Commerzbank and the Industrial and Commercial Bank of China (ICBC) have completed a live bank payment obligation (BPO) transaction to support the export of chemicals from China to Germany.

In this case, the BPO replaced the documentary collection previously used by the importer, TRIGON Chemie, and the exporter, Yangzhou Sunny Trade Company.

According to Commerzbank, its customer TRIGON chose the BPO for its ability to provide assurance of payment at the due date, faster handling of goods, earlier receipt of trade documents and optimised processes.

Agnes Vargas, regional head for Greater China and Asean at Commerzbank, says: “We are very happy to have concluded the first BPO transaction between Germany and China. Our client, TRIGON, showed an early interest in BPO settlement, so the challenge was to find a bank on the seller’s side able to handle this type of transaction. We believe it to be a significant step forward for BPO settlement between the two countries.”

Commerzbank processed its first two live BPO transactions in October 2014. In August 2016, the bank performed another four-corner BPO transaction with UniCredit, for the export of chemicals from Ireland to Italy.