A massive electrical outage swept through Spain and regions of Portugal and France yesterday, leaving millions without access to electricity, mobile, and internet services. 

While most areas regained power late on Monday night, the blackout laid bare the vulnerability of payments systems.

Many banks in Spain halted access to point-of-sale terminals, leaving shops and restaurants without ways to accept card or online payments from customers. The European Central Bank (ECB) extended its delivery versus payments deadline by an hour in a rare move, almost certainly prompted by the outage, as banks’ central securities depositories struggled to reconcile payments made during the day. 

The blackout, which affected Spain as well as the Basque regions of France and much of Portugal, including Lisbon and Porto, was due to an electrical failure in Spain’s power grid, which in turn affected the connections with its neighbors; overall, an estimated 50 million people were affected. 

The cause of the blackout is believed to be a “rare atmospheric event” that caused extreme temperature variations in Spain, leading to an imbalance in the frequency of the national power grid that had knock-on effects on all surrounding regions. Extreme temperature variations, an effect of climate change and global warming, are expected to sweep through most of Europe this week, with the UK experiencing temperatures as high as 27°C in some areas. 

The outage has had little if any economic impact, as critical infrastructure like hospitals stayed mostly unaffected and many businesses stayed open. The Spanish stock exchange remained functioning throughout the outage, opening this morning with a slight gain. However, the widespread, immediate halt in online payments highlighted the fragility of the international payments system and its reliance on underlying infrastructure. 

Spain’s central bank said that by 15:30 local time – four hours after the beginning of the blackout – its national and cross-border payments system was back to normal. However, bank branches, merchants, and individual businesses experienced problems throughout the day as card readers ran out of batteries and ATMs remained inactive. The ECB postponed the start of the delivery versus payment cut-off by an hour.

Spain is one of the most cash-dependent countries in Europe, despite efforts by the governments to encourage more uptake of online and card payments to decrease corruption. If the blackout had occurred elsewhere, the effect may have been even more pronounced, grinding national economies to a halt: the UK, for example, only has 6% of payments made in cash, compared to Spain’s 57%.

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The paper is responding to a convergence of crises: Russia’s war on Ukraine has upended the post-WWII European peace order, the US is reconsidering its commitments (with recent US policy signals suggesting Europe must be prepared to shoulder more of its defence burden​), and rising powers like China are challenging the rules-based order and arming rivals​.

Within this context, Europe urgently needs to strengthen its defence capabilities and resilience, which means the Bloc’s leaders must find innovative ways to finance a defence build-up, bolster the continent’s defence industrial base, and recalibrate geopolitical relationships – all without undermining fiscal stability or the broader economy.

No small task.

An €800 billion challenge

Europe’s defence ambitions require massive investment. Estimates put the additional funding need in the range of €500–800 billion, a level European states cannot simply reallocate from existing budgets or raise through conventional debt without sacrifice. High public debt levels after recent crises mean many governments are fiscally constrained, unwilling or unable to borrow large sums on the market for defence.

In short, traditional funding approaches are insufficient.

Rob Murray, former Head of Innovation at NATO and founder of the DSR Bank, said, “The DSR Bank is a strategic, credible, and market-based solution to the grave security challenges facing Europe which ensures we can defend democracy without undermining economic stability. The DSR Bank is a key weapon in the armoury of European governments who want to strengthen their defence capabilities but are held back by debt limits and fiscal constraints. It is welcome that the DSR Bank has won the support of the European Parliament.”

The new paper urges member states to support establishing a DSRB as a multilateral lending institution to provide low-interest, long-term loans for critical security priorities and effectively act as a dedicated development bank for European defence and security needs.

As a multilateral bank capitalised by its member governments, a DSRB would likely enjoy a AAA credit rating, which would allow it to issue debt and lend to governments for defence projects on very favourable terms​.

More important, however, is the notion that borrowing from such an institution would be treated as “contingent liabilities” on national balance sheets. Effectively, it is off-balance-sheet financing that does not add to a government’s official debt stock​, allowing nations to maintain fiscal discipline on paper while actually deploying fresh capital into defence.

As a result, a multilateral defence bank can dramatically increase the money available for defence without increasing the risks associated with greater national debt or the political and market backlash that might accompany a massive debt-funded military buildup.

Considering the supply chain

A key challenge in rapidly expanding defence production is ensuring that all suppliers, even those deep down the chain, have the liquidity to fulfil larger orders.

Defence supply chains are complex.

