Kirja edastamine

August 2024 Invitation to start negotiations to form a new consortium .Digitalisation of. .Trade, Trade Finance. .and Logistics. Input to EU Member States, EC directorates DG Trade, DG Fisma, DG Move, DG Connect, DG CNECT, DG Mobility and Transport DigitalTrade4.EU Riho Vedler Alex Lheritier Philippe Henry 1 Ramena OÜ Koaloo.Fi Dewenson Partners [email protected] [email protected] [email protected] France joins MLETR club, recognising ‘Titre Transférable Électronique’ June 5, 2024. Trade Finance Global France’s adoption of MLETR is part of a broader effort to harmonise digital trade practices around title trade documents around the world. The adoption is also expected to stimulate economic growth by making France a more attractive place to transact, trade and finance, while supporting innovation and sustainability. France’s adoption of MLETR follows the UK’s recent enactment of the Electronic Trade Documents Act, signed into law in September 2023 by King Charles III. Digital trade documents are expected to cut transaction processing costs by up to 50%, with projected savings LAW no. 2024-537 of for France reaching €3.6bn within the first decade June 13, 2024 aimed at of implementation. increasing business financing and the attractiveness of France [Read the full article] https://www.legifrance.gouv.fr/jorf /id/JORFTEXT000049707573 India mulls overhaul of trade finance market June 5. 2024. Global Trade Review India’s government has commissioned a wide-ranging review of the country’s trade finance sector, including examining the role of export credit agencies and the possible introduction of laws recognising digital trade documents. The Ministry of Commerce and Industry believes a lack of trade finance is holding India back from achieving its target of exporting US$2tn-worth of goods and services by 2030, more than double last year’s figure of US$765.6bn. In a tender document issued in January this year, the commerce ministry sought a “knowledge partner” to “benchmark best practices in global trade finance and fintech, identify gaps in the current structure and propose policy recommendations and innovation solutions to enhance the overall efficiency and effectiveness of the trade finance ecosystem in India”. [Read the full article] 2 Small and medium-sized enterprises (SMEs) represent 99% of all businesses in the EU. The digitalisation of trade and logistics plays a crucial role in improving SMEs liquidity in the EU through several key mechanisms: 1. Enhanced Efficiency and Speed • Reduced Paperwork and Manual Processes: Digitalisation eliminates the need for extensive paperwork, accelerating processes like invoicing, customs clearance, and documentation. This reduction in manual tasks leads to faster transaction times. • Automated Supply Chains: The use of technologies such as blockchain and Internet of Things (IoT) facilitates real-time tracking and automated management of supply chains, reducing delays and increasing the predictability of cash flows. • Our capacity to create for the first-time end-to-end digital transactions would materially support trade finance by shortening funding cycles from weeks to 48hrs, while optimizing risk management/controls and extend funding solutions to SMEs, who have had a limited access to those tools so far. 2. Improved Cash Flow Management • Faster Payments: Digital platforms enable quicker invoicing, funding and payment processing. This results in shorter payment cycles and improved cash flow, as businesses can receive payments faster. Global goods trade in billions of current US$ Figure 1. World Bank Group. Trade Watch 2024 Quarter 2 3  • Dynamic Discounting and Supply Chain Finance: Digital systems can support dynamic discounting and various forms of supply chain finance, where suppliers get paid early at a discount, providing immediate liquidity. 3. Cost Reductions • Lower Operational Costs: By automating and streamlining operations, businesses can reduce costs related to administration, labour, and errors. These savings can then be reinvested into the business or improve overall liquidity. We have assessed potential savings at USD 39bn by 2030 across the European Union. • Optimised Inventory Management: Digital tools allow for better inventory tracking and management, reducing the need for excess stock and minimizing holding costs. 4. Improved Data Accuracy and Transparency Digitalisation enables businesses to offer • Real-Time Data and Analytics: Digital systems better services and provide real-time data, improving decision-making operate more efficiently, and allowing businesses to quickly respond to market giving them a clear competitive advantage changes. Accurate data reduces the risks of over or in the market. under-stocking and helps in planning financial require- ments more effectively. • Enhanced Transparency: With better tracking and visibility, businesses can more accurately predict delivery times and manage customer expectations, leading to more reliable cash flow projections. 