Hyperledger Foundation Finance, 8 Dec 2020

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From YouTube: eBL: A Global Overview and the Impact of Digitisation on International Trade & Trade Finance

Description

A presentation at the Hyperledger Trade Finance Special Interest Group on December 8, 2020 by Mr. Jacco de Jong from Bolero International.

Slides are available at: https://wiki.hyperledger.org/download/attachments/41586695/SIG%20for%20Andrea.pdf?version=1&modificationDate=1607424846000&api=v2

More about the Hyperledger Trade Finance Special Interest Group is at: https://wiki.hyperledger.org/display/TFSIG/

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A

Okay, yeah just started: recording.

B

Julie julian, can I just check? Can you see my screen by the way? Can you see the slide.

A

B

Okay, super okay, thanks thanks.

A

We can that's very cool. I noticed we've got ross as well right, we've got other valero people.

B

Correct ross is starting in from australia, yeah.

A

He is it's a glass of wine time there yeah.

B

Here, it's coffee time, lots of coffee time.

A

Yeah here we are third coffee, fourth coffee, so all right so have you started recording yeah all right so I'll kick it off julian.

A

Sorry welcome everyone to um this trade finance. Sig um we've got a special uh today with with belair it's very exciting. I've been asked to just read out the um our anti-trust policy. As you know, we all have actually trust policy. uh You can read this on our web. If you want I'll, read it quickly. The linux foundation meetings involve participation by industry competitors and it's the intention of the linux foundation to conduct all of its activities in accordance with applicable antitrust and competition. Laws is therefore extremely important.

A

The attendees are here to meeting agendas and beware and not participate in any activities that are prohibited under applicable, u.s, state, federal or anti-trust and competition laws. So if you want to learn more about that, please look up on our website and happy to provide more information. I'm now going to hand you to andrea who's, going to kick off our chair who's, going to kick off uh the session today. Thank you.

A

Welcome everybody yeah I stepped in uh I'm sorry for the audio. It's not that good! I don't know. What's going on, uh you know it's my big place. You sound good. It sounds good now I don't know. What's going on, it leaps, sometimes it's locked down, but something's going wrong anyway, it's my pleasure to have yaakov today. I asked him to join us on a call and base, because I would like to to go deeper into this subject, which really imposes one of the major ones in trade finance.

A

So today will uh you know, will present us solutions devised by bolero in terms of trade clients and on electronic bills of lady, so yeah, please step in take the word.

A

So I am in the global committee for global trade finance, so the.

B

I think there's a tool coming in.

A

For your presentation, sorry that yeah jacob apologies for turning it late, but.

B

uh Go ahead, no worries, no worries.

A

I'm actually at the customer location, so apologies for that yeah.

B

That's okay! It's always good to be at customers right.

A

Yeah- and I did ask a customer: do they know bolero and uh I.

B

Know do you know he knows.

A

So, that's, that's! That's! That's where you go yeah. That's.

B

Really beautiful.

A

B

To hear cheers, thank you so so thank you all for joining and and thanks to julian and thanks to andrea for allowing me to to to do a presentation for you today. um What I will try and do today is not make it too complex and try to come in high level. So what do we do from a blair perspective?

B

How do we link you know the physical supply chain to the financial supply chain? How do we work with the traditional trades environments and the trade products, and how do we connect to? I would say you know the the latest uh initiatives out there in terms of you know: blockchain technology and blockchain initiatives out there and I'll come in from a very pragmatic perspective.

B

There is room at the end for a q a um and I I really really really ask you to please send in your questions or maybe we can open it up at the end, so everybody can ask their questions verbally because I I know it is a. It can be a difficult topic, but I'll, try and explain it as simple as I can and and I'm I'm sure it will work out. So I have a few slides for you. um I think they will also be shared after the session.

B

So let me just go to the first slide.

B

I have a small agenda for today introduction about myself global trades, why things are changing and why do they have to change and how are we involved there and then I'll go more into you know what we are doing there and how long we're already doing that in terms of you know how we connect banks and corporates and how we also you know, uh enable electronic pills of lading and how these are used out there in in in um the business and, as I said, q a in the back.

B

So just a few words about me. So you know, and who is this dutch guy with the with the gray hair and what is he all about? So my background is in trade, finance and commodity finance, mainly from the banking side, but also from a factoring and a forfeiting perspective.

B

I've done everything under the sun, I would say for the last 35 years um and I would say the last eight nine years, I'm heavily focusing on digitization in trade. um That means that, amongst other things, I'm also part of the international chamber of commerce.

B

I am working in the steering committee for digital trades and with it that I'm actually co-chairing a sub group, which is around fintech adoption and that basically is around. How can fintechs in the broad sense then be best prepared when they start to engage into discussions with, for instance, banks or other financial institutions on you know how to work together. What questions can you expect from a bank in terms of technology security, uh but even around your company?

B

So basically, what we try to do with that stream is to make it easier for fintechs to start working with these banks and these financial institutions out there, because you know we all realize digitization and technology um will play a much bigger role in trade going forward. um So that's me in a nutshell: I'm heading up the global sales force ross is on the call today from australia.