A prime contractor (say, an aerospace giant) relies on hundreds of smaller suppliers for components, materials, and services. If those tier-2 and tier-3 suppliers cannot access working capital to buy raw materials or ramp up capacity, they become bottlenecks, no matter how much money governments throw at the primes.

Currently, many smaller firms in critical defence supply chains are cash-constrained. They often face lengthy payment cycles on government contracts (where payment may come only upon delivery or milestone) and struggle to get affordable bank financing in the interim. Traditional lenders have been reluctant to support defence-sector SMEs, citing compliance burdens and reputational risk, especially when contracts are unpredictable or classified​.

This creates a dangerous vulnerability: without liquidity, smaller suppliers cannot quickly scale up production, directly limiting Europe’s capacity to arm itself in an emergency​. Thankfully, deep-tier supply chain finance may be able to help.

Rebecca Harding, CEO of the newly created Centre for Economic Security, said, “The DSRB is an attractive way for governments to increase their defence to critical national infrastructure starting with defence and security. It provides a solution that will work, via Guarantees, to get to where support is really needed – in deep tier supply chains – to make them more effective through efficient supply chain finance. We live in challenging times and this is exactly the right institutional response.”

Deep-tier supply chain finance is an innovative model that unlocks financing for lower-tier suppliers (often SMEs) by leveraging the credit strength of larger, creditworthy anchor buyers​. In practice, this means a small subcontractor can borrow against the payment approval of a major defence contractor or government, receiving immediate cash at the more favourable rates tied to the anchor’s stronger credit, pushing liquidity down the chain to where it’s needed most.

Where does a DSRB come in?

The proposed DSRB can play a catalysing role here. By providing risk guarantees or insurance to commercial banks for defence-related loans (akin to how the European Bank for Reconstruction and Development operates), the DSRB would make it much more palatable for banks to extend credit to defence suppliers​.

With a DSRB guarantee in hand, banks can finance an SME subcontractor’s purchase of, say, specialised machine tools or materials for missile production, confident that even if something goes awry (cancellation, geopolitical issues), their loan is protected.

Many private banks have indicated that they would be keen to lend to defence companies if a multilateral institution stands behind the deal​. We can expect the DSRB to issue such guarantees and perhaps work with export credit agencies to funnel capital into the defence supply chain​.

Sean Edwards, Chairman of ITFA, pointed to the statement released by ITFA, which said, “Paragraph 80 of the White Paper rightly calls for the establishment of a dedicated Defence, Security, and Resilience Bank (DSRB). This institution will not only provide vital financing for Europe’s security needs but will also employ supply chain finance techniques, particularly deep-tier finance, to reinforce the resilience of military supply chains, which are often more fragile than they appear. Ensuring liquidity at every level is critical. This represents a strategic opportunity for the trade finance community—not only to enhance security and stability in Europe but also to develop an underbanked asset class with significant potential. ITFA encourages its members to explore these opportunities.”

Investment in defence supply chains will also have positive spillover effects beyond military might. Such spending will stimulate other high-value industries, such as aerospace, electronics, cybersecurity, shipbuilding, and more. In the long run, this can lead to less reliance on foreign suppliers, more intra-European trade, and potentially export opportunities if European defence firms become more competitive globally.

But these hypothetical benefits will remain hypothetical without a seamless execution.

Money must flow to the right places quickly, which is why supply-chain financing tools and the DSRB’s agile funding are so crucial. If Europe succeeds, its defence renaissance could become a driver of economic renewal, especially in regions with defence industries.

Geopolitical shifts creating the need for strategic autonomy

For decades, Europe’s defence posture has been sheltered under the US umbrella via NATO. Now, with uncertainty about US engagement (exacerbated by the possibility of US policy retrenchment​), European leaders are seeking strategic autonomy and the ability to deter threats and act in crises with less dependence on Washington.

This is one of the reasons why the very nature of the proposed DSRB is multilateral. The bank is envisioned to include EU members and willing non-EU states (the UK is a prime candidate), leveraging London’s unique strengths in finance and defence​. Similarly, other NATO allies or partner nations (Norway, possibly Canada, etc.) might participate, pooling resources for collective security.

Geopolitically, the establishment of a defence bank and common funding tools shows that Europe is backing its strategic commitments with concrete financial power, effectively securitising its security needs. The implication is that Europe’s defence is becoming entwined with global finance.

In modern geopolitics, fiscal capacity and financial engineering can be as vital as troop counts and tanks. A credible financial commitment to collective defence can deter adversaries by showing that Europe can and will spend what it takes to prevail in a protracted conflict.

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This development was first reported by Global Trade Review (GTR).

