The digital revolution against trade fraud

THE world urgently needs a revolution of the current system of international trade. In just the first six months of 2020 alone, the world has witnessed a number of massive corporate scandals that involved allegedly fraudulent or fabricated trade documents.

Take the Hin Leong debacle for example. On June 24, the interim judicial managers of the insolvent oil trader reported that the company's officers may have fabricated documents and used them to mislead banks into extending over US$1 billion of financing to the company. Documents that may have been forged or were of dubious authenticity included bank remittance advices, bank statements, bills of lading, sales contracts, sales invoices, swap-trade confirmations, swap-trade tickets, deal-settlement slips and inter-bank transfer certificates.

Such extensive corporate frauds have been able to take place because the current system of international trade requires the use of certain trade documents that were historically designed to permit cross-border trade to take place, without the buyer and seller needing to personally check on the status of an international supply of goods.