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Over the course of 2020, GTR’s magazine features investigated the key happenings and trends occurring in trade and trade finance.

From how the global scramble for personal protective equipment became an opportunity for criminals, to why gender-linked finance could boost international trade, GTR’s features have shed light on the major issues facing the trade community in the past 12 months.

Having analysed online page views and asked editorial team members for their long read picks, here is a rundown of our top features of 2020.

 

1) Trade finance blockchain consortia: where are we now?

Our most popular long read of 2020 was concerned with the progress, and sometimes lack thereof, of the various trade finance technology platforms that have surfaced in recent years.

GTR examined the business models, legal setup and products of four key platforms in the trade space; we.trade, Komgo, Marco Polo and Contour.

In the time since this feature was published, we.trade cut around half of its workforce after struggling to secure funding, while Contour left beta, bringing the platform into full live production.

 

2) Fraud, money laundering and cybercrime: how Covid-19 has changed the threat to banks

Nobody could have anticipated the disruption that the pandemic has – and continues to – cause.

Covid-19 brought about new opportunities for criminals; trade in counterfeit medical supplies soared, while lockdown regimes changed patterns in cybercrime, fraud and money laundering.

In the first half of 2020, Interpol stated that Covid-19 “has offered an opportunity for fast cash, as criminals take advantage of the high market demand for personal protection and hygiene products”.

Criminals have also used the pandemic as a lure for fraud schemes, targeting both companies and vulnerable individuals, as this feature reported.

 

3) Making the case for gender-linked trade finance

Although they make up half of the world’s population, women own only a fifth of its exporting companies, and these account for less than 1% of the total global procurement spend by large corporations. Yet, there is evidence to show that women-led businesses do better in some areas.

And when women do make it into business, lack of access to finance often holds them back from exporting.

In this long read, we explained why gender-linked finance can and should be used as a tool to boost the number of women taking part in international trade.

 

4) Overcoming the talent gap: trade finance industry at a crossroads

Over the past few years, the world of trade finance has found itself in a difficult position with respect to investment in new talent, hampering its ability to evolve.

Despite the best efforts of industry bodies to attract and nurture the next generation of trade finance professionals, more work needs to be done to increase the proportion and visibility of young talent in the business, which will ultimately drive its future growth.

In this feature, GTR spoke to both new and more seasoned trade professionals to lift the lid on opportunities in the sector, and discuss how trade finance needs to leave behind its old school mentality.

 

5) US vs China: the battle of the ECAs

The US and China were at loggerheads for much of last year, with the Trump administration continuing to push its mantra of being tough on China.

One way in which it aimed to do this was through the country’s export credit agency (ECA), the Export-Import Bank of the United States (US Exim). As directed by the administration, the bank set up a ‘Program on China and Transformational Exports’ to ringfence 20% of its financing authority – equivalent to US$27bn – to help the country’s exporters take on their Chinese counterparts.

US Exim has long railed that China’s system uses export credit to aggressively pursue its geopolitical goals, offering huge levels of support, and on terms and rates that other ECAs cannot match, as outlined in this report.

 

6) The murky middle ground of sustainable export finance

Sustainable finance and investment was also in the spotlight last year. As governments around the world made promises to withdraw support for fossil fuels to help curb global warming, a large financial package for a huge liquified natural gas (LNG) project in Mozambique, supported by eight state-backed export credit agencies, raised concerns of whether or not governments were serious about sustainability.

French energy giant Total secured US$14.9bn – the majority of the finance required – for its LNG project in Mozambique, making it Africa’s biggest project finance deal ever.

In this long read, bankers told GTR that export finance as a product is falling behind some others in the trade space when it comes to sustainability because ECAs have specific mandates which do not necessarily include picking greener projects.

 

7) Facing up to fraud

Singapore was rocked by allegations and cases of commodity finance fraud throughout 2020, as low oil prices and the Covid-19 pandemic triggered a liquidity crisis that exposed gaps in several traders’ balance sheets.

Commodities giant Agritrade International fell first in March, having been accused of “massive, premeditated and systematic” deception in an ING court filing. This was followed by the collapse of Hin Leong amid allegations of “fabricating documents on a massive scale” to obtain finance.

Not long after, three other oil traders – ZenRock, Hontop and Sugih Energy – were also accused of fraud by lenders that worried about possible exposures to fraudulent activity.

In this feature, GTR revealed the details of several accusations made against oil traders in Singapore, and explains why banks are, in some cases, withdrawing from commodity and trade finance, and taking a more risk-averse approach.

 

8) AfCFTA secretary general talks trade: “We have been the defenders of multilateralism”

The African Continental Free Trade Area (AfCFTA) came into effect at the start of this month, having been pushed back from its earlier implementation date of July 1, 2020 as a result of Covid-19.

In this earlier interview, GTR spoke to Wamkele Mene, secretary general of the AfCFTA, about the extent to which political will remains key to getting the free trade area up and running, and what the deal will mean for Africa, both economically and politically.

“I don’t expect that it will be an easy journey. However, I am convinced that we are off to a very, very good start. We have developed a common set of rules for trade and investment in Africa. A single set of rules, which we didn’t have before,” Mene told GTR.

 

9) Money laundering and conflict gold: banks face tough questions over Dubai trade

In this long read, GTR revealed that the UAE is facing growing international pressure over its attitude towards illicit financial activity, with details emerging of the trade-based money laundering risks in Dubai’s gold souks and free trade zones.

The Financial Action Task Force – a highly influential standards-setting body – issued a report that found the country’s dependency on gold, diamond and oil trading, its proximity to conflict zones, and its network of financial and commercial free zones continue to make it an attractive destination for criminal cash.

Failure to rectify the failings identified could lead to the UAE being added to the task force’s list of high-risk jurisdictions, leaving companies with a choice between exiting the country or facing significant due diligence costs.

 

10) The calm before the claims storm

In this feature, we examined how both Covid-19 and a plunging oil price has led to scrutiny from banks and insurers on risk selection, as the insurance industry fears a wave of claims in the first half of 2021.

A report by global insurance broker Gallagher revealed that a more sector-specific approach is being taken in insurance, with oil and gas, aviation and tourism the most “concerning” sectors to underwriters. Oil and gas was also cited as the sector that credit and political risk insurance underwriters received the highest number of inquiries about.

The research found that 71% of underwriters reduced their expectations of forecast credit income for 2020.