The International Chamber of Commerce (ICC) has launched a roadmap for digital trade in financial services, which will work as a communication tool for the industry to engage with policymakers in creating rules and standards for digital trade finance.
The Digital Roadmap Project is a stream within the ICC’s Digitalisation Working Group, and its roll-out is being managed by a group co-chaired by Chris Southworth, secretary general of ICC UK, and Alexander Goulandris, co-CEO at essDocs, a provider of paperless trade solutions.
The global strategy targets three groups within financial services: governments (including national governments, inter-governmental institutions and regulators), the wider industry (including companies and financial institutions that participate in trade finance) and the ICC itself.
The long-term action plans for the industry at large include adopting new technology to reduce costs associated with access to finance, as well as integrating solutions for customers, documents and trade finance into “one-stop shops”.
For governments, the roadmap outlines an eight-point action plan, including adopting of the United Nations Commission on International Trade Law’s model law for electronic transferable records; fulfilling 2013 World Trade Organisation (WTO) trade facilitation agreement obligations; securing a 70 to 90-country WTO e-commerce agreement by 2020; and implementing a regulatory regime for the treatment of low risk trade finance, including reduced capital allocation requirements for digital trade instruments. It also calls for governments to implement a single-window system – standardised information and documents for all import, export and transit-related regulatory requirements.
The roadmap has been in development for two years and came about because of the realisation that there was much talk about digital trade, but that the industry had no “direction of travel”, said Southworth in a presentation of the roadmap at the ICC Banking Commission Technical Committee meeting in Tbilisi, Georgia, last month.
“In good policy practice you have a roadmap to help you do that. Particularly in this context, where you have a very complex set of stakeholders and different pockets of activity. This will ensure that that everyone can see clearly what their roles and responsibilities are, but also what the objectives are,” he added.
Government engagement is essential to the project, he explained. “[The industry] can design rules, but we need change in legislation. We need a regulatory harmonisation globally across borders; we want rules to talk to each other in different countries. We need our governments to engage in that process and help us create an enabling environment for our rules and standards to then play out.”
A former policymaker himself, Southworth told the audience that governments are going to make decisions “either way”, which is why it is important for industry players to make it very clear what they are asking for. “If governments don’t understand, then they’re going to put in place a rules-based framework which is not necessarily going to align to [the finance industry’s] own priorities.”
Speaking to GTR this week, Southworth noted that the appetite for this kind of tool is much greater now than it was two years ago. “It’s a reflection that things have moved on – the technology, the policy and the conversations. There’s a sense of urgency, so it’s a bit like we’re pushing on an open window,” he says.
The ICC has stressed that the roadmap is not a static document but that it will be continuously adapted in light of rapidly-evolving trends and contributions from industry and public-sector experts.
To that end, the group has circulated the roadmap to all ICC offices, which will be seeking member engagement and feedback on the document, as well as to institutions and governments.
“We’ve already fired it around the WTO, so 60 countries got it last week,” Southworth says. He explains that the initial plan is to hone in on authorities in the major financial centres: China, the US, the UK, Germany, Singapore, as well as the ecommerce convenors in the WTO: Japan and Australia. They have also added G20 2020 hosts Saudi Arabia to the list.
Based on industry feedback, a second version of the plan will be launched at the ICC Banking Commission’s annual meeting in Beijing in 2019.