TAKING THE LEAD ON MLETR COMPLIANT USE CASES AND TECHNOLOGIES, July 2024

Contributed by André Casterman, Board Member and Chair Fintech Committee, ITFA

On July 10th, members of the DNI Initiative got on the ITFA stage to share their experience around use of MLETR-compliant laws and technologies.

Experts on MLETR technologies and use cases shared critical capabilities such as the option to digitise all supporting trade documents next to negotiable instruments, and package those into a digital envelope. They also shared key features applicable to bills of lading such as the change from digital to paper which is a requirement for technologies to be approved by the International Group of P&I clubs.

Following two technology deep dives, some bank and non-bank lenders shared their transaction testimonials with our 60+ audience, focusing on open account and documentary collections.

Key take-aways from panels and presentations can be summarised as follows:

1. MLETR standardises Irrevocable Payment Undertaking (IPUs) with ePN and eB/E which are established instruments getting a 21st century digital upgrade;

2. Adoption of MLETR is mainly led by non-bank lenders such as Mercore and Trade Finance Global (TFG);

3. Early adopter banks such as Lloyds Bank Corporate & Institutional will scale use of digital negotiable instruments at cross-border level through the 4-corner model re-using correspondent banking relationships;

4. Technology companies active on MLETR will fail commercially if relying solely on bank adoption; they should rather engage with non-bank lenders and deliver more corporate-centric proof-points in the short term;

5. Non-bank originators include b2b e-commerce, e-invoicing and logistics platforms such as Tech Cargo, LLC. and CargoX who were present and very engaged during yesterday’s seminar;

6. Technology is ready to support many use cases and achieve various levels of interoperability. There is no reason to wait for more technologies to be delivered to the market;

7. Development banks have a key role to play as done traditionally;

8. In case the ETD Act is not applicable, ITFA’s electronic payment undertaking (ePU) developed with Geoffrey Wynne, Partner, Sullivan & Worcester LLP help deliver DNIs on the basis of contractual relationships under English law;

9. Multi-banking platforms e.g., Vayana TradeXchange & Mitigram embedding MLETR technologies deliver more value to corporates and financiers;

The seminar delivered a very productive afternoon thanks to alternative lenders, banks, law firms and technology vendors aiming to grow their value proposition on the back of the ETDA, or the new French law and interoperable DNI technologies.

I wish to thank the following practitioners who joined our stage:

– Anthony Wadsworth-Hill, Co-founder, DCEO & COO, Mercore

– Alex Waites, Director, Enigio

– Saloi Benbaha, Head of Enterprise Alliances & Ventures, XinFin Powering XDC Network & TradeFinex

– Amanda Evans, Chief Growth Officer, Enigio

– Jon Boran, Director, Lloyds Bank Corporate & Institutional

– Vikrant Yadav, CredAble and member of ITFA EL Cttee

– Charlie O’Mulloy, EBRD Trade Facilitation Programme and member of ITFA EL Cttee

– Dr Maria Mogilnaya, Advisor, Trade Finance, CargoX

– André Casterman, Founder, Casterman Advisory

– Mark Abrams, MD, Global Head of Trade & Receivables Finance, TFG.

Next stop: ITFA conference in Cyprus. See you there. Have a great summer.