, EU Desk, LONDON Privredna Banka Zagreb

he 2014 TFP Trade Finance At the top of the agenda were Forum took place in London on discussions about financing intra- 22-23 September 2014 and was regional trade, increasing exposure Ambassador Chi-Kung Liu welcomes I’d like to thank the TFP T Innesa Amirbekyan of Converse Bank, participants to the Forum attended by more than to factoring services, as well as Armenia and Suren Kocharyan of team once again for this 160 guests from 90 institutions in the developments in the southern Ameriabank, Armenia, with special guest 22 countries. and eastern Mediterranean from Commerzbank, Axel Bommersheim wonderful Forum. The Forum was initially (SEMED) region and banking in The venue was pleasant established in 2009 as a response the EBRD’s less advanced countries and comfortable, panel to the financial crisis, and serves of operations. discussions exciting, as a vital networking platform, The event was sponsored by and possibilities for which was particularly important Bank of Georgia, BHF-Bank, this year in view of constraints Commerzbank, Erste Bank, networking numerous on the international trade Landesbank Baden-Wuerttemberg and inviting. finance markets and the complex and WGZ Bank, and received Alexander Zantovich, Head geopolitical situation in eastern generous funding from the of International Trade Europe, including Ukraine. Taiwanese and the EBRD and Structured Finance, Shareholder Special Fund.O Belgazprombank.

Welcome from the Representatives from TFP team in London Bank of Georgia, Belarusky Narodny Bank and BHF-Bank discuss cooperation with the EBRD

Daniel Bolschun, Forum organiser, and Ana Kavtaradze of Bank of Georgia TRAINING DIGEST TRAINING DIGEST _JVI WORKSHOP _TRADE FINANCE CLINIC