B

We have a team in hong kong, in singapore, in austria, europe and in the uk, and I'm actually based in the netherlands myself. Also at any point after today, if you have any questions, feel free to reach out. You know, I'm always happy to explain and happy to help if possible. So that's about me, um so let's go into the presentation and and and go through the slides and try to give you a bit more background on.

B

You know what is this bolero and what have we been doing and and what is our our our business area? So I'm sure you have seen pictures like this and I've I've also seen last week. You know from joel you had a lot of information about collections and electronic collections, but basically this is the space where bolero has been operating in for over 22 years.

B

um We focus on you know what we call the physical supply chains or the goods going from a to b around the globe and to enable those shipments to take place to be. You know that the the goods can leave the port and the goods can be cleared at the other port when they come in through customs, uh the port authorities um and all other things. You know we focus on the documents around those physical supply chains and we actually focus on having them in a digital format in an electronic format.

B

That's also what I'm going to talk a lot about electronic bills of lading later today, however, these documents are great and this data is great, but you need to use these for transactions underlying transactions, which can, in our case range from anything from open account. Payments means you know, just a buyer and a seller doing a transaction over the platform and using these electronic documents, um for instance, the the the seller to claim the payment with the buyer and the buyer.

B

Using these documents electronically to you know, receive the goods uh you know by handing over the documents to the local agent or the local carrier. So that's on these documents, but these documents can also be used on, for instance, under bank transactions.

B

um I'm sure you've heard about products like you know, letters of credit again joel spoke about documentary collections. um There are more transactions out there that can be done by banks or even by other parties and by other parties. I mean all these initiatives that have popped up and have matured like, for instance, contour, and all these new initiatives out there to which we connect as well I'll, come to that later in the presentation as well.

B

So, basically, you can use these documents and the data of these documents to trigger traditional trade products open account transactions, but also blockchain transactions for us. By the way it doesn't really matter if our electronic documents are used under you know a blockchain transactions on corda or hyperledger or ethereum. uh We we connect to any, um but I just want to make uh clear from the start. We are not on the blockchain ourselves.

B

We still have traditional technology and traditional ways of exchanging these documents safely, although of course you know, we also use security and we hash documents already for 22 years, for instance.

B

So, but this is the the area in which we operate, and actually one of our core components is, of course, this electronic document, this electronic transport document, which is called a bill of lading and actually the name bolero, stands for bill of lading electronic registry organization.

B

So so much about you know where we are what we have been doing for 22 years. um What we also do is we connect all the parties in this environment, so we connect corporates to corporates, corporates to banks, banks to other banks. We connect, for instance, also insurance companies. What have you that's on the platform I'll come to that later in the presentation as well so digitization it? It can deliver a clear advantage.

B

There are many advantages for going digital in trade and let me touch upon a few why they can be interested from from various angles. So if I I look at this screen- and I start on the left-hand side- and I look at cache management men- we talk to exporters. Why do they want to move away from paper? Why do they want to go digital with their documents?

B

Basically, a big driver for them is actually speeding things up in terms of you know getting paid, for instance, whether it's a site transaction.

B

They can present the documents more quickly to the buyer or even to the bank, and if it's a deferred payment, they can ask for financing much more quickly because they will get the document and the data much more quickly from the shipping company from the carrier, and they can present it much more quickly to whomever they want to get the money from. um As said, if it's a deferred payment, they can also ask for financing much quick more quickly as well additional benefit in the trade world.

B

Is that usually you have to make sure that these documents are correct, that there are no discrepancies.

B

When you start to use electronic documents, you will also reduce the risk of discrepancies, not only when you create those documents, but only should you have made a mistake. It's much more easy to quickly return a set of documents back to the presenter and say you know you have to change things because you made a mistake, then it is to do with paper documents. So again, there are additional benefits as well. If I look at the the the the almost the center of this slide, you see minimizing risks.

B

um Paper is much more open to fraud than especially in our case you know digital documents and and having uh handling data in a secured way. um We have seen a lot of things happening in the in the exactly in the commodity finance space. Recently where fraud was committed.

B

When you start to work with digital documents and and and a secure platform like bolero, you massively reduce the risk for fraud. um Just to give you one example, um these bills of lading- and again I will explain later how it works in detail- um are not only just transport documents, but they also have a function which is called. You know that they can give title. You can have actually um uh some power over the underlying goods.

B

So often these documents are, for instance, used as collateral for financing, and you know from a bolero perspective, if you are pledging such a document to a to a lender, um that lender knows that they are the sole pledgey holder. They know that they are the single holder of that pledge. So it cannot also be pledged to someone else so that risk minimizes, for instance, the risk for a for a lender, but there are other ways why it can be much easier and of course, also with this whole kofit 19 crisis.

B

um You know everybody's working from home, or fortunately, some people are going back to the office now. But you know the disruption was really really really big. When paper suddenly got stuck around the globe um documents, not you know reaching the buyer from the shipping company or not from the buyer, from or from the seller I mean or from the between the banks. um It was really a nightmare. So also with electronic documents.

