• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.60
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• pp.109-139
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• 2013

This paper is to review the Uniform Rules for Bank Payment Obligations(URBPO 750E) which were developed by the Banking Commission of the International Chamber of Commerce and to present the implications. The rules were unanimously adopted during Lisbon meeting of the ICC Banking Commission on April 17th, 2013 and taken effect as of July 1, 2013. A BPO is an irrevocable undertaking given by an Obligor bank to a Recipient bank to pay a specified amount under the condition of a successful electronic matching of data or acceptance of mismatches. It is an alternative instrument for trade settlement, designed to complement existing solution and not to replace them(ICC,750E). The BPO enables banks to provide sellers and buyers with advanced risk mitigations and enhanced financing services. The BPO will improve trade processing efficiency such as increased transaction times, reduced handling cost, and others. It is believed that the BPO will have an important role to play in supporting the development of Supply Chain Finance in international Trade. So, This study will review the provisions and application of the URBPO 750E based on documentary materials including swift com and icc.org and so on.

• Korea Trade Review
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• v.42 no.2
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• pp.345-367
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• 2017

A bank payment obligation(BPO) has been introduced as a new alternative instrument for trade payments based on a technology and data-driven mechanisms aimed at facilitating an electronic trading in international trade transactions. The BPO is governed by URBPO which was in effect as of July 1, 2013. The URBPO only applies to inter-bank relationships because the BPO is bank-to-bank payment obligation, not a bank-to-customer obligation. The URBPO does not cover the interaction between a bank and their customer. For this reason, the standard bank-customer guidelines on BPO agreements were required to prepare the agreements between the banks and their customers. Accordingly, the International Chamber of Commerce established "ICC Guidelines for the creation of BPO Customer Agreements" for the settlement and development of the BPO by supporting banks in creating contracts or agreements with their customers. So, This study is to review its establishment purpose and to present the implications by analyzing the ICC guidelines. This study was based on documentary research focusing mainly on the ICC Guidelines and the appendix.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.60
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• pp.141-175
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• 2013

The purpose of this study aims to the implications by the introduction of TSU/BPO system as a instrument of trade settlement. Jointly with financial messaging provider SWIFT, the ICC Banking Commission has developed the URBPO to take into account the legitimate expectations of all relevant sectors. Once the goods have been shipped, the seller's bank uploads the shipping and logistics data to the TSU to be checked against the baseline. URBPO is the first ever set of standards in supply chain finance that governs BPO transactions worldwide. BPO enables banks to reduce the risks associated with international trade to the benefit of both buyers and sellers. A BPO is an irrevocable undertaking given by an Obliger Bank to a Recipient Bank to pay a specified amount under the condition of a successful electronic matching of data or acceptance of mismatches. The BPO should be viewed as an exercise in collaboration between trading partners and their banks. Drawings upon global standards and incorporating the benefits offered by letters of credit, the new instrument has the potential to benefit all parties in a trade transaction-and bring trade settlement into the 21st century.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.73
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• pp.21-42
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• 2017

A BPO is an irrevocable undertaking given by an Obligor Bank acting on behalf of the buyer to a Recipient Bank acting on behalf of the seller to pay on satisfaction of certain specified conditions. There have been a Trade Service Utility(TSU), a Transaction Matching Application(TMA) and ISO 20022 TSMT messages that core electronic technical systems linked to the BPO. As a key usefulness of the BPO, it brings to market an alternative means of satisfying the risk mitigation, financing and information management needs of banks and businesses engaged in trade. That is, corporates can spread the risk among multiple Obligor Banks by requesting multiple BPOs for the same trade transaction not to exceed the value of the initial transaction. Since the BPO replaces the manual document checking process with the electronic matching of data, buyers and sellers will benefit from significantly increased accuracy and objectivity. By using BPO, buyers and sellers can become trusted counterparties by demonstrating reliability and giving sellers the assurance of being paid on time as per the payment terms and conditions agreed. When compared to L/C, the BPO requires submission of data only. This requires a change of practice of those accustomed to dealing with physical documentation. The beneficiary of a BPO is the Recipient Bank which is always the Seller's Bank. In the meantime, banks will need to agree between themselves that the URBPO 750 will be applied, modified or excluded. However, customers of banks will face low transactional costs due to a fully automated process and standardized data formats used in international trade documentation. There is no amendment and cancellation rules in the URBPO 750s, but only have Assignment of Proceeds rules. As a result, the BPO is likely to enable new business opportunities, lower costs, fast transaction process and strengthen key customer relationships.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.65
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• pp.117-139
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• 2015

The BPO is an irrevocable undertaking given by an obligor bank to a recipient bank to pay a specified amount under the condition of a successful electronic matching of data or acceptance of mismatches. The BPO enables the participating banks to provide sellers and buyers with enhanced financing services. Therefore, BPO gives banks the tools to provide them with guarantees and other multi-banking services. All the participating banks must use the same Transaction Matching Application(TMA) for BPO business. In order to exchange BPO-related data, banks must be subscribed to the same TMA scheme. Participation in the TMA scheme is limited to banks only. The TMA is matching and workflow application as instrument to determine whether to pay the BPO or not. Therefore, TMA will have an important role to play in the business of the BPO. So, This paper is to review the mechanism of a TMA and the major business scenarios in Banking Payment Obligation Transactions. In Particular, it has been included the exchange and matching of data messages, the disposal of discrepancies, document payment and others based on URBPO. This study will be based on documentary research including swift com and icc.org and so on.