The London-based receivables finance provider, established in 2020, specialised in financing mid-market borrowers with a focus on commodity trading. Joint administrators from PwC were appointed on 3 March by the High Court, according to a public notice, including restructuring partner Ed Macnamara alongside directors James Cameron and Tom Crookham.

While Artis Finance has entered administration, its subsidiaries, including Artis Loanco 1, remain operational. However, corporate documents reveal that Artis Loanco 1, which provided loans secured against trade receivables, had set aside provisions for a $7.1 million impairment as 2023 drew to a close.

The collapse of Artis Finance mirrors broader distress across the sector. December saw UK-based Kimura Capital close its London lending operations and return funds to institutional investors after divesting its commodity trade finance fund’s exposures amid working capital concerns.

In the same period, London-headquartered Stenn entered administration following allegations of suspicious activity, while in Dubai, investors are pursuing liquidation proceedings against the Rasmala Trade Finance Fund.

Following these cases, questions have emerged about oversight in trade finance, particularly among non-bank lenders who face inherent vulnerabilities to financial crime. Stenn, once valued at over £700 million, collapsed after HSBC discovered potentially fraudulent clients, despite numerous red flags, including the CEO’s previous connections to insolvent firms and questionable client transactions.

In the case of Artis, legal entanglements complicated the company’s position. In December 2023, Artis initiated legal proceedings against TMT Metals—a metals trader that Trafigura had accused of orchestrating a “systematic” fraud in the nickel market—alongside several companies reportedly connected to TMT director Prateek Gupta. The case stalled, hampered by a freezing order Trafigura had secured against Gupta.

Companies House records further indicate Artis has outstanding charges linked to UK commodity trader DL Hudson.

Editor’s note: This article relies on the investigative work done by GTR.

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• US President Donald Trump has announced a 25% tariffs on imports from Canada and Mexico, to which Canada has retaliated with a 25% tariff.
• The US has also placed a 10% tariff on Chinese imports, mediating from the promised 60% figure.
• Trump has warned of similar measures for the EU.

Some speculated, and others hoped, that Donald Trump’s promises of brutal tariffs were merely an election-winning tactic to frenzy his domestic fanbase. But on 1 February 2025, less than two weeks into his presidency, it transpired that Trump was being serious. Executive orders signed on Saturday imposed a 25% tariff on imports from Canada and Mexico and a 10% levy on goods from China. These tariffs will take effect from tomorrow, 4 February.

On Sunday night, 2 February, Trump promised that tariffs on the European Union (EU) would “definitely happen” and “it’s going to be pretty soon.”

Trump posted this executive order by invoking the International Emergency Economic Powers Act (IEEPA), which grants the president authority to regulate international commerce in response to a declared ‘national emergency’. 

IEEPA was first used by then-President Jimmy Carter in 1977, in response to the Iran hostage crisis. During his first term, Trump threatened to impose tariffs on Mexico in response to the “illegal migration crisis”, which he backed down from in June 2019, but he did use the IEEPA against Venezuela and Iran.

This time, Trump said the flow of “illegal aliens and drugs” – referring to 21,000 pounds of fentanyl apprehended by the Customs and Border Protection (CBP) in the last fiscal year, and “more than 10 million” illegal immigrants entering the US under Biden – constitutes a national emergency. But the sanctions are incommensurate with the crime, particularly on its northern border, through which less than 1% of illegal immigrants entered the US, and where just around 1% of the US’ fentanyl encounters take place.

Canadian Prime Minister Justin Trudeau has already imposed a 25% reciprocal tariff on American goods, and Mexican President Claudia Sheinbaum, ministers across EU countries, and China have all vowed retaliation. “It’s important that we don’t divide the world with numerous tariff barriers,” said German Chancellor Olaf Scholz, promising a collective response. “[The EU is] a strong economic area and has its own courses of action.”

Trump admitted on Sunday that there may be “some pain” from his tariffs, “but […] it will all be worth the price that must be paid.” Trade wars rarely have victors, but those who suffer the most are invariably the poorest. 

The North American retaliation

Sheinbaum “categorically reject[ed]” Trump’s assertions in his IEEPA declaration, pointing out that the Mexican government has “seized more than 40 tons of drugs in four months, including 20 million doses of fentanyl”, and “arrested more than ten thousand people linked to these groups”.

Sheinbaum said, “I instruct the Secretary of Economy to implement plan B that we have been working on, which includes tariff and non-tariff measures in defence of Mexico’s interests.”