B

You can minimize risks of documents getting delayed or lost, or what have you on the right hand, side you see operational efficiencies now, that's also a very interesting part. Let me focus here on the buyer side, for instance, when you see that a buyer is receiving goods um usually to to pick up those goods in the port, they will need the documents and they will need especially the the bill of lading or, in our case, the electronic bill of lady.

B

If they don't have those documents at the time that the vessel arrives or the goods need to be picked up, they will incur a lot of costs which can be. You know, demerged costs related to the carrier, but it can also be cost for you know asking the bank for a for a shipping guarantee, because you know the documents are not there and they still want to pick up the goods or they have to ask the carrier for a telex release, or they have to have different processes in place with lois. And what have you?

B

So? You know not having the documents arrive on time at the at the buyer. Side also confronts them with a lot of um problems.

B

Basically, this can all be solved with you know, using electronic documents and using um you know, a platform like bolero, so it makes clear advantages. However, let's be honest, you know in the last 22 years, digitization hasn't really really massively taken off in trade.

B

From an icc perspective, you know a lot of work has gone into. You know, updating the rules and making special conditions for electronic documents to be used under collections again to joel's point or under letters of credit, but still the market and the business is very traditional, very paper-based and reluctant to change.

B

So it is very important that these benefits are clear, but it's also important that you know the authorities, the ports, the customs, the banks, the whole ecosystem is open to move away from paper, because before you can do any smart contract, whether it's on blockchain or whether it's on any other technology, you have to move away from paper. These transactions should not be used with paper.

B

Okay, so how does it work from a bolero perspective? So, as said you know, we've been doing this for 22 years now um we are connecting parties over. You know our network, and basically this means this parties that you're seeing here seamlessly. We enable corporates to connect prints to their banks, to apply for letters of credit or for bank guarantees or stem biases. But if they're on the exporting side, they can receive those transactions as being the beneficiary.

B

um You know, and especially for large uh corporates, they deal with multiple banks and they don't want to use all these bank portals and they can just use the polio portal to reach all these banks. um It's interoperable um the legal framework I'm going to come to that in uh in the next slide, because that is really important and I also come in from you know how that is important, for you know even the the most high-tech solutions out there and, of course, a network of network. We connect.

B

We connect to anybody that makes sense from a trade finance perspective, whether it's banks on traditional products, whether it's initiatives like you, know, dlt, ledgers, comp chain, contour envoy um and many more in the in the blockchain space. um As said whether it's corda hyperledger ethereum, it doesn't matter to us as long as there is a need for transport data transport documents, smart contracts to be triggered with documents that actually focus on the physical supply chain. So from that perspective, network of networks, but we also connect to whomever we need now on the next slide.

B

Let's now talk more about what we do and and and why the platform is so important and again the platform can connect to anything, um but also within the platform. There are a few key components which I will address and hopefully that will make clear for why bolero is not just about technology, but it is also about. You know, trust, it's also about legal infrastructures, and you know it's also about the title registry.

B

So, as said in the beginning, you know we enable these electronic documents to be created. We enable them to be exchanged and we enable them to be used over the platform.

B

Now for electronic documents to work, a legal infrastructure is key. All parties handling these electronic documents must agree to how things are being done and what is the legal status? What is the validity, and how can you use these electronic documents? Now? Let me give you a very simple example: I'm not I'm not sure if everybody can see also my my my video here, but um I'm actually based in the netherlands, and let me just give you a very simple example: you know um here. In the netherlands, we have the euro as a currency.

B

Now I have here a 20 euro banknote right.

B

If I were to take my iphone here and I would make a picture of this 20 euro banknote and I would turn it into a pdf, I would digitally sign it. I would hash it. I would encrypt it. I would make it available securely over the bolero network to any of you attending this session today and you would receive it. Have I really given you 20 euros at that moment, not really I've. Given you an image of a 20 euro note, I still have the original here in amsterdam.

B

I can still spend it and- and you have in a very secure way, maybe even a structured data way. You have an image of a 20 euro banknotes, but you can't really use it now. You can imagine from a bolero platform um if you have an electronic bill of lading, um which is a contract of carriage, which is a title document, as I said, which is a negotiable document. As I said, you need to be sure that it can be used that it has value now for me, as a person here to turn this into.

B

You know digital currency right now, for instance, I would have to go to my bank. I have to deposit it into my account and then I can electronically transfer 20 euros to you in our scenario, for an electronic bill of lading to be really working and to really be able to be exchanged between parties. We have what's called the legal framework which we call the rule book, so that means that all parties involved in the use of an electronic bill of lading have agreed to the bolero rulebook have agreed to the bolero legal infrastructure.

B

So that means, if a carrier like a cma or an evergreen or a maersk, if they create an electronic bill of lading over the bolero platform and make it available, for instance, to the exporter, it is a real electronic bill of lading. It is a contract of carriage it. Actually, if you look at, you know the pdf version of it, it looks exactly the same as a paper bill of lading, but it also has the same functionalities.

