IMDA’s TradeTrust framework enables governments and businesses to issue, exchange and verify trade documents risk-free, with enhanced efficiency and affordability
You may have heard of fraud cases involving the creation of counterfeit receipts for non-existent concert tickets or the placement of fake QR code stickers over authentic codes, leading to payments being redirected to scammers. Regardless of whether transactions are conducted online or in-person, verifying the authenticity of a payment invoice or receipt with absolute certainty can be challenging.
This is no less true when it comes to navigating the turbulent waters of the global trade landscape, where charting a safe path can be tricky. Imagine trying to verify the trustworthiness of each shipment’s documentation in a timely manner while sailing in a sea rife with dangers such as forgery and alteration, both of which lurk in the background.
This odyssey is further complicated by obstacles such as multiple intermediaries and excessive paperwork that hinder prompt, on-the-spot verification – thus disrupting the seamless journey of goods and commodities around the world.
THE SMARTER, MORE TRUSTWORTHY WAY TO DOCUMENT TRADE
In a bid to elevate trust and operational efficiency in the international trade sector, the Infocomm Media Development Authority (IMDA) has developed TradeTrust. This pioneering framework and digital utility empowers governments and businesses to securely generate, exchange and authenticate trustworthy documents, while also facilitating the seamless transfer of ownership titles across diverse digital platforms. To date, partners who have implemented TradeTrust include stakeholders in the shipping, supply chain, IT and finance industries.
While smart documents allow users to add signatures or fill in form templates, TradeTrust’s documents enable users to verify their provenance and authenticity by scanning a QR code – which is cryptographically secured for an additional layer of protection – or uploading the file in question, thus enhancing trust and reducing the likelihood of fraud.
As TradeTrust’s open-source code is available free of charge, businesses and solution providers can easily integrate it into their systems to issue, verify and transfer ownership of documents such as certificates of origin and bills of lading.
AN ACCESSIBLE, FLEXIBLE WAY TO VERIFY
TradeTrust holds revolutionary potential for the international trade industry, where fraud stands out as the primary cause of cargo losses.
The worldwide cargo trade, valued at around US$25 trillion (S$33.7 trillion), relies on an estimated four billion paper documents, which are vulnerable to being lost, destroyed, altered or counterfeited. Even electronic documents – such as digital invoices – can be duplicated and altered without a stakeholder’s knowledge.
“Conventional efforts to digitalise the shipping industry have so far resulted in fragmented, siloed ecosystems that impede efficiency in exchanging electronic documents,” said Mr Loh Sin Yong, director (TradeTrust), IMDA.
“TRADETRUST NOT ONLY RESOLVES THE LONGSTANDING ISSUE OF PAPER-BASED CROSS-BORDER TRADE, IT ALSO SERVES AS A TRUSTED GLOBAL FRAMEWORK THAT CAN ENABLE THE EXCHANGE OF ELECTRONIC TRADE DOCUMENTS ACROSS DIFFERENT DIGITAL PLATFORMS.”
– MR LOH SIN YONG, DIRECTOR (TRADETRUST), IMDA
TradeTrust, which is available for free download on GitHub, provides accessibility to businesses and organisations of all sizes. This includes small- to medium-size enterprises that may lack the resources to invest in expensive verification solutions.
As a digital utility, TradeTrust offers flexibility, too. In situations where paper is still required, printed TradeTrust documents are equipped with a QR code. When the code is scanned with a phone or device linked to the Internet, the document can be immediately verified on the TradeTrust website or via any TradeTrust-enabled solution.
Additionally, the TradeTrust framework’s integration with a public blockchain safeguards documents from tampering or counterfeiting risks. “No matter the number of hands a TradeTrust document passes through, or how many times it is printed or digitally shared, its integrity can always be confirmed,” highlighted Mr Loh.
WHEN GREATER TRUST SAVES TIME AND COSTS
TradeTrust transforms manual paperwork that used to take hours into tasks that can now be accomplished in minutes. This efficiency allows vessels to depart from berths earlier, leading to significant time and cost savings.
Each shipment of goods comes with a document known as the bill of lading (BL), functioning akin to a combination of a flight boarding pass and passport. This crucial document provides essential information about the goods – including their origin and destination – and outlines the terms of their carriage. In addition to serving as evidence for the contract of carriage, the BL serves as a receipt for the transported goods and a document of title.
Verification of the information in the BL traditionally entails an extensive exchange of paperwork, culminating in the vessel master signing off before the goods can commence their journey.
By eliminating paper processes, electronic BLs (eBL) – like those generated by the TradeTrust framework – have been anticipated to result in savings of approximately US$6.5 billion in direct costs for the maritime industry and unlock the potential for up to US$40 billion in global trade value.
In recognition of its innovation-driven impact on sustainability, TradeTrust was recognised with the World Summit Award (WSA) recently. Created as part of the United Nations World Summit on the Information Society’s framework, the WSA is awarded to digital developments that make significant contributions to the UN Sustainable Development Goals agenda.
PILOTING ELECTRONIC BILLS OF LADING, POWERED BY TRADETRUST
Embracing eBLs through a TradeTrust pilot project has empowered commodities trading firm Maptrasco to streamline operations, cut costs and most importantly, allocate resources for business expansion.
Mr Manish Khaitan, the company’s chief financial officer, noted that sending cargo documents through multiple couriers was both time-consuming and costly. While Maptrasco is based in Singapore, it ships cargo from the United States to India.
“Using TradeTrust, our appointed shipping line, Maersk, transfers the ownership of the eBL to Maptrasco,” he explained. “We verify the contents and check for any errors. All of our export documents are created based on this eBL.”
Once the checks are completed, Maptrasco relies on the TradeTrust portal or a TradeTrust-enabled solution to transfer the title of ownership for the eBL to its bank, DBS, for onward processing to the bank in India that issues a letter of credit.
“Done the old-fashioned way with paper, this transaction would take three to four weeks, as compared to five days using TradeTrust,” he said.
“LEVERAGING TRADETRUST BRINGS ADDITIONAL ADVANTAGES SUCH AS MINIMISING COURIER FEES, SIGNIFICANTLY REDUCING INTEREST BURDENS, EXPEDITING COLLECTIONS AND ULTIMATELY SHORTENING THE CASH FLOW CYCLE.”
– MR MANISH KHAITAN, CHIEF FINANCIAL OFFICER, MAPTRASCO
He believes that digital utilities like TradeTrust will play a key role in driving Maptrasco’s expansion: “Since we can better manage resources and be cost-effective at the same time, we are able to explore new opportunities. Going forward, this is the way to do business.”
With TradeTrust, businesses and governments globally can reliably issue, verify and transfer title ownership of documents, presenting a more intelligent and efficient method of trade.