In recent years, banks have been closely watching to see if regulators in the EU, UK, and US would impose higher capital requirements on trade finance products like standby letters of credit and guarantees.

In a significant win for trade finance providers, the Bank of England has recently abandoned its proposal to raise capital requirements for key trade instruments. The decision came after the Bank received compelling data indicating that the original plans were overly conservative.

On the latest episode of the GTR News Brief, senior reporter Jacob Atkins discusses why the central bank took this decision and the implications for the trade finance sector.

Since late last year, Houthi rebels in Yemen have been escalating their attacks on commercial shipping routes in the Red Sea, firing Iranian designed anti-ship missiles and launching drone strikes on vessels carrying goods between Europe and Asia.

The number of container ships in the region plummeted in December, as shipping companies opted to use the much longer – and more expensive route – around the Cape of Good Hope.

Initially, and despite the growing risks, oil and gas tankers continued to use the Red Sea corridor.

But in recent weeks, this has all changed, with the number of vessels carrying crude or petroleum products having dropped to almost zero in the region, in the wake of ongoing Houthi assaults.

In today’s episode, GTR senior reporter, John Basquill, provides an update on the Red Sea crisis and explains the potential ramifications, both direct and indirect, for the commodities trading sector.

Host Felix Thompson is joined by senior reporters John Basquill and Eleanor Wragg, as well as reporters Jacob Atkins and Jenny Messenger, to discuss some of the most-read articles on the GTR news site this year.

Insurance-related court disputes, the impact of Basel requirements on the trade finance industry, efforts to ban fossil fuel support within the OECD Arrangement on Officially Supported Export Credits and the demise of yet another digital trade consortia, all feature in our 2023 review.

Host Felix Thompson is joined by reporter Jacob Atkins to discuss a recent Singapore court case involving JP Morgan and a coal trader, Kuvera Resources.

Last year JP Morgan successfully fended off a lawsuit brought by Singapore’s Kuvera Resources, with a judge finding that the lender was entitled to decline payment for a US$2.4mn shipment of coal because the vessel involved may have been Syrian-owned and subject to far-reaching US sanctions on the country.

But Singapore’s Court of Appeal on September 28 decided in Kuvera’s favour, ruling that JP Morgan did not prove to an acceptable standard of proof that the vessel was in fact under Syrian ownership at the time of the trade.

Instead, the court found the bank’s decision to reject payment was based on its own risk management calculations due to the presence of “red flags” that suggested a connection with Syrian entities.

In this episode, we delve into the reasons behind the judges’ decision, and why the proceedings have been described as a “test case” for the use of sanctions clauses in letter of credit transactions. All the facts of the case described by Jacob in this episode are taken from the written judgement.

Music credit to Kevin MacLeod for his track Loopster, taken from incompetech.com. Licensed under creative commons by attribution 3.0 license. Further music credit to Sunrise Drive by South London HiFi. Licensed under creative commons Attribution 4.0 License. Music promoted by CopyrightFree.org

Host Felix Thompson is joined by senior reporters Eleanor Wragg and John Basquill, and reporter Jacob Atkins, to discuss some of the most-read articles on the GTR news site this year.

The demise of supply chain finance giant Greensill has been one of the major stories over the past 12 months. In this episode, we consider the events that triggered this collapse and the lender’s use of so-called “future receivables”.

Elsewhere, we assess the fallout from a string of fraud scandals in the commodity finance sector in 2020, and why banks remain risk averse to financing the smaller traders in the market.

The editorial team also provides an update on the industry’s trade digitalisation efforts, including the growing momentum behind UNCITRAL’s Model Law on Electronic Transferable Records (MLETR).

Meanwhile, Jacob also gives a brief overview of the supply chain crisis of 2021, and why it’s likely to last well into next year.

Music credit to Kevin MacLeod for his track Loopster, taken from incompetech.com. Licensed under creative commons by attribution 3.0 license. Further music credit to Sunrise Drive by South London HiFi. Licensed under creative commons Attribution 4.0 License. Music promoted by CopyrightFree.org

Host Felix Thompson gives a breakdown of the major stories in trade and trade finance news this week.

The US government has signalled that banks face extra scrutiny over supply chains that include forced labour in the Chinese province of Xinjiang.

Australia’s banks have defended their decision to exit the thermal coal sector, pushing back against suggestions from government lawmakers that they be forced to extend financing to fossil fuels.

The US government’s decision to lift sanctions on liquefied petroleum gas exports to Venezuela should be seen as a “humanitarian gesture” rather than a wholesale shift in trade relations, experts suggest.

Senior reporter Eleanor Wragg also provides a closer analysis on why trade innovation risks being stranded on digital islands.

Music credit to Kevin MacLeod for his track Loopster, taken from incompetech.com. Licensed under creative commons by attribution 3.0 license. Further music credit to Sunrise Drive by South London HiFi. Licensed under creative commons Attribution 4.0 License. Music promoted by CopyrightFree.org

Host Felix Thompson gives a breakdown of the major stories in trade and trade finance news this week.

The UK’s Serious Fraud Office has an­n­ounced it is investigating potential fraudulent trading and money laundering at GFG Alliance.

Environmental groups are urging the European Commission to exclude LNG and biofuels as sustainable alternatives for vessels in an upcoming maritime fuel law in the European Green Deal.

In other news, the Law Commission of England and Wales has announced a consultation on a proposed legislative reform which would give legal recognition to electronic versions of trade documents

Meanwhile, a move by India, Japan and Australia last month to collectively boost supply chain resilience could eventually squeeze China out of the trios’ supply chains for sectors such as semiconductors, batteries and rare earths, experts say.

Senior reporter Eleanor Wragg also provides a closer analysis of a new commitment made by G7 digital and technology ministers to adopt electronic transferable records in international trade transactions.

Music credit to Kevin MacLeod for his track Loopster, taken from incompetech.com. Licensed under creative commons by attribution 3.0 license. Further music credit to Sunrise Drive by South London HiFi. Licensed under creative commons Attribution 4.0 License. Music promoted by CopyrightFree.org

Host Felix Thompson gives a breakdown of the major stories in trade and trade finance news this week.

Legal challenges against Greensill are centring on its controversial future receivables financing product.

French energy major Total has been forced to suspend operations at its liquified natural gas project in northern Mozambique for the second time this year, after a fresh attack by insurgents.

In other news, Standard Chartered is launching a set of sustainable trade finance solutions across Asia, Africa and the Middle East, Europe and the Americas.

We also take a closer look at R3's decision to launch an electronic bill of lading solution.

Music credit to Kevin MacLeod for his track Loopster, taken from incompetech.com. Licensed under creative commons by attribution 3.0 license. Further music credit to Sunrise Drive by South London HiFi. Licensed under creative commons Attribution 4.0 License. Music promoted by CopyrightFree.org