The ICC Guide to the Uniform Rules for Bank Payment Obligations

No. @751E

ISBN : 978-92-842-0200-3

The ICC Guide to the Uniform Rules for Bank Payment Obligations examines the ways in which the three critical components - standards, platform and rules - must interact and complement one another to facilitate the successful completion of a BPO transaction. Download BPOs enable banks to mitigate the risks associated with international trade to the benefit of both buyers and sellers. They enable flexible financing propositions across the entire transaction lifecycle, including pre-shipment, post-shipment and buyer finance.

This invaluable handbook explains workflow in detail and guides practitioners in their interpretation of the Uniform Rules for Bank Payment Obligations. The Guide to URBPO provides real life business scenarios and practical examples of how a Bank Payment Obligation may be applied in practice to support a variety of customer value propositions. It will help corporates to take full advantage of a host of bank-assisted open account solutions designed to optimise the management of the cash conversion cycle and of working capital.

This Guide is a vital reference for anyone involved in financial supply chain transactions and for students of international commerce.

Code ISBN : 978-92-842-0200-3
Number of pages : 187
Publishing date : 2013
Language : English
Format in cm : 14.2*23.4

LIST OF FIGURES

LIST OF TABLES

LIST OF FLOW DIAGRAMS

Chapter 1: What is a Bank Payment Obligation?