5. Increased Access to Finance • Trade Finance Solutions: Digital trade platforms often integrate with financial institutions, providing businesses with easier access to trade finance options. This can include letters of credit, export financing, and other financial products that enhance liquidity. • Creditworthiness and Risk Assessment: Digital records improve transparency and can enhance a business's creditworthiness in the eyes of lenders, potentially lowering the cost of borrowing and increasing access to funds. 4  Quarterly averages of spot freight volumes based on the Shanghai Export Containerized Freight Index (SCFI) June 2022-May 2023 Others; 9% Europe; 12% June 2023-May 2024 Japan, Korea; 4% Europe; 8% Japan, Korea; North Others; 21% 2% America East South-East Coast; 23% Asia; 8% South-East Asia; 15% North America East Coast; 6% China; 21% North America West Coast; 15% North America China; 11% Middle East; Mediterranea West Coast; 6% 2% n Sea; 6% Middle East; 9% Mediterranean Figure 2 & 3. World Bank Group. Trade Watch 2024 Quarter 2 Sea; 22% 6. Regulatory Compliance and Risk Mitigation • Streamlined Compliance: Digital tools help businesses comply with regulations more efficiently, reducing the risk of costly fines and delays due to non-compliance. This ensures smoother operations and less disruption to cash flow. • Risk Management: Digitalisation enhances the ability to monitor and manage risks related to trade, such as fraud or supply chain disruptions. Effective risk management protects cash flow from unexpected financial hits. As an illustration, shared trade registers would allow to reduce double- funding risks and optimise data granularity for financers to better assess over-under invoicing risks (AML). 7. Enhanced Customer Satisfaction and Market Reach • Better Customer Experience: Efficient digital processes lead to faster delivery times and improved customer service, enhancing customer satisfaction and loyalty. Satisfied customers are more likely to pay on time, improving cash flow. • Global Market Access: Digital trade platforms open new markets and customer bases, increasing sales opportunities and revenue streams, which in turn supports better liquidity. 5 8. Processes related to the digitisation of the supply chain, based on a Buy-Ship-Pay reference data model Figure 4. UN/CEFACT International Supply Chain Process Model. 9. Next Steps The public and private sectors intend to join forces under the DigitalTrade4EU consortium to kick-start the process of digitisation of cross-border trade, trade finance and logistics in the European Union at legal and technical level, taking into account UNCITRAL Model Laws. We need your support at EU level launch the required initiatives and achieve the above, through interoperability between platforms (e.g. reliable systems) and between data exchange models (4-corner model, Verifiable Credentials data model, etc.). We want to achieve USD 39bn estimated savings to support the reindustrialisation of our region and boost jobs across SMEs. We are digitalizing If you are interested in this topic or would like to the supply chain to achieve seamless data exchange join our consortium, please contact us. between businesses. Competent authorities can carry out checks in background and reduce their interference to business 6 processes.  Mapping of United Nations recommendations with European Union legislation Process UNCITRAL European Union Trade, trade finance PSD3 Directive, etc. MLETR Communication eFTI regulation with implementing and Negotiable Cargo Electronic documents (logistics) delegated acts Documents Electronic signature MLES eIDAS 2.0 regulation Digital identity MLIT Control (competent authorities) - VAT in the Digital Age, ICS2, etc. IMPACT GLOBAL 27 EU Member States 10. Scope of the project to go live Figure 5. Vedler, R. The figure treats legislation as a subset of regulation. 7 11. Who should attend • Logistics and supply chain professionals • Legal experts and policymakers from public and private sector • IT and cybersecurity specialists • Academics and researchers in the field of digital trade • Representatives from trade and industry associations Figure 6. Working structure of the consortium. 12. Illustrative timeline and activities Figure 7. The expected duration of the project is 3 years. 