• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.59
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• pp.137-157
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• 2013

The Electronic Trade Finance not only has with the trait which is simple procedures, low cost but also easier access to using statistics compare to formerly paper based system. In Korea, all of trade finance system will be changed to electronic base by February 2014. The purpose of this research finds the using status and problems of the electronic local L/C and electronic purchase certificate, and suggests several improvements. First, the whole trade finance system should improve in terms of simple procedures, especially small and medium companies can use the system sufficient maximum limit. Second, the organizers, KTNET, KITA etc, need to the new electronic trade finance system promote to customers and training program for early settlement. It also has to manage at an unified system between IT and tex authorities. Third, small and medium size companies still think the charge for using high, so it need to make a resonable charge for using the electronic system to persuasive extent reasonable about it.

• International Commerce and Information Review
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• v.2 no.1
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• pp.49-68
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• 2009

In 2003, the Uniform Commercial Code(UCC) which is a kind of model law to unify commercial law between several states in US was amended to use electronic document of title including bill of lading. It is the second following the Australia legislation in 1996. Also, the Korean government amended Commercial Act and made the Presidential Decree for using electronic bill of lading in 2008. In this paper the authors reveal the characteristics of the clause of UCC for electronic bill of lading. The characteristics of the clause are on the technical neutrality of the signature, the possibility of reissuance in alternative medium, and adoption of the concept of "control." It helps to suggest some implications for Korean government authority. The authors suggest the amendment of the Presidential Decree to the Korean government authority to use additionally digital signature authorized by non Korean government such as VeriSign. It will activate the use of electronic bill of lading issued by Korea repositary out of Korea.

• International Commerce and Information Review
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• v.11 no.2
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• pp.281-300
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• 2009

In 2003, the Uniform Commercial Code(UCC) which is a kind of model law to unify commercial law between several states in US was amended to use electronic document of title including bill of lading. It is the second following the Australia legislation in 1996. Also, the Korean government amended Commercial Act and made the Presidential Decree for using electronic bill of lading in 2008. In this paper the authors reveal the characteristics of the clause of UCC for electronic bill of lading. The characteristics of the clause are on the technical neutrality of the signature, the possibility of reissuance in alternative medium, and adoption of the concept of "control." It helps to suggest some implications for Korean government authority. The authors suggest the amendment of the Presidential Decree to the Korean government authority to use additionally digital signature authorized by non Korean government such as VeriSign. It will activate the use of electronic bill of lading issued by Korea repositary out of Korea.

• Korea Trade Review
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• v.42 no.5
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• pp.233-252
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• 2017

The fast changes of global financial environment in recent years increase the risk of trade settlement. This means are required to minimize risk of non payment and to maximize secure payment. Open Account trade accounts for 90% of global trade flows. The O/A system means that the goods, along with all the necessary documents, are shipped and delivered before payment is due, usually within a time frame from 30 to 90 days. Meanwhile, Korean small and medium-sized export enterprises are compelled to globalize their activities owing to limitation and competitiveness of domestic marketplace. To keep face with the global trade settlement system and to support globalization of small and medium-sized export firms, the BPO together with Supply Chain Finance will be solutions. The introduction of the BPO system will allow banks to broaden O/A offerings to their client base and due to secure safety, sellers could ship the goods without delay according to orders and buyers could settle promptly by payment undertaking of correspondent banks. Therefore, it is more effective for companies which have sustainable customers and stable transaction. This study take a look at the trend of the global payment systems and suggested limitation of existed payment in order to derive improvement measures of electronic payment for small and medium-sized export enterprises.

• International Commerce and Information Review
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• v.15 no.1
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• pp.357-379
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• 2013

Recently, the government was introduced as currency for earning of raw materials purchasing system for electronic Government management of foreign trade in 2011, and revised regulations for electronic proof of purchase. In addition, the currency for earning of raw materials, such as procurement system in 2012, followed by electronic proof of purchase local letter of credit. The government electronic trading will be promoting local trading of electronic procedures. This study will be a preceding research on the goods control system for acquiring foreign currency and the obligation of using digitalized approval of purchase due to the revision of foreign trade law. Also, it will conduct theoretical and legal research regarding the obligation of digital establishment of the local L/C which is a result of amendments to the rules of operation for the Bank of Korea's trade finance. Further, it will analyze the legal and operational problems and its response plans for the establishment of the local trade integrated management system which promotes the digitalization of the local trade process.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.60
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• pp.141-175
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• 2013

The purpose of this study aims to the implications by the introduction of TSU/BPO system as a instrument of trade settlement. Jointly with financial messaging provider SWIFT, the ICC Banking Commission has developed the URBPO to take into account the legitimate expectations of all relevant sectors. Once the goods have been shipped, the seller's bank uploads the shipping and logistics data to the TSU to be checked against the baseline. URBPO is the first ever set of standards in supply chain finance that governs BPO transactions worldwide. BPO enables banks to reduce the risks associated with international trade to the benefit of both buyers and sellers. A BPO is an irrevocable undertaking given by an Obliger Bank to a Recipient Bank to pay a specified amount under the condition of a successful electronic matching of data or acceptance of mismatches. The BPO should be viewed as an exercise in collaboration between trading partners and their banks. Drawings upon global standards and incorporating the benefits offered by letters of credit, the new instrument has the potential to benefit all parties in a trade transaction-and bring trade settlement into the 21st century.