1.1. What is a Baseline?        

1.2. Why do we need a BPO?

1.3. Addressing inefficiencies in the financial supply chain         

1.4. Optimisation of working capital

1.5. Payment assurance

1.6. Enhanced process efficiency

1.7. Reduced risk of discrepancies

1.8. Mitigating the risk of supplier default

1.9. Strengthening buyer/supplier relationships

1.10.               Growing the supplier network

1.11.               Integrated technology based on global messaging standards

1.12.               Flexible forms of financing

1.13.               “Silent” BPOs

1.14.               Summary of the main financing opportunities using the BPO

1.14.1.                   Basic financing options

1.14.2.                   Adapting the due date of the BPO

1.14.3.                   Delaying the establishment of the BPO

1.14.4.                   Using the TMA “pre-match” facility to create the BPO later

1.15.               Accounting Policy for BPOs

1.16.               Capital Treatment for BPOs

1.16.1.                   Probability of Default

1.16.2.                   Loss Given Default

1.16.3.                   Effective Maturity

1.16.4.                   Leverage

Chapter 2: The ISO 20022 TSMT messages

2.1. What is ISO?

2.2. What is ISO 20022?

2.3. What is ISO 20022 TSMT?

2.4. The ISO 20022 TSMT messages

Chapter 3: The Transaction Matching Application

3.1. TMA Subscription

3.2. TMA Roles

3.3. TMA Transaction States

3.4. TMA Data Sets

3.5. TMA Minimum fields

3.5.1.   Baseline

3.5.2.   Commercial Data Set

3.5.3.   Transport Data Set

3.5.4.   Insurance Data Set

3.5.5.   Certificate Data Set

3.5.6.   Other (Certificate) Data Set

3.6. TMA Establishment of a BPO

3.7. TMA Data and Message Matching Rules

3.8. TMA Pre-Match

3.9. TMA Baseline Amendments

3.10.               TMA Mismatch Acceptance and Rejection

3.11.               TMA Single shipments and partial shipments

3.12.               TMA Multiple Obligor Banks

3.13.               TMA Special Messages

3.14.               TMA Reporting

3.15.               TMA Data Storage

3.16.               TMA Timers and Time Violations

Chapter 4: The Uniform Rules for Bank Payment Obligations

4.1. Key points

4.2. Key differences between the URBPO and the UCP/eUCP

4.2.1.   Article 1

4.2.2.   Article 2

4.2.3.   Article 3

4.2.4.   Article 4

4.2.5.   Article 5

4.2.6.   Article 6

4.2.7.   Article 7

4.2.8.   Article 8

4.2.9.   Article 9

4.2.10.                   Article 10

4.2.11.                   Article 11

4.2.12.                   Article 12

4.2.13.                   Article 13

4.2.14.                   Article 14

4.2.15.                   Article 15

4.2.16.                   Article 16

Chapter 5: Understanding Workflow

5.1. Establishing a Baseline

5.1.1.   Establishing a Baseline between two primary banks only

5.1.2.   Establishing a Baseline with additional banks

5.1.3.   Role and Baseline Acceptance

5.1.4.   Role and Baseline Rejection

5.2. Baseline Amendment Request

5.2.1.   Baseline Amendment Acceptance between two primary banks only

5.2.2.   Baseline Amendment Acceptance involving additional banks

5.2.3.   Baseline Amendment Rejection between two primary banks only

5.2.4.   Baseline Amendment Rejection involving additional banks

5.3. Data Set Submission

5.3.1.   Baseline involving two primary banks only

5.3.2.   Baseline involving additional banks

5.4. Data Set Pre-Match

5.5. Mismatch Acceptance

5.5.1.   Baseline involving two primary banks only; Buyer’s Bank is Obligor Bank

5.5.2.   Baseline involving additional banks

5.6. Mismatch Rejection

5.6.1.   Baseline involving two primary banks only; Buyer’s Bank is Obligor Bank

5.6.2.   Baseline involving additional banks

5.7. Special Messages

Chapter 6: Corporate-to-Bank Guidelines and Messaging

6.1. Adapting the ISO 20022 TSMT messages

6.2. Differences in scope

6.3. End-to-end message flows

Chapter 7: Corporate Agreements

7.1. Interactions outside the scope of the URBPO

7.2. Agreement between a buyer and a seller

7.2.1.   The ICC Approach

7.2.2.   Specific and General Conditions

7.2.3.   Extract from the ICC Model International Sale Contract

7.3. Agreement between a corporate customer and a financial institution

Chapter 8: BPO Business Scenarios

8.1. Bank-assisted Open Account

8.2. Open Account Processing/Servicing

8.2.1.   Purchase Order Advice

8.2.2.   Document Presentment and Data Matching

8.2.3.   Discrepancy Handling/Dispute Resolution

8.2.4.   Management of Approved Invoices/Drafts

8.2.5.   Document Payment

8.2.6.   Documents/Payment Reconciliation

8.3. Open Account Finance

8.3.1.   Purchase Order Commitment to Pay

8.3.2.   Pre-Shipment Finance

8.3.3.   Warehouse Finance

8.3.4.   Post-Shipment Finance

8.3.5.   Approved Payables Finance

8.3.6.   Receivables Purchase

8.3.7.   Flexible Due Date

8.4. BPO Case Studies

8.4.1.   BP Chemicals (Exporter)

8.4.2.   Standard Chartered Bank

8.4.3.   Ito-Yokado (Importer)

8.4.4.   Bank of Tokyo-Mitsubishi UFJ (BTMU)

Chapter 9: Useful Links

9.1. Uniform Rules for Bank Payment Obligations

9.2. Messaging Standards

9.3. Transaction Matching Application Service

9.4. Industry Organisations

9.5. Software service providers and technology platforms

9.6. Business consultancy and business intelligence

9.7. Banks

9.8. Education and Media

David Hennah is an Associate of the Institute of Financial Services, formerly the Chartered Institute of Bankers. He has considerable expertise, accumulated over many years, in transaction banking, software services, financial services marketing and business consultancy and has a track record of driving change through the innovative use of new technology to deliver business benefit.

He has previously lived in France, Belgium and Germany, as well as in the UK, and has worked for Barclays Bank, ICL/Fujitsu Services, Misys Banking Systems and SWIFT. At SWIFT, David held a key role in bringing the Bank Payment Obligation to market and was a member of the ICC Drafting Group that worked on version 1.0 of the Uniform Rules for Bank Payment Obligations (URBPO). He is a well-known chairperson, speaker and moderator at trade and industry events worldwide. He is also the author of numerous articles, often related to product innovation and the use of technology in international payments and cash management, trade and supply chain finance. He is a regular contributor to Trade and Forfaiting Review.

David is Managing Director of Hennah FSC Advisory (http://hennahfscadvisory.co.uk), whose clients include the International Chamber of Commerce, Demica and Wilmington Publishing & Information Limited, while also working in close collaboration with Trade Finance Associates (www.www.tradefinanceassociates.com) and advising International Financial Bridge. David may be contacted directly at david@hennahfscadvisory.co.uk or alternatively at davidhennah@hotmail.co.uk.

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