Sealing Trust In Global Trade: Towards A Paperless Journey
Webinar recap: Sealing Trust In Global Trade — Towards A Paperless Journey
By Clara Soh and Joanne Ng, R3
Given the current global climate, digital trade is a topic that has been gaining traction in many parts of the world, especially in Asia. This webinar recap highlights key learnings and insights from R3, Thai Bankers’ Association, Infocomm Media Development Authority of Singapore and VCargoCloud on the existing digital trade initiatives in Asia.
In the recent webinar “The Journey to Paperless Trade: Industry Initiatives for Interoperability” hosted by BAFT and R3, we had Mr Kobak Duangdee of The Thai Bankers’ Association, Mr. Loh Sin Yong of Infocomm Media Development Authority, Mr Viboon Chaojirapant of VCargoCloud in a panel discussion moderated by Mr Henry Roxas of R3.
The discussion highlighted the existing concerns of interoperability and regulation constraints in the trade process as potential roadblocks to achieving a completely digialized global trade network. Taking steady steps to overcome these barriers, several governments have started to explore emerging technologies, including blockchain-based initiatives to drive the digitization of trade.
Establishing system interoperability
Due to complex processes and data silos, inefficiency happens when traditional trade paperwork is being processed between corporates and border authorities. Initially, the Singapore government adopted the concept of a Whole-of-Government approach to standardize and connect data silos from physical to digital copies. However, while effective at improving internal processes, this approach was short of managing data flows from fragmented global trade systems.
Exploring ways to enhance the digital trade processes, the Infocomm Media Development Authority of Singapore launched TradeTrust. It is a digital utility initiative to integrate organizations’ existing technological infrastructure and address interoperability with a wider community. TradeTrust is designed to be a public and permissionless open source platform with off-chain data and payload agnostic operations. Its MLETR-compliance feature also ensures that the transactions on the platform meet legal requirements, adding benefit for government entities who use it.
Another example of digitization of trade in Asia would be Thailand. The country has developed the National Digital Trade Platform to be the main system for linking and ensuring digital trade flow data to be compliant with international standards. Blockchain technology is leveraged to facilitate trust through peer-to peer information exchange within a strict level of commercial privacy on this platform. Unlike paper-based transaction processes, this system digitalizes all trade-related data and documents to enable a faster processing time with the integration of data exchange process across different organizations.
Reducing fraud and establishing trust
Aside from the complex processes resulting in inefficiencies, partaking in trade presents the opportunity for fraud especially when a single transaction undergoes multiple layers of manual processing. By digitizing trade, manual verifications are greatly reduced and parties can obtain data as close to the source as possible. This results in a higher accuracy of data circulating within the system.
Today, many trade participants remain resistant to moving trade data online due to uncertainty and trust between the 2 transacting parties and borders. While the current ASEAN Single Window (ASW) initiative is a step towards building trust between countries in trade, there is room for ASW to speed up on its document upload processes and the type of forms it can provide in different scenarios.
Collaborating with the Singapore International Chamber of Commerce, VCargoCloud offers the world’s first electronic Certificates of Origin (eCO) platform, a blockchain solution powered by Corda, to counter reproduction and medication of data in eCOs between countries. It bridges the gap in B2B and G2B transactions within ASW and it is currently tested for trades between Thailand and Singapore. Transactions carried through this solution is shown to be more fraud-resistant due to Corda’s interoperability with other Corda-based networks, scalability for high volume of data and strict level of privacy that allows relevant parties to share data at a granular level.
Emerging technologies such as blockchain technology are not designed to remove fraud completely. Despite this, governments and corporates can leverage on the technology to exchange data in a semantically interoperable manner for stricter security and fraud reduction. Additionally, it is expected that the trade industry will continue to use both paper and digital trade documents. As the support for paperless trade continues, the market will soon see a shift towards interoperability between the two trade document formats for downstream recipients to efficiently extract and process data.
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Sealing Trust In Global Trade: Towards A Paperless Journey was originally published in R3 Publication on Medium, where people are continuing the conversation by highlighting and responding to this story.