• International Commerce and Information Review
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• v.17 no.2
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• pp.3-18
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• 2015

This thesis examines the performance and improvement strategy of SWIFTNet TSU's BPO for computerization and suggests the following results: First, the URBPO should be legally complemented, and the SWIFT and banks need to keep improving the systems to meet trade parties' diverse needs. Second, the SWIFTNet TSU's BPO should have an institutionally unified sharing platform with security, stability and convenience. In other words, it is needed to develop services which meet e-payment paradigm and international and regional environments through continued analysis on market changes and flow. Third, in order for the SWIFTNet TSU BPO to evolve into a perfect global system, there should be an innovative payment solution which can meet all trade parties all over the world. For this, technology standardization for a worldwide e-trade payment system is essential. Lastly, based on the results derived from this study, an analysis framework with which more diverse and practical environmental variables can be analyzed should be developed.

• Korea Trade Review
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• v.42 no.5
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• pp.213-232
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• 2017

A Bank Payment Obligation is now in operation as payment instruments in the business of Supply Chain Finance since 2013. The BPO is an irrevocable undertaking of the Obligor Bank subject to the successful electronic matching of all required Data Sets with the established Baseline in the TMA. Although the BPO should be regarded as similar to a Letter of Credit, it is a new payment solution based on a technology and data-driven mechanisms. The BPO is different from the letter of credit in their structure such as a bank to bank obligation, an automated matching engine, a transfer and confirmation of the Credit, etc. The BPO can also be used more effectively on a stand-alone solution as an electronic alternative to the traditional instruments. it will provide a new range of solutions to meet the ever-changing needs of the trade customers. However, the BPO could be raised several issues including an assurance of payment between recipient banks and sellers because the BPO is a bank-to-bank obligation. The URBPO do not applies to the relationships between banks and their business clients. So, the primary objective of this paper is to promote the institutional understanding and present the implications by reviewing the majn issues in the BPO as comparision with the Letter of Credit from the institutional point of view. This research was also based on documentary research focusing on the preceding research and the materials of ICC and SWIFT.

• Korea Trade Review
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• v.43 no.4
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• pp.1-25
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• 2018

Bank payment obligations (BPO) have been used since 2013 as a payment solution in the business of supply chain finance. The BPO is an irrevocable undertaking of the obligor bank subject to the successful electronic matching of all required data sets with the established baseline in the TMA. Although the BPO should be regarded as similar to a letter of credit, it is a new payment solution based on advanced technology and data-driven mechanisms. The BPO differs from the credit in institutional terms such as bank-to-bank obligations, automated matching engines, and transfer and confirmation, etc. The BPO can also be used effectively as a stand-alone electronic solution to traditional instruments. it provides a new range of solutions to meet the ever-changing needs of trade customers. However, Operation of the BPO can leads to several issues including an assurance of payment between recipient banks and sellers because the BPO is a bank-to-bank obligation. The URBPO does not apply to relationships between banks and their business clients. So, the primary objective of this paper is to promote institutional understanding and present implications by reviewing major issues concerning the BPO as compared with the letter of credit from the institutional point of view. This research was based on documentary research focusing on the preceding research and the materials of ICC and SWIFT.

• Korea Trade Review
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• v.46 no.2
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• pp.93-106
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• 2021

This study analyzes trade communication methods by comparing and analyzing payment methods and procedures of L/C and BPO transactions. As a result of the study, BPO transaction is validated based on the combination results of the confirmed baseline and data set unlike the L/C transaction. Therefore, BPO is superior to L/C transaction in that there is no confrontation between the parties over the matching results. And it can proceed with certain transaction that is paid first and proved later. In addition, the process of accepting data mismatches results in a confirmation of the payment commitment considering the intention of the importer. This allows flexible disposition of documents in response to the post payment situation as long as the documents are held by the exporter, which can be said to be superior to the L/C transaction.

• International Commerce and Information Review
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• v.18 no.3
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• pp.3-21
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• 2016

The thesis examines genealogical study of various aspects to overcome lots of problems which come by when we execute SWIFTNet TSU BPO. Practical implications regarding the innovation of electronic trade infrastructure are as follows. First, the shipping documents in the SWIFTNet TSU BPO are directly sent to an importer by an exporter after the baseline is confirmed. With this process itself, therefore, the bank cannot secure the account receivable. When initiating the SWIFTNet TSU BPO deal, it is needed to set regulations on the bank's account receivable security in the contract. Second, the SWIFTNet TSU BPO should also have an institutionally unified sharing platform with security, stability and convenience. It other words, it is needed to develop services which meet e-payment paradigm and international environments through continued analysis on market changes and flow. Third, the SWIFTNet TSU is useful in terms of promptness, reduction of risk in foreign exchange payment, cost reduction. Therefore, the SWIFT should be perfectly united and linked among the banks, importer and exporter to make the SWIFTNet TSU more convenient in countries around the world. Fourth, the SWIFT should be approached from the aspect of expansion of network and creation of a new business model through analysis on these problems with a worldwide perspective. At the same time, it is necessary to build a cooperative system to share information and promote comprehensive management for efficient operation.