 We have already the first person in the chat looking forward to the talk. We are so much looking forward to talking to you today. And my name is Maria and the full name is Maria Mogilneya. I am a principal banker in the trade facilitation program at the European Bank for Construction and Development in London. One of the multilateral development banks and the only bank that is still growing its membership. I am very proud to represent the EBID today and I'm joined by Andrea. Andrea, would you like to introduce yourself? Thank you, Maria. Thank you. My name is Andrea Fosunini. I live and work in Italy in Florence, by the way. I'm a season, unfortunately, season trade finance manager who work basically for multinational companies. I recently actually in two years joined the hyperledger community and I started out in January 2020 as my TV, as chairperson for the trade finance special interest group. So I was asked by Maria to join her in this interesting panel to give support to the discussion ongoing disruption in trade finance through blockchain, enterprise blockchain solutions. Great. Thank you, Andrea. This opportunity in joining you today, my pleasure. Pleasure is all mine. So just a few housekeeping or session keeping things. The session will go on for 30 minutes and Andrea and I will talk for about 20 minutes and we will be very happy to take your questions at the end. Please use the chat function and send them to us and we will then read them out so that everyone can, whoever is watching the recording knows the questions and we will try to answer everything that you want to know. And if we do not know the answer or we cannot answer today, we will for sure do that and we'll try to get back to you. So I'm going to share my screen right now. Yes, please. Andrea, I know that I will stop seeing you. Good. So no problem. If you don't see me, it's much better. You have a much better look. So just to remind everyone that the session is on legal and regulatory barriers to digital trade and that's what we're going to talk today about. As far as I know from the agenda, this is one of only three sessions during this Global Forum on Trade Finance. So I'm very happy, Andrea, that we can talk about it today and that it was included in the program and the agenda because it's very important. So I would like to show you this picture. Those of you who may have seen it, it first appeared on Reddit and then was circulated in social media by a lot of trade finance specialists around the world. As you can see here, there is a lot of paper and I counted for you so you don't need to count there are 71 pieces of paper in this photo and this is the amount of paperwork required for one single shipment of pet food or food for animals for domestic animals from the UK to Croatia. If you wonder whether it was before or after Brexit, this I don't know but I think it shouldn't really matter because no matter what, there should not be so much paper required also with ink stamps in red and double-sided printing and so on for a single trade transaction. The coronavirus pandemic put a lot of emphasis on paper in trade and trade finance in the last what is now 18 months and a lot of shipments were delayed, a lot of goods were not cleared in customs because of paper and that's one of the major problems in trade finance at the moment and in terms of digitalization or digital transition in trade finance. So as a little preview, Andrea, would you like to tell us now what is currently happening in digitalization and trade finance? Sure Maria, thank you so much for handing this to me. As you said, trade finance, I call it a vintage industry actually. It's a very ancient one. Let me have one thing. When you think about trade finance, you think about paper basically as you show perfectly in that picture, you also think about you know middle ages not because it's an ancient one but okay it was created basically at both times and it literally evolved but the core of the industry remained unchanged. Okay it is still regulation changes of the core state. So you mentioned Maria, the big destruction, the very first one that was brought by COVID-19 out of 2020, it's correct. Think about that, you know some banks had to issue specific regulations for big corruption. So this was crazy for modernizing the industry and a heavy load of let's say initiatives where started out all over the world. The main one is the first one you can see listed on top of this slide which is the unsuitable model load on electronic transferable records. This is some kind of let's say the milestone for changing. This is a model load which means basically it supplies the framework to be accepted and national levels by each and every country. So far actually at the beginning of 2020 this model load was only accepted by one single country which is in the Middle East it was Bahrain, the Kingdom of Bahrain and it was only accepted at one point. I mean it was accepted by the customs, by the institutional law but not. The situation has changed. Other countries have joined this model load and you know the situation is constantly evolving. As you can see here we saw Singapore through the national law and Abu Dhabi global markets. These are two main initiatives that joined Bahrain. So the situation is completely changing and more and more countries are planning to modify national laws to accept this electronic transferable records. Think about that. Now this is going to change dramatically drastically the situation. Second thing is the what you can see the ICC, the International Chamber of Commerce, the DSI, the digital standard was set up part of 2020 by the International Chamber of Commerce in Singapore. An important institution that stepped in the picture and it is striving in order to change the global outlook as the ITFA, the so-called ITFA Internet Information Association. First project which is led by a friend of mine, Kile D'Antoni, which is advocating this change in the digitalization of trade finance as secondly through the initiative that is digital negotiable instruments. Those two led in parallel and you know are heavily impacting the industry by you know introducing this new form of instruments. On the other side of the oceans they are not sleeping on laurel. Things also is evolving thanks to the activity led by Banks Association Finance and Trade, the BAEFT, which recently introduced a new standard for international trade and trade finance which is called distributed payments which is a new standard DLT, so which is specifically was created for being run on DLTs and it's open source, utilizable by anybody interested in it. So it's a big change of picture, you see this four main initiatives led worldwide. I think you get Maria, where we are placed, where our activity we have set up. We just at the crossroads are bold those NHTs. We set ourselves up you know as a sort of connection point between all these activities. We started out October 2020 last year. Oswald Keiler having a speech with ourselves so you can think that way on the slide and it details us with plenty of news about what's going on in Singapore through the DSI and what Singapore is achieving by setting up this specific project