Retaliatory tariffs in the USMCA region is no new phenomenon. The softwood lumber dispute between the US and Canada lasted from 1982 to 2014, and is based on the countervailing duties (CVDs) placed by the US on imports of this wood to Canada; the British Columbia region reported the loss of nearly 10,000 jobs as a result between 2004 and 2009.

This time around, Trudeau has targeted American alcohol, fruits and vegetables, household appliances, and clothing items.

The US has decided to impose a reduced 10% tariff on Canadian energy imports, rather than the full 25% rate, designed to help limit potential increases in consumer energy costs. Despite this measure, analysts project that US consumers could still face fuel price increases of up to 50 cents per gallon. Simultaneously, the automotive industry will also likely take a hit, considering that about 50% of auto-part imports in America come from Canada and Mexico, and about 75% of American exports go to its neighbours.

Nonetheless, Canada and Mexico are heavily dependent on the US market: Canada sends 78% of its annual exports ($567 billion), and Mexico 80% ($593 billion), to the US. However, the US maintains a more diversified import portfolio – of its $3.17 trillion in annual imports, only about 14% comes from Canada and 15% from Mexico. This imbalance may give the US more flexibility in its trade options and potentially stronger negotiating power with its North American neighbours. Already, in currency markets, the Mexican peso fell by almost 3%, and the Canadian dollar hit its lowest level since 2003. 

China countermeasures

Similarly, while retaliatory tariffs are a common feature of US-China trade relations, they have never been this severe. During Trump’s first term, $370 billion worth of Chinese imports were affected by tariffs, a figure set to increase with the additional 10% rate. But this differed from the 60% he touted on the campaign trail—probably because the Chinese capacity for retaliatory tariffs poses a significant threat.

An interesting feature of Chinese retaliatory tariffs is their targetedness, as we are now seeing in Canada. In 2018, Trump announced tariffs of 25% on steel and 10% on aluminium imports from China; in response, China levied a series of 15% to 25% tariffs on agricultural imports. By 1 September 2019, the number of US agricultural tariff lines with Chinese retaliatory tariffs increased to 1,053. 

This move was strategically against American farmers (a key demographic of Trump voters). In the short run, the downward pressure on US farm incomes triggered ‘trade aid’, federal assistance for the sector. And trade networks meandered around obstacles, as China began to rely on other southern allies for agricultural products, from soybean and pork to cotton and tobacco.

China’s Imports of Agricultural Products, 2014-2018, in Nominal Billions (B) of US Dollars. Source: Congressional Research Service

Today’s macroeconomic landscape mirrors this but renders it much sharper. China’s Belt and Road Initiative, a series of urbanising initiatives across the developing world, has tied the country to the fortunes of these nascent trading hubs. The South-South rerouting is underway; this time, retaliatory tariffs may even cut the US out of the equation altogether.

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Mark Carney, former Governor of both the Bank of Canada and the Bank of England, warned that the proposed tariffs would hamper economic growth while stoking inflation. “They’re going to damage the US’s reputation around the world,” said Carney, who is currently among the contenders to succeed Trudeau as leader of Canada’s Liberal Party.

The UK’s Prime Minister Sir Keir Starmer and Foreign Secretary David Lammy are modulating their stance to shield the UK from such measures. For now, Trump has said of Starmer that “we’re getting along very well, we’ll see whether or not we can balance out our budget”. Chris Southworth of the International Chamber of Commerce UK said on LBC Radio that the UK could serve as a “pragmatic bridge”, a broker of conversation between the US and Europe. But complacency is a weakness when dealing with someone so volatile and impulsive.

Is this just a calculated move to demonstrate resolve? If so, it’s a risky gambit that could destabilise the global economy. But the US would do well to consider how many opponents it can afford to make because if the world of trade and trade finance is anything, it is malleable.

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The Bank of England’s Prudential Regulation Authority (PRA) announced on Friday it would delay the implementation of the Basel 3.1 rules to 1 January 2027 due to “uncertainty around the timing of implementation of the […] standards in the US”. 

The Basel 3.1 regime, which went into effect on 1 January in the EU, would likely affect the capital requirements of credit insurance providers, while keeping standards for trade finance largely the same. 

Basel 3.1 is a set of regulations intended to increase the amount of equity kept by banks in order to make them more resilient to times of stress and avoid the bailouts and collapses of 2008. The announcement of the regulations by the US Federal Reserve in 2023 faced a strong backlash from the US banking sector, leading the American regulator to announce less restrictive standards and delay setting a timeline for their implementation. The PRA also modified the rules to reduce the burden on banks and financial institutions last year.