B

You can endorse it. You can hand it over to a bank as collateral for financing everything you can do with a paper bill of lading. You can do with an electronic bill of lading. So what I try to say here, it's not about you, know the data. It's not just about the image, it's not about the secure transfer of a file or you know hashing it what we do as well.

B

We fingerprint it, but it's also you need to have the legal infrastructure and to support it to make sure that it can actually be used, as it is intended to use the next thing on the center there on the bottom. What you will see is the title registry um again coming back to the bank.

B

Note, if I have a paper bank note and I would hand it off to andrea, for instance- and I put it in his hands- let's say we're in the same room: it's clear that andrea is now holding the 20 euro banknote in an electronic scenario or a digital scenario.

B

You also want to make sure that if you know the document passes from one party to another party that it is absolutely clear who is holding the original at any given point from a bolero perspective to to control that transfer or handover of documents or giving title or endorsing all of that is registered in what we call the title registry. So that's a function within bolero which at any given point, is absolutely certain of, for instance, who is holding the original electronic document.

B

If you compare it to to blockchain language, it would be a notary function. So basically, we act as a notary where we are always 100 sure who is holding the original document when again, a very important feature and a feature why uh you know even the blockchain initiatives come to us. You know, because I said you need a legal infrastructure. As said you need a title registry, and- and we support that um I'll talk more about bill of lading in a second, how it actually looks and works.

B

But you know this is just to set the the the the outline for you know how and why it works and why you need more than just data or you just need more than a a a a a a smart contract, or what have you, um of course, the platform needs to be secure.

B

We connect all these parties. We also have data matching elements in there as well, um and, of course, these documents are flying over on the right hand, side you see the network, which is another representation of what I explained earlier and on the left hand side you see um just as as a sample some of the things we offer um I'll go to each of them.

B

Some a bit longer some a bit smaller, but basically we offer a lot of applications which can be used um either uh via our web interface or which can be used also from an api uh connectivity. If we linking, for instance, to other platforms or other solutions out there and those are in the areas of lesser credit, guarantees um e presentations, which can also be in relation to collections.

B

For instance, we do have a supply chain solution, supply chain, finance solution which, for instance, one major bank has been using that already for a long time to automate supply chain finance. They have supply chain finance program.

B

Where you know, data from a purchase order is matched against data from the actual invoice and a and shipment data, and then, if the seller would like to receive financing that whole process is matched automatically and managed automatically, and that's why we provide you know the the data matching as you see, on the on the right on the middle on the on the platform side and, of course, electronic bills of lighting.

B

So in terms of using this, so what we notice is, we have two type of main users, so we have main users that use um the the web interface.

B

We are now rolling out our new web interface for our clients to use bolero, as said with their banks, with their carriers or using electronic documents, or what have you? um The name of the new technology platform or the new? The new user experience is called galileo, it's extremely intuitive. um We have you know rolled this out.

B

We've been, I said, you know over 20 years in this business, and I can tell you in 20 years you get a lot of client feedback um from you know all these all these different areas and we've incorporated all that feedback to make sure that you know the user.

B

Experience is up to date, but also in the background we've ensured that you know, since connectivity is key these days, that the galileo platform and the bolero proposition can easily integrate with you know any other solution out there, whether it's erp systems as clients, whether it's back office systems at banks or whether it's blockchain initiatives out there and that can be done by simple api calls and protocols.

B

That is how we operate from focus on this session today. One of the services we provide is ebl as a service electronic bill of lading as a service, so any um smart contract um initiative out there that would like to you know, connect to bolero to enable the use of electronic bills of lading to either trigger the smart contract or to be part of the conditions of a smart contract.

B

We can enable that in the background, so we also sometimes see that the actual users of the transactions are using um third-party applications and then we are just in the background there to facilitate and act as the pipe, for instance, between the shipping company and and the initiative um like, for instance, to the sellers and the buyers and and the solutions out there. So that's basically from a technology perspective, we are very agnostic and- and we are very flexible- to connect whomever we need to connect to um yeah.

B

I won't go through this too much um so basically um letters of credit. That's uh you know where the clients and the banks can communicate on and they can utilize them. I'm going to switch to to the bills of lading, because I think that's most relevant for the audience today. um Of course, guarantees can be handled over the platform and then, when I say guarantees I mean bank guarantees, but I also mean standby letters of credit.

B

um You know we have customers that do thousands and thousands of these transactions over our platform with multiple banks and, of course, when you look at to multiple banks, we have over 70 banking groups globally connected to uh to bolero big names, small names, and even when you see a big name, it doesn't mean just one location, but it means often you know globally.

B

So we have a big reach out there for all these clients um and, of course, the corporates right in the end, everything we do- and I think this is true for any initiative out there. It's all about the corporates, it's all about the customers, you do everything for the customers to either make their life easier or to enable financing for them or to enable things to go faster, less risky.

B

That is what we do and that's what we are in this business already for so long, and if you forget about you know, what's in it for the clients, what's in it for the corporates, then you might as well close shop. That's the most important thing so, um of course, to be able to be an electronic bill of lading provider, an ebl provider.