8  Appendix 1. List of principles related to the UNCITRAL Model Law on Electronic Transferable Records (MLETR) • Functional Equivalence: Ensuring • Reliability and Security: Establis- that electronic transferable records hing criteria to ensure the integrity, have the same legal standing as their reliability, and security of electronic paper counterparts. transferable records. • Technology Neutrality: The law • Control and Transferability: Defi- does not favor or prescribe any ning mechanisms to ensure that specific technology, allowing electronic transferable records can flexibility and adaptation to different be uniquely identified, controlled, and techno-logical advancements. transferred. • Non-Discrimination: Electronic • Legal Certainty: Providing clear transferable records should not be legal framework to enhance predic- discriminated against solely because tability and reduce legal risks in the they are in electronic form. use of electronic transferable records. • International Harmonization: Pro- moting consistency and interopera- These principles help facilitate the legal bility in the legal treatment of electro- recognition and use of electronic trans- nic transferable records across differ- ferable records in international trade, lo- rent jurisdictions. gistics and commerce. Global MLETR tracker Figure 8. This tracker reflects information as known to ICC DSI, stakeholders are invited to share any additional information that maybe relevant to update it. Source: https://www.digitalizetrade.org/mletr 9 Appendix 2: Methodology used to calculate the benefits of electronic transferable records To calculate the gains from reform of electronic transferable records, in France and across the EU, the mission used the methodology applied in the impact assessment that accompanies a similar bill currently under discussion in the UK Parliament.1 Measuring the potential impact of adopting a legal framework compatible with the UNCITRAL Model Law in France IMPORTS EXPORTS France international trade by value 884,349 761,765 Share of international trade involving the use of trade 20 finance products (%) Value of international trade flows linked to paper 176,670 152,353 documents Share of paper transactions that may be covered by the 20 TTE bill (%) Value of paper transactions that may be covered by the 35,374 30,471 TTE bill Estimated cost to operators of processing each 5 documentary transaction (%) Cost of documentary transactions 1,769 1,524 Estimated reduction in cost (%) 50 Cost savings 884 762 Portion of savings recouped by France (%) 50 Value of cost savings recouped by France 442 381 Total cost savings for France 823 Amount in $m; 2022 figures. Assumptions Length of time after implementation of TTE bill First 5 years Last 5 years Rate of adoption over period (%) 30 70 Total estimated cost savings after ten years, excluding $4.15bn the cost of adopting TTE bill 1 DMA_self-certification_template_-_DCMS_Electronic_Trade_Documents_DMA__2022__accessible.pdf (publishing.service.gov.uk) 2 Measuring the potential impact of adopting a legal framework compatible with the UNCITRAL Model Law across the EU IMPORTS EXPORTS EU’s international trade by value 7,540,810 8,093,070 Share of international trade involving the use of trade 20 finance products (%) Value of international trade flows linked to paper 1,507,962 1,618,614 documents Share of paper transactions that may be covered by the 20 TTE bill (%) Value of paper transactions that may be covered by the 301,592 323,723 TTE bill Estimated cost to operators of processing each 5 documentary transaction (%) Cost of documentary transactions 15,080 16,186 Estimated reduction in cost (%) 50 Cost savings 7,540 8,093 Portion of savings recouped by EU (%) 50 Value of cost savings recouped by EU 3,770 4,047 Total cost savings for EU 7,817 Amounts in $m; 2022 figures. Assumptions Length of time after implementation of TTE bill First 5 years Last 5 years Rate of adoption over period (%) 30 70 Total estimated cost savings after ten years, excluding the cost of adopting Model Law $39.1bn How to read this table: The table uses the value of imports and exports2 to evaluate the potential impact of adopting a legal framework compatible with the Model Law, in terms of savings generated. A ratio of 20% is then applied to take account of the estimated share of international trade that involves the use of trade finance products. A 20% coefficient is applied once again, as in the UK impact assessment, which corresponds to the scope of transactions covered by the legislative reform. The cost of processing documentary transactions is estimated at 5%. As in the UK study, adoption of the Model Law is estimated to reduce costs by 50%. A ratio of 50% is applied once again, because each transaction also involves a foreign counterparty. Then, the gains obtained for import and export are tallied. The mission then applied the scenarios for adopting legal frameworks compatible with the Model Law that differed slightly from those used in the UK assessment, with an estimated average adoption rate of 30% in the first five years, then 70% over the next five years. 