• Korea Trade Review
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• v.43 no.4
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• pp.1-25
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• 2018

Bank payment obligations (BPO) have been used since 2013 as a payment solution in the business of supply chain finance. The BPO is an irrevocable undertaking of the obligor bank subject to the successful electronic matching of all required data sets with the established baseline in the TMA. Although the BPO should be regarded as similar to a letter of credit, it is a new payment solution based on advanced technology and data-driven mechanisms. The BPO differs from the credit in institutional terms such as bank-to-bank obligations, automated matching engines, and transfer and confirmation, etc. The BPO can also be used effectively as a stand-alone electronic solution to traditional instruments. it provides a new range of solutions to meet the ever-changing needs of trade customers. However, Operation of the BPO can leads to several issues including an assurance of payment between recipient banks and sellers because the BPO is a bank-to-bank obligation. The URBPO does not apply to relationships between banks and their business clients. So, the primary objective of this paper is to promote institutional understanding and present implications by reviewing major issues concerning the BPO as compared with the letter of credit from the institutional point of view. This research was based on documentary research focusing on the preceding research and the materials of ICC and SWIFT.

• Journal of Korea Trade
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• v.27 no.2
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• pp.1-21
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• 2023

Purpose - The bank payment obligation is a transaction method that combines the certainty of L/C transactions with the speed of remittance payments, so the main purpose of this study is to highlight the superiority of bank payment obligation, noting the difference between bank payment obligation and L/C transactions. In addition, we would like to examine how bank payment obligations can actually be applied to support various valuable proposals such as post-shipment and post-shipment finance according to the payment process.. Design/methodology - This study focused on literature based on data from ICC and SWIFT along with previous domestic and international studies. In terms of a research method, a literature review was adopted with electronic trade-related books and journals and policy-related reports from international trade-related agencies. Findings - Unlike L/C transaction, BPO transaction verify the data inquiry process based only on the combination result of the established baseline and dataset. Accordingly, it is superior to L/C transaction in that there is no confrontation between the parties over the results of the inquiry, and clear transactions are possible according to the principle of proof after prepayment. In addition, unlike credit transactions, data inconsistency acceptance procedures confirm payment obligations in consideration of importers' intentions. As a result, as long as trade documents are in the hands of exporting countries, flexible document disposition is possible in response to the situation after payment, which is more advantageous than L/C transaction. Originality/value - Specifically, from the importer's point of view, BPO transactions have the advantage of reducing the manpower required to prepare and review trade documents and processing transaction negotiations with exporters advantageously due to the strength of payment obligations. From the perspective of the exporter, it has the advantage of enabling rapid recovery of trade payments and reducing the risk of importer's cancellation of transactions or content change. From the perspective of participating banks, it is possible to strengthen relations with importer and obtain high commission income by increasing the role of bank reduced by reducing L/C transaction.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.60
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• pp.109-139
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• 2013

This paper is to review the Uniform Rules for Bank Payment Obligations(URBPO 750E) which were developed by the Banking Commission of the International Chamber of Commerce and to present the implications. The rules were unanimously adopted during Lisbon meeting of the ICC Banking Commission on April 17th, 2013 and taken effect as of July 1, 2013. A BPO is an irrevocable undertaking given by an Obligor bank to a Recipient bank to pay a specified amount under the condition of a successful electronic matching of data or acceptance of mismatches. It is an alternative instrument for trade settlement, designed to complement existing solution and not to replace them(ICC,750E). The BPO enables banks to provide sellers and buyers with advanced risk mitigations and enhanced financing services. The BPO will improve trade processing efficiency such as increased transaction times, reduced handling cost, and others. It is believed that the BPO will have an important role to play in supporting the development of Supply Chain Finance in international Trade. So, This study will review the provisions and application of the URBPO 750E based on documentary materials including swift com and icc.org and so on.

• Korea Trade Review
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• v.42 no.5
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• pp.213-232
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• 2017

A Bank Payment Obligation is now in operation as payment instruments in the business of Supply Chain Finance since 2013. The BPO is an irrevocable undertaking of the Obligor Bank subject to the successful electronic matching of all required Data Sets with the established Baseline in the TMA. Although the BPO should be regarded as similar to a Letter of Credit, it is a new payment solution based on a technology and data-driven mechanisms. The BPO is different from the letter of credit in their structure such as a bank to bank obligation, an automated matching engine, a transfer and confirmation of the Credit, etc. The BPO can also be used more effectively on a stand-alone solution as an electronic alternative to the traditional instruments. it will provide a new range of solutions to meet the ever-changing needs of the trade customers. However, the BPO could be raised several issues including an assurance of payment between recipient banks and sellers because the BPO is a bank-to-bank obligation. The URBPO do not applies to the relationships between banks and their business clients. So, the primary objective of this paper is to promote the institutional understanding and present the implications by reviewing the majn issues in the BPO as comparision with the Letter of Credit from the institutional point of view. This research was also based on documentary research focusing on the preceding research and the materials of ICC and SWIFT.