This is the second postponement of the rules, which were originally meant to come into effect in July of this year but were delayed by 6 months, to January 2026, in September. The delay comes amid worries about how and when the incoming Trump administration will implement the rules. In the announcement, the Bank of England cited concerns around “competitiveness and growth considerations” if implementing the rules in the US differed significantly from that in the UK, as this might give US institutions a competitive advantage. 

It is feared that the Trump administration, which has signaled its unfriendliness to financial regulation that could restrict growth, might further water down the rules or scrap them altogether. UK regulators may be waiting to see the US’s next move as they balance limiting risk and complying with international standards with maintaining competitiveness.

The EU implemented the regulations this January with some changes, raising concerns about the UK falling out of step with its neighbours; however, laxer regulations could give UK institutions a competitive edge in the next two years, giving the nation’s financial industry a welcome boost.

The Bank of England announced that the final date for full implementation of the regulation, 1 January 2030, will remain unchanged, and the transitional periods in the rules will be reduced to make up the difference accordingly.

The data collection exercise on Pillar 2 capital requirements, announced by the PRA in September, will also be halted and its deadline extended, as will the deadline to join the Interim Capital Regime, previously set to 28 February 2025.

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• The Hague-Visby Rules’ one-year time bar was in relation to trade finance issued against a bill of lading as security and a claim for mis-delivery.
• For the trade finance sector, the date of delivery in accordance with the bills of lading held as security will come under greater scrutiny.

This article will reflect on the recent decision of the Supreme Court of the United Kingdom issued on 13 November 2024 within Fimbank Plc v KCH Shipping Co Ltd (“The Giant Ace”). An overview of the Hague-Visby Rules will provide analysis based upon recent case law in the United Kingdom, and discuss the implications for the trade finance sector.

In the recent case of The Giant Ace, a trade finance bank was prevented from exercising a claim for mis-delivery against the carrier of the cargo. The bank was the lawful holder of the bill of lading and sought to exercise its rights of suit, as the carrier ship discharged a cargo of coal financed by the bank without the presentation of the original bill of lading. The bank was unable to obtain payment from their client for the deal. 

The Supreme Court of the United Kingdom clarified that the Hague-Visby Rules apply to a claim for mis-delivery, and therefore, the bank, as the lawful holder of the bill of lading, was time-barred for pursuing a claim presented more than one year after the delivery of the cargo.

Overview of Fimbank Plc v KCH Shipping Co Ltd (“The Giant Ace”)

Within The Giant Ace, the English High Court confirmed that the Hague-Visby Rules were applicable in the event of a mis-delivery claim. 

In March 2018, a cargo of coal was shipped by Farlin Energy & Commodities FZE (“Farlin”) on the Giant Ace vessel, with a bill of lading issued on the 1994 Congenbill form. As the original bill of lading was not available at the time of arrival at an Indian port in mid-April 2018, the carrier, KCH Shipping, discharged the cargo against a letter of indemnity presented by the charterers. The coal was then sold to third parties by Farlin. Fimbank, the bank that had financed the deal with Farlin held the bill of lading as security against payment under the terms of their financing arrangement. In argument, the bank identified that they took the bill of lading as security by way of a pledge by Farlin, and therefore obtained rights of suit under the Carriage of Goods by Sea Act 1992. The bank alleged that it was not able to obtain payment for the finance of the cargo from Farlin. Fimbank therefore intended to exercise their rights of suit to pursue a claim against KCH Shipping for the wrongful discharge of the cargo without the presentation of an original bill of lading.

The leading question presented in The Giant Ace was “Does Article III, rule 6 of the Hague-Visby Rules, apply to claims for mis-delivery of cargo occurring after discharge has been completed?” If the Hague-Visby Rules applied, in accordance with the House of Lords’ finding in Aries Tanker Corp v Total Transport (“The Aries”) any claim would be extinguished by the time bar, to enable the carrier to clear his books. Whereas if the claim was outside of the scope of the Hague-Visby Rules, in accordance with s (2) and s (5) of the Limitation Act 1980 a claim in tort or in contract may respectively be presented within six years of the cause of action. Males LJ identified that the question “has been much debated” in English law.