which is called Singapore Trade Trust which was set as open source again and it's ready to find collaboration all over the world and some are about to be initiated in that epic region, think about Australia and other countries to be added. We had another very interesting meeting in our city. The 10th of March 2021 where we hosted a very interesting speech which I wanted to go and visit. We had Mr Andre Kasterman, one of the main actors within the ITFA and DNI initiatives. It was joined by Gunnar Collin and Jako Nyong of Bolero International. They gave us plenty of insights about the digital negotiable instruments. Later this year we have another interesting speech. We had another interesting meeting on paperless promissory notes on DLPC, the new standard that I mentioned in the former slides. We had FQX, a company from Switzerland who has devised this new instrument which is supposed to let's say provide with a solution for one of the main problems in nowadays trade finance which is the trade finance gap, providing liquidity to micro small and medium enterprises dealing with international. The later this 7th of April we have the honor to look at Kasterman, a friend of ourselves, having the speech about this running practice which will be true at this moment. It was joined by Mr Ren UK from Singapore Trade Trust. They gave us plenty of details about what's going on in Singapore and how this model can step in as mid in boosting digitization and trade finance. Last of the meetings that we have was the one on left me this year. We guessed a very interesting speech by Harid Van Tanen from North Finland and I gave us plenty of details about what's going on in Northern Europe in this respect as well in terms of digitization, in terms of creating new patterns, new semantics for transmission, for let's say enhancing transmission of electronic transferable records. This is the activity of our 604 in the much larger picture which is internationally carried out by several institutions. It's very interesting and I'm sure that a lot of the slides will be shared. There are links please watch all these meetings and recordings and I really hope that you will get much more interest after this talk into your trade financing and that people will join. Of course you're all invited to join us, it's a free community for anybody who is interested both in technical side for joining us and giving insights. You can step in, no worries, you can tell the world anytime you like. I would like to talk about this and maybe you could talk on the next one. Here is a snippet from a report from 2018. I don't think anything has changed unfortunately since then so it should be as relevant as in 2018 a report by Bain and Company commissioned by HSBC where they actually went through all the processes and trade and trade finance so this is an example of an issue of a letter of credit. So we spoke a bit about paper and the drive to make trade and trade finance industry paper less but there are other benefits that blockchain can bring to trade finance and this is an example where you could potentially reduce the processing time by 80 percent and to illustrate it in a different way Andrea would you like to talk about this and I see that some parts are not showing here so yeah the second part would be optimized with digitization and the third one is blockchain enabled. Exactly Maria consider this you know we base our argumentation on the basic fact that you know we stock on a picture that is based on an LSE on a letter of credit so a lot of work to be done on persuasion documents you know it's a straight line connecting buyer and seller actually the seller and the buyer so there are once the LSE is in place the divide to the beneficiary which ships the goods so you know you have several intermediate steps to undergo once you ship you have to produce the documents documents shall be sent physically in a physical form to the beneficiary of the letter of credit they have to be checked on their side they have to be forwarded to the confirming bank which from her side herself she checks documents if you find a strict conformity with the LSEs let's say closes if towards the documents themselves to the opening bank which once again checks the documents and if found in strict conformity with the LSE really then there are other steps you know what this have to be released and a handle to the final customer which then undergoes through the customer now at stable in the picture so what you can see here in this line with all these tools they are different operation these are in a physical space nowadays operations once you digitize you see that three operations are cleared literally canceled so ergonomically it's a large advantage for anybody considered the margins are affected positively once you go through the blockchain the line gets shorter and shorter so you see basically three intermediate steps yes andrea and i think one of the one of the main benefits here would be that in the long process there is a lot of reconciliation that needs to be done because parties the information is not presented at the in real time and you have asymmetric information presentation so reconciliation can really i mean based on this picture can have the time and cost of the process if you talk here it is you see so it's all back so i should have clicked through extra buttons so you can see here optimized with digitization and blockchain enabled you can see that you have so many sources of information in a letter of credit but yeah so you have back in list you have you know you have the bill of lading you have the invoices all of these to be matched between them you have a number of the lc we should be quoting the niche in every document if you put blockchain in the picture this allow you to reconcile all this information in a much quicker way than it's done in a physical space almost in the barely digital way yes and i mean the other things the benefits could be not only instant and transparent communication between importers exporters banks and all other participants as andrea mentioned there are a lot of them a lot trade is a very complex complex chain and trade finance on top of this makes it even more complex automatic payments can be affected through smart contracts which means that there are no extra steps required to request a payment and to process it everything can be automated and of course the reconciliation and end to end tracking of goods in transit is also a very important point but if we talk about the legal requirements here you can see and this is my head of a representative of the european bank for construction development comes in it's very important that our region and we operate in economies from morocco to mongolia and from estonia to egypt and you can see here this is a snippet from the icc global survey and trade finance from 2020 i only pick the countries that are in our region and you can see the acceptance of digital documents and these are all the types of documents that you can see letter of credit bill of lading bill of exchange insurance policy promissory note that can be required or can be part of a trade finance transaction and you can see that the respondents to