Asian Development Bank unveils tool to enable access to trade finance

Tuesday 4 September 2018 14:00 CET | News

Asian Development Bank has launched its first Trade Finance Scorecard, a tool aimed to address market gaps.

The Asian Development Bank said the Trade Finance Scorecard focuses on issues related to the interpretation, implementation, and compliance with regulations designed to curb money laundering and the financing of terrorism in the context of correspondent banking and trade financing.

Asian Development Bank representatives also declared that the scores are assigned on two levels. Firstly, at a macro level, to identify characteristics of effective regulation that could be strengthened. Secondly, at a micro transactional level, to highlight specific challenges that can be addressed in the shorter term. Elements of effective regulation outlined in the first level are scored out of 10 on seven criteria: consistency (4), risk alignment (3), design (2), stakeholder communication (5), technology and data (5), enforcement (4), and quality control (3). These criteria are used to assess five working-level issues in the second level.

The scorecard is based on feedback from industry regulators and will complement existing tools such as the Financial Action Task Forces recommendations against money laundering and terrorist financing. In 2017, the Asian Development Banks Trade Finance Program supported USD 4.5 billion in trade through 3,505 transactions.

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Keywords: Asian Development Bank, trade finance, Trade Finance Scorecard, market gap, money laundering, financial terrorism, stakeholder communication, Financial Action Task Force, transaction
Countries: World

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