Fimbank presented a claim against the carrier on 24 April 2020, around twenty-four months after the cargo should have been delivered. Within the case of Compania Portorafti Commerciale S.A. v Ultramar Panama Inc. and Others (“The Captain Gregos”), although the claim was not directly related to the application of Article III (6), Bingham LJ observed that the time-bar could not be more emphatic in the scope of its application. Discharge and delivery occurred simultaneously within Deep Sea Maritime Limited v Monjasa A/S (“The Alhani”), as the cargo was transshipped, and the application of the time bar was examined within the context of the Hague Rules. Within conclusion, the Article III (6) time bar was found to apply, and therefore the appellant was found not to be liable to Monjasa. In a contrasting separate case, Mediterranean Shipping Company SA v Trafigura Beheer BV where a fraudulent bill of lading had been presented and the cargo had been discharged into a warehouse, Aikens J found that in accordance with the circumstances, the Hague/Hague-Visby Rules did not apply to the period after discharge and liability was not limited by clause 22 within the bill of lading. Longmore LJ found that the expression of views within the case was obiter. 

Reed Smith LLP, who represented the defendants within The Giant Ace, have identified that the outcome of the case, identifying that Article III (6) was applicable in relation to claim of mis-delivery of cargo established a precedent within English law.

Overview of The Hague-Visby Rules

Prior to World War I (WWI), shipowners had established a dominant position enabling them to issue widely drafted exclusion clauses on bill of lading issued to merchant shippers. After WWI, international governments sought to redress the imbalance through the 1924 Brussels Convention. The 1924 International Convention for the Unification of Certain Rules of Law relating to Bills of Lading (‘Hague Rules’) addressed the minimal obligations of the carrier in Article III and identified contractual defences in Article IV. 

The 1968 Brussels Protocol introduced the Hague-Visby Rules as an amendment to the Hague Rules. Around ninety countries have ratified either the Hague or the Hague-Visby Rules. The United Kingdom has given statutory effect to the Hague-Visby Rules as a schedule to the 1971 Carriage of Goods by Sea Act. The Hague/Hague-Visby Rules apply mandatorily when a bill of lading is issued in a contracting state; when the carriage departs from a contracting state; they may also apply voluntarily by including a ‘clause paramount’ in a bill of lading. Article III (6) of the Hague-Visby Rules protects the carrier and enables it to close its liability following one year after delivery of the goods. 

Article III (6) of the Hague-Visby Rules identifies that “Subject to paragraph 6bis the carrier and the ship shall in any event be discharged from all liability whatsoever in respect of the goods, unless suit is brought within one year of their delivery or of the date when they should have been delivered.”

Article III, (6bis) identifies that an action for indemnity may be brought outside of the one-year time barred stipulation, providing that it is within the time-period enabled by the national law of the jurisdiction. In England, “the time allowed shall be not less than three months” whereby a claim must be presented against the carrier then subsequently settled by the third party who has indemnified the carrier or “has been served with the process in action.” Article III (6bis) may only be exercised if the claim against the carrier is brought within one year of the event.

Implications for the trade finance sector

The decision in The Giant Ace clarified that the bank would not be able to present a claim in tort against the carrier outside of the scope of the Hague-Visby Rules, and the annual time bar. This is on the basis that the application of the Hague-Visby Rules intends to achieve uniform finality, whereby the carrier may close its accounts or books related to the trade after one year. The implications for the trade finance sector are to scrutinise the date of delivery in accordance with the bills of lading held as security for finance. Even where they may assume that the cargo is being held in a warehouse operated or leased by the carrier following discharge, the consideration of the one-year time limit should play an influential role in reliance on the bill of lading. Furthermore, in consideration of Unicredit Bank A.G. v Euronav N.V. trade finance institutions should maintain awareness that if they are aware that the cargo has been delivered against a letter of indemnity presented by their client, this may be considered as implied approval. The initial judgement in Unicredit Bank A.G. v Euronav N.V.  found that the bank did not obtain rights of suit as the bill acted as a mere receipt. However, the Court of Appeal overturned this aspect of the judgement, identifying that it became a negotiable document upon indorsement. 

Trade financiers Unicredit were not entitled to present a claim for mis-delivery against the carrier in accordance with the Hague-Visby Rules as it was found that the bank had implicitly approved the practice of delivering the cargo to the order of the charterer without the presentation of the original bill of lading. 

A question presented within The Giant Ace in an appeal made to the Supreme Court addressed whether clause 2 (c) of the Congenbill 1994 – echoed within the Olympic’s Congenbill 2022 would disapply the application of the Hague-Visby Rules in the event of a mis-delivery following discharge of the cargo. The argument was disregarded by Lord Hamblen, on the basis that it would be counterintuitive to rely on a clause intended to protect the carrier, in order to increase the carrier’s liability.

