Maritime Trade Innovation Simon Ring Global Head of Financial - - PowerPoint PPT Presentation

Maritime Trade Innovation

Simon Ring

Global Head of Financial Markets Compliance Pole Star

Eric A. Sohn

Director of Business Product Dow Jones Risk & Compliance

The Importance of Maritime Trade

• 90% of world trade travels by sea

○ Estimated USD 12 trillion

• A smoothly running supply chain is needed to

ensure the flow of essential goods

○ Food ○ Fuel ○ Medical supplies ○ Raw materials ○ Agricultural products

• At any given time, 50,000 vessels and 1.2 million

seafarers are in operation.

• COVID-19 has led to global shipping & port activity

constricting

• IMO, ITF, UNCTAD, etc., have urged nations to

support the flow of sea trade

• The COVID-19 outbreak hasn’t erased existing

issues, it has merely brought on a new set of problems.

“The maritime industry is the key artery for sanctions evasion globally”

David Peyman

Deputy Assistant Secretary of State for Counter Threat Finance and Sanctions

Looking at the maritime supply chain as a whole:

• Ships (in particular ship types carrying specific cargoes under strategic sanctions programs)
• Flag registries
• Ship owners
• Ship operators
• Ship chartering & brokering
• Ship & maritime insurance players
• Ports & terminal operators
• Shipping service providers
• NVOCCs
• Bunkering

2020 U.S. Government Sanctions Priorities and Approach

AIS transponders Falsifying cargo and vessel documents Ship to Ship (STS) transfers Disabling vessel tracking systems - Automatic Identification System (AIS) Vessel name changes Physically altering vessel identification

Key Areas of Focus: Deceptive Shipping Practices

“No company is too big to fail or too safe.”

David Peyman

Deputy Assistant Secretary of State for Counter Threat Finance and Sanctions

*COSCO designation – considerable increase in global shipping costs

Paper-based nature of trade financing and maritime transportation industries leave corporates challenged by:

• Procedural inefficiencies
• Lack of transparency
• Increased risk of fraud
• Increased risk of human

error

• Lack of automation

On average, a cross-border trade finance transaction for a single commodities cargo travelling by sea requires the exchange of approximately 36 documents and 240 copies Cost of processing trade documents can be nearly 20%

• f those of shifting goods

With people now WFH due to COVID-19, the drawbacks of paper-based documentation are more pronounced than ever

Paper-Based Nature of Maritime Industry

The success of global trade lies in the ability for all those involved to leverage technology to ensure sanctions compliance and appropriate due-diligence while lowering the cost of trade financing. The elimination of paper from the processing of trade finance transactions has the potential to reduce output time by two hours per transaction. Combined with appropriate use of tech, this can cut compliance costs by >30% Technological advances such as blockchain promise to reduce collateral, operational and compliance costs, automate verification, and digitize paper based information management for financial intermediaries.

Trade Digitisation

Technology

It has never been more vital for businesses to keep at pace and comply with the fast-moving and increasingly complex sanctions and regulatory landscape

• Streamline, automate, and simplify complex compliance process
• Keep at pace with an ever changing regulatory landscape
• Be configurable to meet each clients risk parameters
• Unify compliance process across international branch networks
• Record the process in immutable format
• Incorporate the best in breed service providers & data
• Save the client time and money
• Protect the business, its staff, and its reputation

The importance of partnerships cannot be understated when tackling big industry issues.

• Pole Star’s PurpleTRAC entered into partnership with the Marco Polo Network

earlier this year to bring about a fully automated vessels sanctions screen solution its members.

• As one of the biggest, global trade finance network supported by blockchain

technology, the Marco Polo Network currently has more than 30 member banks on board, having tested by more than 70 corporations

• We are working on some exciting initiatives with MP to be launched officially in the

coming month, that will have a direct impact on improving maritime trade and supply chains whilst eliminating a lot of the prevalent industry pain points

Partnerships

“In these difficult times, the ability for shipping services and seafarers, to deliver vital goods, including medical supplies and foodstuffs, will be central to responding to and, eventually, overcoming this pandemic”

Kitack Lim

Secretary-General

Thank You