Australia and New Zealand banking group ANZ has completed an innovative four-cornered bank payment obligation (BPO) transaction for an iron ore shipment from Australia to China.
The transaction involved US multinational Cargill and mining group BHP Billiton as buyer and seller respectively, with ANZ as obligor bank. It marks the first use of BPO coupled with an electronic bill of lading and commercial invoices, where data flowed through all participants’ corners with zero data re-entry.
Document flow (including bills of lading) is normally separated from BPO transactions, requiring data re-entry and reconciliation. In this solution, title documents and related commercial invoices are electronically transmitted through the paperless trade solutions platform essDOCS.
By combining electronic bills of lading with the BPO transaction, ANZ and its clients were able to submit original data and supporting documents as trade data to be matched against the BPO payment terms on Swift trade services utility (TSU), and additionally to automate the release of original documents to the buyer upon data match.
Integration of this functionality with the SWIFT network allows seamless BPO execution by providing straight through processing (STP) of key data. It also reduces transaction risk and accelerates trade finance processes for all four corners of a BPO transaction.
“This ground-breaking solution reflects ANZ’s ambition to be a leading innovator in Asia-Pacific trade finance and bank of choice for companies active in the Australia-China trade corridor,” said Vivek Gupta, ANZ global head of trade and supply chain product.
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