"Global Trade Finance Must Also Address ESG and Digitalization"

[Asia Economy Reporter Choi Dae-yeol] There is a growing call to prepare for movements aimed at considering environmental impacts in financial regulations necessary for companies engaging in trade transactions such as imports and exports. While issues like illicit funds from illegal transactions, money laundering, and anti-terrorism remain important, there is now an added emphasis on reflecting companies' carbon reduction efforts.

On the 17th, the Korea Chamber of Commerce and Industry held an expert seminar on international trade finance policy trends with the International Chamber of Commerce (ICC), discussing such measures. At the event, Tomasz Kubiak, an ICC committee member, stated, "The biggest issue for the ICC International Finance Committee next year will be 'sustainable trade finance,'" adding, "We will focus on establishing guidelines applicable to interbank financial transactions in the future."

As carbon neutrality emerges as a global agenda, discussions are underway to apply individual companies' carbon reduction efforts to trade finance transactions. Sustainable trade finance refers to the movement to apply environmental standards to trade finance, in addition to combating illicit funds and money laundering.

Recently, there has also been a notable trend toward digitalizing platforms to more effectively prevent trade-related financial crimes. Jung Yong-hyuk, a member of the ICC Korea Finance Committee, said, "Illegal money laundering is occurring worldwide by exploiting complex trade transactions, so public-private cooperation is necessary to prevent this," adding, "In particular, trade finance involves banks manually entering information into letters of credit, which consumes significant time and cost. The trend is to streamline anti-money laundering processes by using artificial intelligence (AI) to scan and verify trade documents."

He continued, "Overseas, trade finance transactions are rapidly conducted through trade intermediary platforms, but in Korea, there are no service providers yet due to financial regulations," and argued, "If transactions are conducted through digital platforms, banks can reduce anti-money laundering and various trade document review costs, enabling efficient and stable transactions. Therefore, domestic banks should be supported to utilize such platforms."

Choo Jeong-hwa, head of the European Trade Team at the Korea Chamber of Commerce and Industry, said, "The trends in international trade finance are sustainable trade finance, digitalization, and the convergence of financial and non-financial services, but Korea’s response has been slow," adding, "It is necessary to raise awareness of trade finance among our companies and to revise systems so that domestic financial firms can provide converged platform services in line with international trends."

This content was produced with the assistance of AI translation services.