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The decision is relevant to companies that use trade finance facilities, trade finance banks, charterers and shipowners. In conclusion, as reflected by Reed Smith LLP who defended KCH Shipping, it is recommended that trade finance institutions diarise the one-year period following the intended date of delivery of any transaction that is financed through the pledged security of a bill of lading. Traders and charterers that issue a letter of indemnity against the discharge of the cargo benefit from the clarity that if a claim is not presented following one year after discharge, any subsequent claim is unlikely to be successful.

The judgment of the English High Court issued on 17 November 2024 is available online.

This article was originally published on LinkedIn, here.

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At their event, ‘Re-imagining the future of trade,’ ICC UK unveiled their roadmap to digitalise UK trade. The document provides a framework for businesses and the government, from where to start to allocating responsibilities.

The strategy, unveiled at the event, includes a commitment to ensuring that more than half of global trade will be governed by laws recognising electronic trade documents by the end of 2025.

Five critical priorities signal a radical departure from traditional trade practices: these include tackling trade frictions, promoting legal integrity, enabling climate action, accelerating digital transformation, and enhancing multilateral cooperation.

The UK’s 2023 Electronic Trade Documents Act (ETDA) made it the first G7 country to remove legal barriers to trade digitalisation; the roadmap highlights how a better advantage could be taken of this position. In this, it invites the government to support the ICC/C4DTI-Barclays-DBT Trade Digitalisation Taskforce in establishing a regulatory sandbox environment.

Jaya Vohra, Barclays Co-Chair of the Trade Digitalisation Taskforce, said, “Trade involves both the public and private sector, so collaboration across industry and with governments is the most effective way to make progress. 

“The Trade Digitalisation Taskforce is an excellent example of such a forum in action. It brings together international institutions, government, and industry associations to solve practical problems such as promoting smart regulatory frameworks, preventing fraud, digitalising trade and streamlining Know Your Customer (KYC) processes.”

Additionally, the Commonwealth Working Group on Legal Reform and Digitalisation is the largest implementation programme within the Commonwealth and the only example of delivering at speed and scale across a bloc—with 56 countries collaborating to develop tailored roadmaps. In this context, the UK roadmap is an important lynchpin in a much wider ecosystem, placed as a template for others. 

Vashti Maharaj, Adviser, Digital Trade Policy for the Commonwealth, said, “The diverse Commonwealth network of 56 countries comprises 33 out of the world’s 42 small states, of which 25 are small island developing states (SIDS), as well as 12 least developed countries (LDCs). How do we bring everybody up to speed, and how do we ensure people can increase their capabilities? 

“Our Commonwealth Working Group on Legal Reform and Digitalisation aims to create a common basis, not just for legal reform but also for common understanding, within which countries can pursue digital transformation based on their own needs.”

Key initiatives proposed include a fully digitalised case management system for international arbitration by early 2025, the establishment of a hearing centre in Paris, and the development of innovative “ICC EcoTerms” to facilitate environmental trade.

The roadmap also addresses the needs of micro, small, and medium-sized enterprises (MSMEs), promising increased support and tools. Enabling smaller businesses to create trade documents that are compatible with the ecosystem would allow people to automate processes, authenticate documents and companies, and thereby speed processing times. 

Finally, the roadmap pledges to drive policy reforms that remove barriers to climate and sustainability solutions while simultaneously pushing for reforms to the World Trade Organization’s dispute settlement mechanisms.

By prioritising interoperable data standards and digital trade corridors, the future of trade will likely only grow more agile, sustainable, and resilient.

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British International Investment (BII), the UK’s development finance institution and impact investor, will unveil new investments and partnerships at COP29 this week to mobilise private capital into climate finance.

Private investors collectively manage trillions of dollars in assets. BII has been working to encourage them to commit more capital to climate finance projects in emerging economies.

Private investors have historically been reluctant due to perceived risks such as local currency volatility, political instability, and regulatory challenges.

However, recent data from the International Finance Corporation (IFC) and European Investment Bank (EIB) shows that default rates in emerging markets are much lower than commonly believed. Additionally, development finance institutions (DFIs) like BII are uniquely positioned to partner with private investors and de-risk these types of investments.

The deals and initiatives BII plans to announce include a groundbreaking investment in India’s renewable power sector, made jointly with DFIs and a major private investor, a significant milestone in a landmark mobilisation initiative for Asia, created through collaboration between DFIs and private investors, and the launch of a blended finance facility in West Africa aimed at unlocking local currency financing from private investors for renewable projects like mini-grids.

