Collaboration between KITA, KEB, China International Electronic Commerce Network, The Bank of Tokyo-Mitsubishi UFJ and SWIFT announced

The Korea International Trade Association (KITA), Korea Exchange Bank (KEB), China International Electronic Commerce Center (CIECC), the Bank of Tokyo-Mitsubishi UFJ and SWIFT today announced new initiatives designed to deliver trading efficiencies and enhance the attractiveness of Korea as a global trading partner.

The first initiative is to introduce electronic presentation of letter of credit documents to globally exchange high volumes of letter of credit document files securely and cost-effectively.

Through the second initiative KITA will be able to extend trade payments to an open account basis, which has become the prevailing global trade payment method. By adopting this trading method and relying less on Letters of Credit, Korean corporates will be better positioned to forge closer links to global trade markets.

These two collaborative ventures were announced during a signing ceremony in Seoul, presided over by the heads of the five signing parties: KITA Chairman Hee Beom Lee, and KEB CEO Richard Wacker, SWIFT CEO Lazaro Campos, and executives from CIECC and Bank of Tokyo-Mitsubishi UFJ.

“KITA will become an early adopter in electronic trading for corporates for Asia. By linking up with stakeholders in other countries, such as CIECC, these initiatives are transformed into a regional collaborative effort and promise to enhance the attractiveness of Korea as a global trading partner.” said Lazaro Campos, CEO of SWIFT.

The benefits for banks and their customers were outlined by Korea Exchange Bank and Bank of Tokyo-Mitsubishi UFJ:

“By introducing the SWIFTNet FileAct service, Korean banks can achieve significant savings through electronically exchanging Letter of Credit file documents between Korea and the country’s major trading partners. China will be our first pilot country and we expect to reduce costs caused by delay and loss of documents by 40 percent, saving USD 600,000 in a year,” said Shine Won, Kang, senior manager of Korea Exchange Bank.

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Notes to editors
Financial supply chain project descriptions:

Two projects have been identified by the working group established by KITA, KEB and SWIFT, both will create financial supply chain efficiencies for Korean corporates:

In the first project the objective is to introduce electronic presentation of letter of credit documents (generated by uTradeHub through SWIFTNet FileAct) and replace the current method of physical delivery by courier. This can help the trade community achieve full automation of paperless trade, reduce overall processing cost and eliminates the risk of document loss. This will also significantly decrease payment delay and interest loss caused by the current physical delivery method.

In the second project the objective is to provide Korean corporates with new trade and supply chain financing services. Korean banks will have greater visibility of commercial trade transactions to develop risk mitigation and supply chain financing services for exporters and importers. Corporates will be able to exchange data directly with their banks, through uTrade Hub using international standards, without building a separate front end system, making adoption easier and faster. This is the first implementation globally using this model.

KITA’s uTrade Hub aims to become the core platform for trade covering both traditional Letters of Credit and Open Account trading.

About SWIFT
SWIFT is a community-inspired co-operative, founded by and for the financial services industry. We work globally in 208 countries with more than 8,400 organisations, including banks, market infrastructures, securities institutions, corporations, network providers, business partners and technology companies. Our aim is to ensure the financial world can carry out its business operations with certainty.

Our role is two-fold. We provide the platform, products and services that allow our customers to connect and exchange financial information securely and reliably. We also act as the catalyst that brings the financial community together to work collaboratively to shape market practice, define standards and consider solutions to issues of mutual concern and interest.

For more information, please refer to www.swift.com.

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