the survey which would be usually banks some of them did not know or were not not sure whether there is a paper or digital allowance for this document you see orange are all of ones that must be in paper and you will see green ones where digital is allowed so it's not the only option but at least it's allowed and i would like to draw your attention to egypt which seems to be at least based on this data is the country that is ahead of others in our region and i would like to give you an example of the actual application from july this year egypt through its customs will require mandatory advanced carbon information declarations and not only they have set up a national single window which is recommended by the united nations for trade facilitation in general but they also partner with cargo x to provide a dlt-based courier service a document transfer service and it's actually quite fascinating to think about that that the importer and the exporter will be able to receive information at the same time when they know that everything is set and by using nafaza the single window for foreign trade facilitation in egypt they will be able to know when the goods are coming they will be able to know that the goods the incoming cargo has been registered properly which means that egyptian customs will not turn the goods away and i would really i really encourage you to follow this and see whether there will be a lot of news about cargo not being accepted at the egyptian customs i'm definitely watching it from the first of july i find that's really fascinating as an example of application of a blockchain and i'm really happy that it comes from the region where the ebrd works so andrea we are coming close to the end of our talk let's talk about challenges uh challenges and yes yeah sorry the first one you can see a list here is uh you know i wanted firmly this uh to be on top because will they see the final common standard for the 20 transferable records documents slash documents through different countries you know uh we have to find a common place uh there are too many standards whether coming up with a single one or maybe acknowledging each other's standards will play a definite role in succeeding you know i often Maria if you remember we will mention these this is a very regulated field a highly regulated one think about the ucp think about the ucp the international standard banking practice it's the perfect marriage between legal and tech legal and you know i see so we should come up with a straight plain seamless playground with common share rules this is the very first challenge we have to solve whether it's through the sci or something else but we have to sort it out second thing is you know promoting an inclusive approach we talk about technology with different stakeholders involved in this if one of the stakeholders is left behind in terms of technology it wouldn't work you have to play on the same level otherwise one is up there the other is up here it won't work if you want to create a seamless workflow a seamless flow of data between one point to another point one peer to another peer so democratize technology make it available include everybody in the picture and i agree with you and i think here is also the role of multilateral development banks like the iberide absolutely to bring the countries the emerging in emerging markets of developing countries to digital solutions because what is happening at the moment is that all the global banks they are part of all different consortia different platform different initiatives because they can because they have a budget for this because they have a digital strategy local banks who for example are the only ones in some countries that finance SMEs small and medium enterprises they are the ones who will not have a budget for digital solutions they will not have a strategy and someone needs to help them and development banks have a really important role to play here but they cannot only help some banks if the country specific legal and regulatory environment is not enabling this transition that's that's also something that development banks really have to step up and help countries that want to pioneer these technologies for example like Egypt i wish we would have helped them to pass the new customs law but they were they were really on the ball there they wanted to do this there were some rules in these let's say so without other you know maybe places that we can enhance yes and of course this summarizes all the rest of the points you know we mentioned in this when you say this let me end this i mean through this which i mean can picture perfectly what blockchain and plus blockchain is include don't exclude make it available for anybody involved in picture you mentioned micro small and medium enterprises this is the core of you know the area EBRD manageries you know think about the Mediterranean countries think about Middle East think about Africa which is deeply the new frontier in doing this if you don't make it available if you don't make it inclusive you won't come up with any good result yes so if you want to make this perfect marriage take a very inclusive approach and definitely that's where blockchain steps seem in my opinion yes and i guess in the in the meantime as the markets develop these there are examples of banks or countries even to run the processes in parallel just be prepared so if you develop a solution that will revolutionize straight finance and you want to go to a new market be prepared that for some time you may need to run digital and paper-based processes in parallel and it's not a joke at the beginning of for example implementation of bolero and the electronic documents of bolero in Turkey banks were printing all the documents exchange on bolero in paper form to comply with local regulatory environment so this is something that will be inevitable don't be afraid of that and just be prepared that you need to accommodate your clients or member banks member traders who are part of your solution to allow them to run a paper process in parallel as their legal and regulatory environment develops on this note yes andrea we are almost we're almost at the end and i do not see questions we have a comment that it's a very valuable content thank you so much for your comment and yes we will be sharing the presentation on on the global form platform just that's the answer to eugenia eugenia you can find i mean on the wiki page of hyperledger how to join trade finance seek so you'll see plenty of instruction on how to join us you can easily do by running the mail to the average citizen find on top of page and you'll be automatically directed so feel free to come to us it's free space as i mentioned you're all welcome to give your insights into do this i mean we'll be glad to to contribute to the discussion of course thank you so much and i guess andrea it was lovely talking to you i look forward to seeing you in person when the when we're allowed to meet and um yeah i pleasure maria thanks for giving me these opportunities thanks for those who join us today it was really interesting for me to have you here it was my pleasure thank you so much see you on trend 5 and c right