BLOCK-CHAIN A Nirvana for Trade Risk & Finance Presented by: - - PowerPoint PPT Presentation

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BLOCK-CHAIN A Nirvana for Trade Risk & Finance Presented by: - - PowerPoint PPT Presentation

BLOCK-CHAIN A Nirvana for Trade Risk & Finance Presented by: By: H.C.Barke President & C.E.O. CPCU(USA SA), ARe(USA), AMIM(USA), AIC(USA), MWWHIS(U S(USA SA), ACII(Lo Lond ndon on), AIRM(Lo Lond ndon) n), Chartere ered


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22 Nov 2017

10th Global Supply Chain and Logistics Summit www.sclgsummit.org

BLOCK-CHAIN A Nirvana for Trade Risk & Finance

Presented by:

By: H.C.Barke President & C.E.O.

CPCU(USA SA), ARe(USA), AMIM(USA), AIC(USA), MWWHIS(U S(USA SA), ACII(Lo Lond ndon

  • n), AIRM(Lo

Lond ndon) n), Chartere ered Insurer( rer(Lo Lond ndon) n), FIII, AIII(Gene neral ral), AIII(Mari rine) e), B.Com(Fina inanc nce), MBA(Mark rketi eting) g), LLB, Member r of Society of Technic nicia ians ns in Insura ranc nce e (London

  • n), MCPCUS(USA),
  • Dipl. King’s College

ge, Cambridge e (London

  • n), Dipl.
  • l. Da Vinci’s Vitruv

uvian ian Man (London) n), Dipl. Pi (London

  • n)

Certifica icate e of Distinc inction n (Insura uranc nce & Risk Managem ement nt) IBC, Cambridge ge (London) n) Certifica icate e ‘2000 Outstand anding ing Intelle ellectu ctuals als of 21st

st Century’, IBC Cambrid

idge e (London

  • n)

Certifica icate e ‘Intern ernat ation ional al Who’s Who Historic

  • ric Society’, USA

Prudence Insurance Brokers LLC – UAE, USA, UK

barke@prudence-ae.com; +97150 7700509

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22 Nov 2017

10th Global Supply Chain and Logistics Summit www.sclgsummit.org

9 Feb 2011

World Merchandise Exports USD 11.2 Trillion

poised to touch $ 19 Trillion by 2020

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22 Nov 2017

10th Global Supply Chain and Logistics Summit www.sclgsummit.org

9 Feb 2011 TRADITIONAL PAPER-BASED TRADE CREATE INEFFICIENCIES With export and import trade shipments requiring an average of: 36 original documents, 240 copies and the involvement of 27 entities, Fortune 500 companies incur more than $81 billion of unnecessary supply chain and working capital costs each year due to inefficiencies and lack of visibility.

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22 Nov 2017

10th Global Supply Chain and Logistics Summit www.sclgsummit.org

9 Feb 2011

Where things went wrong

  • 1. Quingdao Metals Fraud – multiple financing of same inventory
  • 2. Shell Companies
  • 3. Circular Trade
  • 4. Bogus Trade Documents
  • 5. Multiple financing of invoices
  • 6. Inventory fraud
  • 7. Sanctions exposure
  • 8. Disputed Debts

4

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22 Nov 2017

10th Global Supply Chain and Logistics Summit www.sclgsummit.org

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DECHENG GROUP

  • 1. QUINGDAO METALS FRAUD

Multiple financing of same inventory Standard Chartered Plc, lost almost $200 million from a fraud at China’s Qingdao port.

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22 Nov 2017

10th Global Supply Chain and Logistics Summit www.sclgsummit.org

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  • 2. SHELL COMPANIES as DEBTORS

A large + 5 billion TO mobile phones trader in Dubai – similar modus operandi involving +20 related and Indirectly held and controlled companies …………. +AED 2 Billion

A large +$ 500 mn. TO Commodity Trader in DMCC – shell company in Africa and involved with Shri Lal Mahal Basmati Rice – Little Rose General Trading ….+$5 mn. fraud

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22 Nov 2017

10th Global Supply Chain and Logistics Summit www.sclgsummit.org

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  • 3. CIRCULAR TRADE FRAUD

GLINTS GLOBAL, DUBAI Modus Operandi

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22 Nov 2017

10th Global Supply Chain and Logistics Summit www.sclgsummit.org

9 Feb 2011

Trade Finance Risks

Transaction Finance Inventory Finance

1. Counter-party – Buyer & Seller 2. Goods 3. Purchase Order & Confirmation 4. Contract of Sale – Sharing ‘SMART CONTRACT’ to BANK 5. Goods Inspection – Quality & Quantity Certification – On ‘SMART CONTRACT’ by Independent Agencies

  • 6. Commercial Invoice Issuance by Seller

7. Transport documents & effective Title of Goods 8. Transport Tracking 9. Delivery & Delivery Confirmation – ‘DIGITAL ACKNOWLEDGEMENT’

  • 10. Commercial Invoice Acceptance by Buyer
  • 11. Payment – Automated payment via ‘SMART CONTRACT’

1. Physical presence of goods/inventory 2. Title of goods 3. Quantity & Quality of goods

+/

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22 Nov 2017

10th Global Supply Chain and Logistics Summit www.sclgsummit.org

9 Feb 2011 9 BANK

SCF PLATFORM – A ROBUST SOLUTION

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22 Nov 2017

10th Global Supply Chain and Logistics Summit www.sclgsummit.org

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22 Nov 2017

10th Global Supply Chain and Logistics Summit www.sclgsummit.org

DISTRIBUTED LEDGER TECHNOLOGY (DLT) Key advantages

 DLT make trade transactions – immutable (unchangeble), incorruptible and irreversible.  Trade payments could be made swiftly on a single, robust, tamper-proof ledger shared among participants – companies (buyer & seller), shipping company, 3PL , banks etc.  Full transaction details with supporting enriched data could be immutably linked to a transaction to allow easier, more accurate auditing of supporting documentation for a payment.  Immensely support Supply Chain Finance & Trade Receivables Finance to optimize Working Capital efficiency thru :

  • 1. Dynamic Discounting ;
  • 2. Reverse Factoring ;
  • 3. Factoring ; &
  • 4. Securitization.
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22 Nov 2017

10th Global Supply Chain and Logistics Summit www.sclgsummit.org

Thank you