Andre Casterman of SWIFT and Michael Quinn of JP Morgan at a BPO Information Briefing.

Andre Casterman of SWIFT and Michael Quinn of JP Morgan at a BPO Information Briefing.

The Uniform Rules for Bank Payment Obligations were approved at the ICC Banking Commission Meeting in Lisbon in April 2013 and launched in Paris and Dubai under ICC Publication URBPO 750 .

 

These rules were developed by the Banking Commission of the International Chamber of Commerce (ICC), with a partnership established with financial messaging provider SWIFT to take into account the legitimate expectations of all relevant sectors.

 

Set to revolutionize trade finance transactions, BPO is an irrevocable commitment made by one bank to another that payment will occur on a specified date after a specified event has taken place. It is an alternative instrument for trade settlement, designed to complement existing solutions and not to replace them.

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“This is a golden age for trade finance. All banks wish to better engage in open account transactions and the BPO will make it happen. It is vital that the industry aligns on enhanced rules and tools and by benefiting from ICC and SWIFT standards, banks will be better equipped to carry out their trade business,” said Kah Chye Tan, Chair of the ICC Banking Commission and Global Head of Trade and Working Capital at Barclays. “The ICC Banking Commission views the development of the BPO rules and the related International Organization for Standardization (ISO) 20022 messaging standards as strong foundations for banks to provide modern risk and financing services aligned with today’s technology evolution,” he added.

The BPO provides the benefits of a letter of credit in an automated and secured environment, and enables banks to offer flexible risk mitigation and enhanced financing services to their corporate customers.

 

Gottfried Leibbrandt, CEO, SWIFT said: “The BPO, with the underlying ISO 20022 standards, is shaping the future of the trade industry and is a key opportunity for banks to innovate in the services they offer to their corporate customers.”

 

The rules were carefully prepared over a period of two years, and are the result of a collective effort by a number of ICC constituent groups, in particular the ICC Banking Commission who led this project and its members who made pertinent suggestions on the text.

 

The rules were launched Globally in Paris in May 2013 and in the MENA Region at Dubai Chamber of Commerce as part of the activities of the recently established Regional Banking Commission in June. A very informative education session was held at the ICC Banking Commission Meeting in Lisbon in April this year with the participation of SWIFT and a number of early adopting banks who shared their experiences of implementing the BPO.

 

The URBPO will enter into force on 1 July 2013 and are currently available from the ICC Bookstore at www.iccbooks.com