B

You are nowhere. If you don't have the network, if you don't have the network with the carriers, carriers are the shipping companies. You know these vessel operators, we have over 200. Actually we have around 230. I think the biggest count is and we have major carriers like, for instance, you see here names like evergreen and cma, with whom we are fully integrated into the back office environment.

B

So if, if you would go to these carriers and- and you would look up- you know e-bills of lading on their websites, um you will probably not find the name bolero there, but we are actually there in the background, um facilitating you know the the the the electronic bill of lading and, of course, our legal infrastructure is also the basis thereof, and also the the platform is also in the background to exchange these documents and this data securely.

B

So there you won't see us prominently, but we are there in the background, but even for a small carrier that maybe does a few shipments. We also have a web user interface and they can also get going with us. So for us it doesn't really matter again. It is the corporates who are in the driving seat if a corporate for a for instance for a short shipping route, doesn't want to take the risk of you know these paper documents taking too long to go from a to b and wants to use electronic bills of lading.

B

You know they typically come to us and together with them, we do our utmost to make that work for, in this case, for instance, a short shipping trial. We were the first. There are more initiatives out there. There's competition out there. We also see a lot of very new initiatives out there, the underlying technology. Honestly, I think it's irrelevant, um and I maybe you know I know I know I'm talking to the hyperledger community now so, but I think the underlying technology is irrelevant.

B

It is about you know: what does it solve? What does it do? Does it work? Is there adoption? Does it make sense? And, and and do you have the proper infrastructure to make it work in all these countries, and- and you know that people are comfortable with it um technology?

B

If you talk to the corporates, you know they couldn't care less about the technology, whether to put this very black and white. If it's an excel sheet or if it's you know a a hyperledger solution as long as it relieves them from issues, pain, problems, uh speed things up gets, you know, then they're open to it. So I'm also in our perspective, you know our technology, you know we're we're web-based it's software as a service, but I hardly talk about the technology.

B

When I talk to our corporates and our banks and all other clients around the globe, it is more about you know what does it do and how does it help me in my day-to-day business, but I said we were the first. We we still like to think ourselves of the coca-cola of the electronic bill of lading. There are more initiatives out there and honestly. I only welcome that, because you know um there there is so much ground to cover globally and um you know the the the more the merrier from that perspective.

B

Now, let me go more into you know: electronic bills of lading. um What is it and and how does it work and why does it work? So um let me explain for those of you who are a bit unaware, maybe of what a bill of lading is uh what it is and how it how a paper one is different from an electronic bill of lading.

B

So a bill of lading, in essence, basically is a contract of carriage um to you know enable a a set of goods to be shipped from a to b and the the shipper. The exporter will then receive this document from the shipping company, and basically it will has a few functions, so it's a contract of carriage. It also is a negotiable document. If it's issued like that, which means that it can be used to to be transferred to another party, it is also a title document, so that means it gives control of the goods.

B

And that's why I said you know. Sometimes, banks love to get a bill of lading from a client if they're financing, because then, if the loan is not replayed, they have somewhat control by having the bill of lading and then they can. You know, exercise their right on the pledge and try to recover the lost, for instance, from selling the goods um and it's a document that is being used. You know widely, I would say, for hundreds and hundreds of years all around the globe. So it's a very important document in trade.

B

I would say it's for ocean-going shipments, it's the most important document out there and it's widely used. So what's the difference between a paper bill of lading, an electronic bill of lading, a few things? First of all, of course, stating the obvious it's electronic instead of paper for it to work. You need this legal infrastructure for it to work. You need to have a way to exchange them securely and have that tracked in a title registry.

B

That's what bolero is all about, but also, if you look at the bill of lading over bolero, you will see a few differences. The first difference. What you will see is normally a paper bill of lading is issued in three original and a few non-negotiable copies. The reason for that is again very old-fashioned.

B

um You know, usually in the old days one original used to travel in captain's mail. You know with the the the captain of the vessel, he would have one copy. um The client would present these other two copies, usually to a bank, for instance, under a letter of credit, and the bank would send those documents in two separate mails to the other bank of the buyer, and you know hoping at least one of them would make it to the end uh and for the for the transaction to be used um in taking.

B

When are you looking at an electronic bill of lading? There's, always just one original, because it doesn't get lost, it doesn't get delayed. So why have three copies? It doesn't make sense. So this is one original, that's the first big difference. The second big difference is: if you look at the paper bill of lading, you will see that people have signed it with a wet signature.

B

Of course, in a digital environment, it doesn't make sense to have an image of a of a signature. You need to have a digital signature from a bolero perspective. Again, the legal infrastructure, the rulebook covers the digital signature.

B

Another question I always get yeah is that digital signature is that, in line with my local regulations in my country- and I can tell you often- it probably is not the case, but because all the parties acting over bolero have agreed to the legal infrastructure which is based on english law.

