Transaction further expands Contour’s reach with DBS joining the blockchain network
SINGAPORE, 12th May 2020 | Press Release
Contour, the open trade finance network, has today announced the completion of a Baosteel and Rio Tinto deal, supported by Chinsay, DBS Bank, essDOCS and Standard Chartered Bank, marking the first fully-integrated paperless trade for Rio Tinto with a Chinese counterpart.
As the first paperless deal in the iron ore industry to be transacted in Chinese Renminbi (RMB), the trade signifies an important step within the market for supporting the RMB currency. The collaboration between Rio Tinto and Baosteel also showcases how digital initiatives can effectively enhance the efficiency and security of cross-border trade finance flow, at a time when delivery of physical documentation can be more challenging.
Head of Raw Material Procurement at Baowu said: “This is a very meaningful initiative. As China’s largest and most representative steel company, China Baowu have been actively promoting RMB settlement in cross-border trading. The significance also lies in cooperating with leading upstream company Rio Tinto to explore the application of digital innovation such as blockchain in the traditional industry of raw material trading. It helps to improve the transaction flow and efficiency, and is a solid step forward on the path of the industry’s green development.”
The paperless trade was possible thanks to Contour’s partnership with Chinsay – announced in March – and Chinsay’s ICP platform, which provides the corporate workflow and data for the process, allowing companies to easily collaborate in one place. The Letter of Credit (LC) issuance and approval of key contract terms was performed digitally and was completely paperless, enabled by Chinsay and its ICP software.
Colin Hayward, Chinsay’s CEO, said: “We are very pleased to be partnering with Contour and to keep innovating in our sector together. It is great to see traction building, with more corporates and banks getting the benefits of trade digitalisation.”
essDOCS, another Contour partner, managed the electronic bill of lading and other documentation through their CargoDocs service. Rio Tinto, Baosteel, ship agent, shipowner, DBS Bank and Standard Chartered Bank collaborated to draft, approve, sign, issue, transfer and electronically present the eB/L plus upload supporting documents. This resulted in significantly reducing trade document turnaround times and accelerating the trade via integrated data flow, enabled by the CargoDocs-Countour interface. This application is vital in a new era where physical documents could be a major barrier to completing a trade.
The transaction also marks DBS Bank’s first on Contour as the latest member to join the network. A leading financial services group in Asia, DBS was the advising and nominated bank for the deal, together with Standard Chartered Bank, a founding bank of Contour, as the issuing bank.
Carl Wegner, CEO of Contour said: “To have another transaction take place on Contour’s network by two well-renowned names highlights the relevance this technology has for the sector. Now, more than ever, there is a greater demand for seamless, digital sign-off for the LC process. The delays and archaic processes that have marred the trade finance sector can no longer happen, and effective solutions are vital to keeping the sector alive. This transaction, combined with another well-respected financial institution joining our network and our ongoing relationship with Chinsay and essDOCS, furthers Contour’s aim of providing a neutral network where LC transactions can be conducted from start to finish.”
Additional comments from DBS Bank, essDOCS, Rio Tinto and Standard Chartered
John Laurens, Group Head of Global Transaction Services, DBS Bank, said: “Sustaining and developing supply chains has never been more essential than it is right now. As businesses accelerate their digitalisation objectives to find new opportunities and counter challenges in the current trade environment, a collective effort across banks, industries and technology providers is key to driving digitalisation in a manner that delivers the network effect that is vital to trade. Digitalisation of trade presents an opportunity to not only transform the long term relationships with our clients, but also provide the necessary means to bring about sustainable and transformational changes to businesses, large and small, and across the ecosystems they are part of. As the latest member to join the Contour network, we are proud to have played an integral role in this landmark transaction by facilitating the first cross-border RMB-denominated trade settlement done digitally, where DBS took the lead as Rio Tinto’s nominated and advising bank to effectively manage forex risks pertaining to the transaction.”
Alexander Goulandris, Co-CEO, essDOCS, said: “Cross-platform collaboration and integration remains a crucial catalyst for accelerating paperless trade, particularly at a time where digitization functions as an operational, financial as well as health and safety imperative. We look forward to continuing to enable integrated paperless trade with our partners, and accelerate the digitization journey of leading corporates and banks.”
Simon Farry, Vice President, Sales & Marketing for Rio Tinto’s Iron Ore business: “The successful conclusion of this transaction with Baosteel demonstrates Rio Tinto’s commitment to collaborate with our customers and drive yet another first in the iron ore industry – paperless RMB trade. We will continue to utilise technology such as blockchain and end-to-end paperless solutions to enhance our customers’ experience and bring the industry closer to a full cross-border digital trade future.”
Samuel Mathew, Global Head of Documentary Trade, Standard Chartered, said: “In our current environment where we have seen physical constraints challenging the old ways of working and disrupting traditional trade, the successful completion of this transaction truly demonstrates the potential of paperless solutions in trade finance, especially in helping our clients to quickly adapt to the new normal. It also further highlights the need for industry players to come together and co-create innovative and scalable solutions, which will enable trade and supply chains to function more efficiently and sustainably. As one of the founding members of Contour, we are delighted to have played an important role as the digital LC issuing bank in such a significant trade which marks the first Yuan-denominated international LC between two banks via blockchain. This will hopefully be the first of many such transactions to follow with our clients and other banks, as they look to digitise their trade flows on the Contour network”
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Contour is building the world’s open trade finance network. With industry-wide collaboration and blockchain technology we are dissolving barriers to create seamless trade. Our network of Banks, Corporates and Partners enable the instant flow of trusted data across the world’s trade routes and fragmented ecosystems, creating a streamlined future for businesses.
Founded in 2000, Chinsay is the leading global provider of contract automation systems for the commodities and freight markets. Its Intelligent Contract Platform (ICP) enables digitalisation of contract data sets across the supply chain. As a pure software-as-a-service platform, with the ability to support API integration, it has one of the fastest deployment times in the industry. The Intelligent Contract platform captures data during the contract creation process, providing a Golden Copy as a result of collaboration between all involved parties.
Chinsay’s concept of ‘one-time deal capture’ enables integration with risk management, accounting, legal and operational functions. This results in cost savings, increased efficiencies, improved security and risk control. ICP provides companies with the opportunity to make informed, data-driven business decisions.
Chinsay partners with clients and other technology vendors to increase efficiency and improve security and risk controls. Through industry-leading product discovery and devops practices, Chinsay rapidly and continuously adapts its software precisely to our clients’ needs. Leveraging Microsoft Azure facilities for end-to-end encryption allows us to offer the highest possible data security to our clients.