“BII and other DFIs are innovating to generate opportunities for private institutions; to de-risk investments so that capital is allocated to where it is needed most,” said Leslie Maasdorp, Chief Executive Designate at BII. “Private investors, our doors are open. Speak to us. Explore the opportunities that DFIs can bring to your door. Interrogate the risks that we can help to mitigate.”

The announcements come as the UN Conference on Trade and Development estimates that developing economies need between $3.3 trillion and $4.5 trillion in annual investment to meet their Sustainable Development Goals. However, there is currently an annual financing gap of some $2.5 trillion. 

Private capital will need to provide more than half of the up to $600 billion per year required to finance the green transition, with support from MDBs, DFIs, and other financial institutions.

The post BII to unlock private capital, announced at COP29 appeared first on Trade Finance Global.

On 4 November, Standard Chartered and British International Investment (BII), the UK’s development finance institution, announced the signing of a $350 million risk participation agreement to support emerging markets in Africa and South Asia.

The two institutions have been working together since 2013 when they signed a $75 million risk participation agreement that was extended to reach almost $400 million in total in the 11 years since. 

The agreement then facilitated over $10 billion in trade across Africa and South Asia. Kenya, Tanzania, Nigeria, Bangladesh, Pakistan, and Nepal were among some of the countries that could access sources of investment that would otherwise have remained out of reach.

Initially, funding was intended to facilitate the vital flow of essentials, including food and healthcare. The renewed facility will help small and medium enterprises (SMEs) and corporations in the region access trade finance, which should increase their export capabilities and boost growth. 

The renewal will also allow new countries to gain access to trade finance and expand even more industries, from healthcare to technology to infrastructure. 

The trade finance gap is widest in emerging economies, with SMEs bearing the brunt of the issue: 45% of banks’ rejected applications for trade finance are to SMEs, a figure far higher than the proportion of SME requests. In West Africa, over a quarter of all applications for trade finance are rejected; even when they are not, premiums are up to 10 times higher than in developed countries. 

In these regions, trade finance is considered a riskier investment and often avoided by mainstream institutions. Even when trade finance does reach these countries, SMEs often struggle to access it, as they lack information about available instruments or are seen as too risky: 17% of all rejections in 2023 were due to insufficient collateral, an issue faced by many SMEs with thin margins who are looking for financing. 

According to Saif Malik, Head of Banking & Coverage, UK, at Standard Chartered, the collaboration between Standard Chartered and BII is set to “connect the world’s most dynamic markets in trade, investment and capital flows”.

Anneliese Dodds, the UK’s Development Minister, welcomed the partnership for its support towards delivering critical products to support SMEs and corporates. “Trade plays an important role in economic transformation, and this facility demonstrates how BII can work with financial institutions to support our shared development objectives”. 

The post Standard Chartered and BII sign $350m trade finance facility for emerging markets appeared first on Trade Finance Global.

This is one of the most consequential US elections in history, which has been mainly determined by what’s at stake in an ideological or geopolitical domain.

But we at TFG think it’s essential to fully explore what Donald Trump’s second presidential victory may mean for the world of trade, treasury, and payments. It’s with this regard that President Trump can redefine the world.

We recorded an emergency livestream with four industry heavyweights:

◾ Dr Rebecca Harding, Independent Trade Economist, REBECCANOMICS LIMITED
◾ Dr Robert Besseling, CEO, PANGEA-RISK
◾ Simon Evenett, Professor of Geopolitics & Strategy, IMD Business School, Co-Chair, World Economic Forum Global Future Council on Trade & Investment
◾ Dr Alisa DiCaprio, Former Chief Economist, R3

What was covered:

• How Trump’s trade policy differs from Biden’s (if at all).
• US-China trade relations and economic wargaming – how increasing tariffs on 818 categories of Chinese goods impacts 2025 policy.
• How a second Trump presidency could impact trade relations between the US and Africa and the Middle East.
• What does the decline of multilateral trade agreements mean for ongoing negotiations and existing trade pacts (think: withdrawal from the Trans-Pacific Partnership and replacing NAFTA with the USMCA agreement)?
• Money markets: with US stocks surging and European renewable stocks falling, how Trump’s stance on climate change and energy policy might impact global commodity markets and trade flows.
• What we can expect Trump’s impact to be, on trade and SCF.
• What regions are likely to be singled out from a more combative trade policy, and what methods there are for assessing and monitoring as the effects of Trump become realised.
• The impact of protectionist trade on currency markets and international capital flows.

The post TFG hosts emergency broadcast: Global trade according to President Trump appeared first on Trade Finance Global.