B

Then, if all parties agree to the rule of the game, it can work all around the globe, regardless of any local deviations or what have you so? The digital signature represented by words, if you look at it on the image, is covered by the legal infrastructure by the bolero rulebook.

B

The last main difference is that normally, if you would endorse a bill of lading, so I would say you know this. Bill of lading is mine, but I'm now going to endorse it to andrea. In a paper scenario, I would put a stamp on it and I would say you know for me and now to the order of andrea in case of an electronic bill of lading. That is done by updating this title registry. This notary function um again, so you won't see an an image of a stamp.

B

For instance, if you look at the pdf file, which is a visual representation of the electronic bill of lady other than that, an electronic bill of lading looks exactly the same so clients, if they see an electronic bill of lading they'll, immediately recognize and understand it.

B

It has the same front, the same back, the same colors, because, of course, it's issued by the exact same carrier that would issue a paper bill of lading. So hopefully in a nutshell. This explains why a bill of lading is what is different between electronic global and build lighting. But actually the usage thereof is exactly the same as a paper build of landing from a smart contract perspective and from an from a data exchange perspective. Of course, there is also data behind it.

B

Some carriers provide you know the raw data in xml format to us. uh Some only provide metadata at a higher level, but of course, these documents can be used in connection to smart contracts, for instance as proof of performance or, for instance, we can go as far as having a conditional release of these documents. By saying if a smart contract has been triggered correctly, bolero will automatically release the documents from the seller to the buyer, so the buyer can take these documents and actually take possession of the goods.

B

um That's also a very interesting element: we're now doing that, for instance with the marco polo project again a blockchain initiative, where you know it's one thing to trigger a smart contract, but the buyer and the seller would need still need to exchange. You know the documents or the the title, for instance in the background, so that the other party can pick up the goods and clear them through customs, for instance. So that's where you know we.

B

We introduce the element of a conditional release whereby we act as a call it an escrow or or a secure party that will then enable these documents to be automatically exchanged between the parties once, for instance, a smart contract has been triggered positively, I'm just checking for time. Okay, I do want to leave some room for questions so I'll go towards wrapping it up now.

B

So what are electronic presentations? Electronic presentations basically means that our clients, again I'm not going to repeat them all- use these electronic documents under transactions. Anything from open account to traditional trade products, also, like the collections that you all were speaking about, but also blockchain transactions, for instance like the the the electronic lcs over over contour, for instance.

B

For those things to be able to happen, it's not just the fact that you need electronic documents or data. You would also need those transactions to be enabled to use electronic documents in case of traditional letters of credit, for instance, they are usually used with paper documents. If you want to start using electronic documents under traditional letters of credit, which is perfectly possible, um then for instance, you have to change the the the the rules or you have to change. You don't have to change the rules.

B

You have to mention that other rules apply and in case of a letter of credit, it would be normally the ucp 600.

B

But if you start to use electronic documents, you would have to say that the letters of credit is subject to the e-ucp. The electronic rules, for you know, handling letters of credit. um The same goes for. If you want to start using electronic documents under collections, um you would have to say that that collection is subject to the e. U r c. So those are the electronic rules or the rules for electronic transactions for documentary collections. Again, these are all icc publications, um especially the eucp and the eurc are available free of charge to download.

B

If you go to icc.org website, you can download them for free, and then you can see what those those e rules entail. But basically you would have to make sure that those transactions are subject to those rules for it to work, also, of course, in those transactions. You need to make sure that the conditions are in line with using electronic documents.

B

So you should no longer say that documents have to be presented at the counter of a bank at a certain date, because now you would have to say that these documents have to be presented over the bolero platform at a certain date and of course, you would have to make sure that the documents that are prescribed are no longer.

B

You know paper documents like three thirds original author bill of lading but, of course, electronic documents, and that's where we help our clients, with templates with guidance, um often with hand-holding through the first transactions, because it's not easy to to to think or rethink the way. You've been doing uh your transactions for for decades. I would say and start using electronic documents or- or you know, even those, those those smart contracts and basically so the what you would need is then a platform like borrero to do that, and this is not a sales pitch.

B

I'm just trying here to explain how we work so final slide and again it's it's it's in the deck that you will be receiving after today, going digital, whether it's you know just going paperless or whether it's you know moving to to smart contracts or or elcs or or e-collections.

B

um There are benefits in it for all parties. Here you have the highlights from the seller's perspective, from the buyer's perspective, from financial intuitions and from carriers, but it is not that you know here is the solution? Have a go good luck. You also need to be able to help these customers on the journey. I often say that you know in in in trade finance digitization is is, is not a revolution, it's an evolution.

B

It is, unfortunately, a slow process also because there are so many parties involved, if only it was just a buyer and a seller, but you have customs regulations, you have shippers, uh you have the the carriers, you have the customs. There are so many parties involved which doesn't always make it easy.

B

But if you come in from a business angle, you know you will succeed. So having said this, and knowing we have, I would say a little over 10 minutes left in the session. I would love to open it up for questions so andre. I'm not sure how you want to go about the questions. If you would like to have the questions in the chat or if, if we open the open up the sound for people to ask questions.