2 International trade - Trade in goods and services - OECD Data. 3 Related links • World Bank Group. Trade Watch 2024 Quarter 2 https://documents1.worldbank.org/curated/en/099706407032427640/pdf/IDU1ddcba0ab1c83 7148071a41f165d95ad90529.pdf • UNCITRAL Model Law on Electronic Transferable Records (2017) https://uncitral.un.org/en/texts/ecommerce/modellaw/electronic_transferable_records • UNCITRAL Model Law on the Use and Cross-border Recognition of Identity Management and Trust Services (2022) https://uncitral.un.org/en/mlit • UNCITRAL Model Law on Electronic Signatures (2001) https://uncitral.un.org/en/texts/ecommerce/modellaw/electronic_signatures • UNCITRAL Working Group VI: Negotiable Cargo Documents https://uncitral.un.org/en/working_groups/6/negotiablecargodocuments • Speeding up the Digitalization of Trade Finance https://www.economie.gouv.fr/files/files/2023/rapporttrade-EN.pdf • ICC France & Paris Europlace. Towards a European “Trade Services” Regulation working paper https://ramena.ee/documents/tsd-040923-2023.pdf • Deutsche Bank Corporate Bank. A Guide to Digital Trade Finance https://corporates.db.com/publications/White-papers-guides/a-guide-to-digital-trade-finance • UNECE/ECTD. White Paper Transfer of Model Law on Electronic Transferable Records - Compliant Titles https://unece.org/trade/documents/2023/09/white-paper-transfer-model-law-electronic- transferable-records-compliant • CASTL, EBRD. Trade and the UNCITRAL Model Law on Electronic Transferable Records https://www.ebrd.com/documents/legal-reform/blueprint-paper-on-digital-trade.pdf • UN/CEFACT. MMT RDM and Role in Transport Data Exchange https://unece.org/sites/default/files/2021-04/T%2BL3_MMT- RDM%20role%20in%20transport%20data%20exchange.pdf • European Commission. European Digital Identity https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/europe-fit-digital- age/european-digital-identity_en • European Commission. European Interoperability Framework https://ec.europa.eu/isa2/sites/default/files/eif_brochure_final.pdf • Union. Regulation (EU) 2020/1056 of the European Parliament and of the Council of 15 July 2020 on electronic freight transport information https://eur-lex.europa.eu/legal-content/en/ALL/?uri=CELEX%3A32020R1056 • Regulation (EU) 2024/903 of the European Parliament and of the Council of 13 March 2024 laying down measures for a high level of public sector interoperability across the Union (Interoperable Europe Act) https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX:32024R0903 4 Teema: Invitation to discuss the formation of a new DigitalTrade4EU consortium From: Riho Vedler <[email protected] <mailto:[email protected]> > Sent: Sunday, August 4, 2024 8:41 PM To: Sandra Särav - MKM <[email protected] <mailto:[email protected]> > Cc: Koaloo Family <[email protected] <mailto:[email protected]> >; HENRY Philippe <[email protected] <mailto:[email protected]> > Subject: Invitation to discuss the formation of a new DigitalTrade4EU consortium Tähelepanu! Tegemist on välisvõrgust saabunud kirjaga. Tundmatu saatja korral palume linke ja faile mitte avada. Dear Ms. Sandra Särav, I hope you find this message interesting. We are initiating the formation of a new consortium focused on enhancing trade, trade finance, and logistics across EU Member States. This consortium aims to streamline trade processes, improve financial mechanisms, and optimize logistics networks to foster economic growth and sustainability. We believe your organisation’s insights and participation would be invaluable. More details about the consortium can be found in the attached document. Please let us know your availability for a preliminary discussion. We are flexible with scheduling and can accommodate a time that suits you best. If you are not the appropriate contact, please feel free to share this invitation with the relevant person in your organisation. We look forward to your positive response and to the opportunity of working together. Keywords: liquidity of small and medium-sized enterprises, digitalisation of trade and logistics, eFTI Data Sets, negotiable cargo documents, bills of lading, promissory notes, bills of exchange, guarantees, interoperability, decentralization. Best regards, Riho Vedler Ramena OÜ www.ramena.ee <https://www.ramena.ee/> +37255515112 ~~~ This message may contain confidential and/or privileged information. If you are not the intended recipient or if you have received this message in error, please notify the sender and delete this message. Any unauthorized copying, disclosure or distribution of this message is strictly forbidden.