_26 EXPANDING KNOWLEDGE, _27 PIT YOUR Unexpected SOLUTION WITS “Warehouse to BUILDING AGAINST consequences warehouse” NETWORKS Here is an urgent query for your expert (Spring-Summer 2014 issue) THE attention. DEAR TRADE FINANCE PROFESSIONALS, ollowing the first successful Trade In the words of a participant these were EXPERTS! Our bank added confirmation to a letter of credit issued by a This is one query where the correct technical answer can result in Facilitation Programme (TFP) workshop “...five days of intense exchange and debates. bank covering the import of farmed fish. The letter of credit unintended negative consequences for an exporter that has shipped his at the Joint Vienna Institute (JVI) in June My wish is that these contacts and exchanges Every issue of Trade allowed for part shipments, for example: goods in good faith. A lesson to be learnt from this real life query is that 2013, the EBRD once again welcomed 25 from this week will continue beyond the it is imperative to first determine the correct technical answer based Ftrade finance bankers from 14 countries to workshop. I will do my best to pass on the Exchange includes a on the rules and standards, and then as a bank active in supporting July 2014 – up to US$ 50,000.00 Vienna from 18-23 May 2014. knowledge shared at the JVI with all my brain-teaser, drawn August 2014 - up to US$ 50,000.00 secure international trade make the correct, fair and just final decision Like the previous workshop, the aim colleagues in our Trade Finance and regarding settlement. was to provide participants with a deeper Correspondent Bank Division, and will from the real-life trials September 2014 - up to US$ 50,000.00 From the many replies received it is clear that all respondents understanding of the dynamics, risks and use every opportunity to create and October 2014 - up to US$ 50,000.00 understood the importance of insurance cover being effective on or product structures that are at their disposal enhance business between our bank and of a trade finance November 2014 - up to US$ 50,000.00 before the date of shipment evidenced on the transport document. when assisting their corporate clients with the EBRD.” expert. Here is your December 2014 - up to US$ 50,000.00 This is an important and practical requirement where the rules clearly their international trade business. In thanking the EBRD for this opportunity, reflect the practice. Equally important to the knowledge shared another participant wrote that the workshop chance to demonstrate However, some respondents made the point that if the insurance during the workshop was the coming together was “an important contribution in the your ability to cover was effective from “warehouse (of seller) to warehouse (of buyer)” of leading specialists from the EBRD’s most development of our skills that I’ve already then the logical conclusion is that cover would have been effective active issuing banks, thus indirectly facilitating begun to implement in my day-to-day work”. disentangle the most ...part shipment before the actual date of shipment on the transport document. regional trade. Obtaining knowledge, sharing it with allowed In determining the correct technical answer, respondents first In addition to the lead facilitators – Ken colleagues and having the network of TFP involved, contentious referred directly to the applicable UCP 600 rules and then Pasternak and Kiki Magireli from BankT&D banks at their fingertips – participants could or just plain weird ...monthly shipments... supported their final technical decision by referring to the ISPB Consulting – participants had lively interactive not ask for more from this workshop.l (ICC Publication 745E). sessions with various trade experts including combinations of one month missed... The panel of experts congratulate all successful respondents Vincent O’Brien, Edith Babuscio, Stephen documents and to but have selected the response of Irina Chuvakhina from Priorbank, Tricks of Clyde & Co, Max Burger-Scheidlin, What are the Belarus, as the model answer. To view this answer please visit ebrd. Karl Mayrl of Erste Group Bank and Andrea solve a puzzle in the coastlinesolutions.com/answer. l Hauptmann of Raiffeisen Bank International. consequences The EBRD’s TFP team gave an overview field of documentary of its objectives and approaches, along operations. ? with details of its e-learning and education WINNERS resources that have been developed in The bankers and trade finance specialists collaboration with the International Chamber Documents were presented in respect of the July and who answered correctly are of Commerce. August shipments and paid in a timely manner. However, due to poor weather conditions a shipment (in alphabetical order): was not made by the exporter for September 2014 but a subsequent shipment and presentation of documents was Wael Ali Abdel Aziz, Commercial International Bank, Egypt My week at the JVI was made for the month of October 2014. Nigar Allahverdiyeva, Azerbaijan Industry Bank, Azerbaijan an unforgettable The issuing bank has returned the documents in respect of Innesa Amirbekyan, Converse Bank, Armenia experience for me. the October 2014 shipment without any payment and advised Ketevan Antidze, Commerzbank, Georgia that “the credit is no longer available and has been removed It was interesting to meet What do Anna Babayan, Araratbank, Armenia The workshop… from the issuing bank’s books”. Irina Chuvakhina, Priorbank, Belarus bankers from different We would appreciate your confirmation that the action of helped me widen my you think? Dominico Del Sorbo, Studio Del Sorbo, Italy countries sharing experiences the issuing bank is contrary to the irrevocable undertaking of an Andrej Eftimov, NLB Tutunska Banka, FYR Macedonia understanding of TFP issuing bank under UCP 600 and that the issuing bank must Provide us Tamar Gugushvili/Nino Papashvili, TBC Bank, Georgia (joint answer) products and reconsider from various operations honour the complying presentation in respect of the October with your Elena Jordanoska, Komercijalna Banka Skopje, FYR Macedonia according to country shipment, along with any subsequent complying presentations some current negotiations Ruzanna Kusikyan, Araratbank, Armenia expert view should they arise. and transactions.” peculiarities, ideas and Jasmina Milovska, NLB Tutunska Banka, FYR Macedonia We await your urgent reply. Ekaterina Zubkova points of view.” Lamia Riabi, Attijari Bank, Tunisia Deputy Head, Trade Finance and Daler D. Sadikov Ilaha Rizvanova, Azerbaijan Industry Bank, Azerbaijan Documentary Operations Department, Head of International Business Department, Kristina Soghomonyan, Araratbank, Armenia Bank Saint Petersburg Bank Eskhata Send your answers to [email protected] Solutions and prize-winners will be announced in the next issue of Trade Exchange EBRD Annual Meeting and Business Forum Tbilisi, Georgia 14-15 May 2015

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