A

There are a few questions that were, you know given to me on the chat. uh First of all, you know yako we're talking about ebills of living, but you know being both of us trade fans, petitioners. What about the rest of the documents which are usually required to be presented under normal collections or in lc? You know that nothing else is calls, for instance, insurance certificates or policies.

A

They call for advocates of origins. uh What is the stasis in digitization in terms of these documents.

B

Very good question, so um let me come in from two angles: there so, first of all um to trigger trade transactions like, for instance, a letter of credit, a letter of credit can be payable against almost anything, so a letter of credit can be payable against an unsigned invoice alone. If you want to, of course that is very minimal.

B

So in practice you see that you know a lot of documents are prescribed to be presented under a letter of credit. um It isn't necessary, but this is what happens so what we see with our customers, what they do under the letter of credit they, for instance, you know they. They will of course, always prescribe. You know an invoice and packing this and weightless what have you they will prescribe an electronic bill of lading. uh Of course, you know, as as as the transport document other supporting documents.

B

What we see is that sometimes under the lcs, copies of these documents are presented on the dlc so, for instance, a copy of certificate of origin or a copy of the fight sanitary certificate.

B

Reason being that there are currently, I would say, no global standards. Yet on these other supporting documents, however, however, however, we are very closely involved in those initiatives where it comes to electronic certificates of origin or when it comes to electronic phyto sanitary certificates. That's a certificate mostly used in in in agri and we're working closely with, for instance, the the the the grain council on that one as well. So so there are things happening in that space, um but it is still early days for all documents to be truly digital and globally accepted.

B

So sometimes what we see- and that's also, why I say it's an evolution, not a revolution, to enable these transactions and- and I mean the underlying shipments to be affected globally. Sometimes some documents in a paper format have to travel directly between the seller and the buyer.

B

Unfortunately, that is still the case for some jurisdictions or some countries. However, to trigger these trade transactions, you know that can be done fully digital, so it's a split. Fortunately, maybe I can elaborate a bit more is what we see out there now. Is that and again kofit 19 has been a big push there as well. Is that governments are opening up much more now to digitization just to give you one example: peru in south america has said you know within a few months, for any importer export going into and out of peru.

B

Electronic documents should be the norm and paper documents should be the exception. So we see that things are happening, but honestly it is a transition. It is a transition. The world is not digital yet totally when it comes to trade, finance.

A

Absolutely you know, uh uh you know what my thoughts are, because we we often saw except the yakko. uh I agree with you, it's slow one, uh but it will happen. You know. Basically, it's just a starter cover. 19 just gave very spark to it. I.

B

Definitely, and and what I can tell you without mentioning the name- you know one of our carriers. um Between the month of march and april of this year we saw a uh an increase of volumes of electronic bills of lading issued by the factor of four it quadrupled.

B

um So we saw that you know the the the companies, so I mean exporters and importers moved to electronic bills of lading. We didn't see that exact same spike on the banking side, so that means that the banks are moving less quickly or are less flexible. Maybe I should put it like that to to quickly move to doing more e-presentations and handling electronic documents, so corporates are very quick to adjust and apply, and that also comes back to my statement at the beginning. It has to make sense to the corporates.

B

So why did they quickly jump, and why did these numbers quadruple in in in in april, compared to march is because the paper documents got stuck at that time and they thought? Oh, you know these. These. These carriers over bolero can offer these electronic bills of lading. Okay. Let's use that because we want the trade to continue.

A

But absolutely what I noticed is bank are very slowly reacting. Maybe they had investments in legacy systems. I don't know why, but really they are stuck on traditions and stuck and prepare, for there are two more one is related to the the bills of lady and, of course, both of them actually and first thing is what about the endorsement. You know pills of ladies, be often those whether you're, on the recollection or under an lc yeah, be indoors sooner or later.

A

How these this happen in an environment, electronic environment. How this is a.

B

Very good question, so the endorsement is a a very normal feature indeed for paper bills of lading and it's also a very normal feature for the bolero electronic bills of lading, so the endorsements are being handled and registered in this title registry. What I mentioned so the title registry once I would endorse the bill of lading to you, andrea.

B

The title registry is actually updated with this endorsement and now it is very clear that I have endorsed this bill of lading to you. If you would then endorse it to the next party and to the next part to the next party each time the title registry is updated, there's an audit trail of that and basically it mirrors the paper process. If you endorse a paper bill of lading three, four five six seven times, you will see a string of stamps and and signatures um in in a bolero environment.

B

You will not see those stamps and signatures actually in the title registry, you will see the endorsement trail and you will also see who is the latest. The latest party to whom the bill of lading has been endorsed. Basically, an electronic bill of lading anything you can do with the paper bill of lading. You can do with a um an electronic bit of lighting. Maybe if, if you permit me, I would also like to explain very quickly that sometimes the chain breaks so sometimes let's say andrea.

