Global law firm Norton Rose Fulbright has advised AIG and Standard Chartered in relation to establishing the first blockchain-enabled platform for the streamlined purchasing of trade finance invoices from a global logistics company.
TradeIX and AIG partnered to enable trade finance transactions for companies, using the blockchain-enabled platform provided by TradeIX.
The invoice finance transaction went live at the end of September and enabled the logistics company to help its customers extend their payment period whilst maintaining the company’s receivables at current terms. The financing was offered by Standard Chartered and credit risk mitigation was offered by AIG.
Managing global invoice payments can be time-consuming and inefficient for companies, as trading partners often have unique requirements based on specific payment terms, currencies, country-specific laws, and contract terms. Because of this, companies often establish multiple, local, trade finance programmes, which can involve duplication, inefficiencies and minimal standardisation across the organisation.
This makes it harder to optimise working capital and have effective visibility of compliance and counterparty risk across the company. Through the transaction, TradeIX, AIG and Standard Chartered Bank partnered to create a secure and more efficient solution leveraging blockchain technology.
David Shearer, partner, comments:
“This is an exciting and innovative platform that demonstrates the growing importance of blockchain in driving forward efficiency and transparency in the financial sector. It will likely serve as a positive test case for its future roll out across the industry.”
Nick Grandage, head of banking & finance, Europe, Middle East and Asia, comments:
“Being part of the creation of this first-of-its-kind trade finance platform highlights our long-standing experience in advising on both traditional trade finance transactions and on the latest cutting edge distributed ledger technology globally.”
The Norton Rose Fulbright team was led by David Shearer and Nick Grandage assisted by Tudor Plapcianu (lead associate), Mirella Hart and Merel Klinkers. James Russell and Zayed Al Jamil advised AIG on IT related matters and Hannah Meakin and Lucy Dodson advised AIG on regulatory matters. The team worked closely with all parties to determine and optimise the particulars of the platform from an operational, commercial and legal perspective.
Norton Rose Fulbright’s FinTech practice is at the forefront of legal thought leadership in the sector and offers a combination of deep global tech experience with regulatory and financial services knowledge. The firm advises some of the world’s leading financial institutions, technology companies, start-ups and investors on legal and regulatory issues in the sector.