B

You want to uh to endorse the bill of lading to julian, for whatever reason and julian is not on bolero uh or for whatever reason you know doesn't want to receive an electronic bill of lading, then you andrea as being the last holder of this electronic bill of lading. You can request the shipping company the carrier to replace the electronic bill of lading with a paper bill of lading that actually mirrors and replaces the electronic bill of lady.

B

So if julian, for whatever reason, needs a paper document, he will then have three thirds original bill of lading, which he can use, for instance, to clear the goods locally, because in reality sometime the chain breaks, and we have a mechanism for when if the chain breaks that you can always go back to paper, it's not that you print it off yourself.

B

No, you have to request the carrier to provide you with a paper bill of lading to replace the digital bill of lading, and that is also covered by the legal infrastructure it's covered by the rule book, and we see that, for instance, a lot in in china. Where sometimes you know, the final buyer is not known until last minute or for any other reason. So we also have a mechanism to act and to handle if the chain breaks at some point, which I can tell you happens in reality,.

A

Absolutely so um just one more question from our friend joelle uh I really reading with the increasing number of video or e-bills of lading providers. How do you see the e-bill of lading landscape evolve if each e-bill of leading platform manages its own digital original document, each with raw notary function? How do the zbill of latin documents become possible across different platforms?

A

B

Good very good question, very good question, of course you know being the first 22 years ago that that that problem, if I may say, did not exist because we were the only ones and over time you know, other players have come into the market and- and I said you know- I welcome that because um I I often call it a blue ocean to stay in the shipping terms, there's there's so much to do um of course, right now on the paper bill of lading.

B

Of course, you know you have the same issue right if a paperblade is issued by one carrier, the other carrier can't really do a lot with it. um But what is happening right now in the background, which I think is very good, is that all these parties are now talking to each other so right now again, this is a driver from the icc. There is the digital standards initiative, the dsi, where we are talking together with these other providers. Okay, can? How can we think about interoperability?

B

How can we look into? Maybe you know either synchronizing or connecting the the the legal infrastructure, the rule books and stuff, so those things are happening. We are very actively participating in that as well. um So I think over time there will be interoperability.

B

um I don't think that there will be just one winner and that everybody will turn to that party. No, um for whatever reason you know, people will always select one or the other, um but I think definitely the dsi the standards initiative now from icc.

B

I think one of the first sessions actually happened this week and interoperability is a key topic. That's going to be discussed and addressed there.

A

Absolutely yeah: this is a very important question and I was planning to ask you too. I mean from my side what's the possibility if we have in some ways to compete with what is happening or to let's say reproduce.

A

What goes on in the material world physical world inspirability is absolutely one thing that has to fix and possibility as well. You know all things work in real world from bank, from corporates to the bank and to the other bank in the importing country that should be fixed.

B

Absolutely 100 correct andre yeah.

A

Any other questions from the attendance uh gentlemen.

A

Julian or ross.

B

A

No, I don't think I think we're coming very much to the end here now anyway, right, that's a great presentation! um Thank you very much. A long question I may add is you. You said that you're working with some of the the blockchain. Obviously this is about blockchain here, um but I I assume you're working with. I know you're working with a number of platforms. um How do you, how do you interact with uh with uh with the blockchain like the we doctrines, the dlc ledger? How do you interact with them.

B

Yeah very, very good question julian. So basically what we do there is we we we enable the use of these electronic bills of lading under these transactions. So just just to give you one example: maybe contour is a nice one um where um the the exporter can then pick up the bolero electronic bill of lading and make that available, for instance, to the negotiating bank. um They don't access the bolero platform, they meaning the the exporter they beating the bank.

B

We are just a pipe in the background enabling the electronic bill of lading to be used and enabling the the legal infrastructure to be used, enable the title registry to be used, and basically, by means of you, know, api connectivity. Those documents can be used under these transactions. For marco polo, for instance, we go one step further. That's when I talk about you know this conditional release, where not only we enable the use of these electronic bills of lading under these transactions, but also we act as sort of an escrow where you know.

B

If we hear back from marco polo that the the the markup transaction has matched that you know, the everything is in order, we will automatically transfer the documents you know to the buyer and, of course they need those documents so thereby reducing the concern of the buyer that hey my smart contract is triggered. So probably I will be debited, but you know how do I get my hands on the documents that I need to to to?

B

You know obtain the goods from the from the from the port, so um from our perspective is basically that's why I mentioned with you know: ebl as a service electric bills lane as a service. That's how we connect to these these various initiatives, and it depends on what the nature of the initiative is. Is it a finance platform?

B

Then we enable, for instance, the function where you know the the bill of lading can be pledged to a lender, for instance, as security for financing. So it depends on the nature of the of the initiative, how we actually interact, but it's it's. It's done by api connectivity.

A

Okay, excellent, thank you really, yes, uh yakuo yeah station and so glad to have you here. Hopefully we'll have the chance to hear from you again in the future as we agreed upon so stay tuned guys and we'll have more insights from yaakov and bolero in the future, and thanks everybody for attending we'll see in two weeks time. We're gonna have one more very interesting presentation.

A

It's all take care. Everybody thank.

B

A

A

Have a nice day.

A