ICC Germany and MonetaGo: digitalisation is key to shut fraudsters out of trade
Berlin, New York, 28 September, 2023: The digitalisation of trade and finance systems is set to revolutionise the fight against trade fraud across the globe, a new report from the German chapter of the International Chamber of Commerce, ICC Germany, and financial technology provider MonetaGo, has stated.
To provide the international business community with improved recommendations and practical solutions to reduce the risk of fraud in international trade and to include the perspective of the German financial sector, ICC Germany has partnered with fraud detection and prevention solutions provider MonetaGo. The report, the second edition of Shutting Fraudsters out of Trade, calls for the adoption of the Wolfsberg trade finance principles, implementation of the BAFT Global Trade Industry Council (GTIC) recommendations for the adoption of ecosystem level solutions to combat fraud, and for the consultation of the WTO-ICC Standards Toolkit to further enhance the efficiency of digitizing trade processes. Similarly, the report highlights the need for associations to bring together the financial services community to resolve use cases such as authenticity of trade documents, the adoption of Legal Entity Identifiers (LEIs) and the resolution of duplicate financing, an issue costing the industry billions.
Current trade and finance systems are often manual and paper-based when there is an opportunity to use smart technology solutions. This makes quantifying the impact of fraud hugely challenging, the report warns. However, the scale of savings that could be made are vast. A 2019 note of the Financial Crimes Enforcement Network (FinCEN) advised that vendor impersonation alone cost US businesses US$9bn during the 2016-2019 period, and Bloomberg estimated that the potential losses to banks from trade finance fraud in Singapore from 2014 to 2020 totaled US$9.26bn.
“Outdated systems, insufficient market coordination and the reluctance of governments and regulators to allow banks to share data are all part of the problem in the fight against fraud”, says Oliver Wieck, Secretary General, ICC Germany. “Fighting fraud should be a priority for any government: The impact on economic growth is huge and the technical solutions are available. The same solutions that prevent fraud also help tackle tax evasion. This report calls on businesses and governments to join forces and act now.”
Neil Shonhard, CEO, MonetaGo, adds “Our mission to shut fraudsters out of trade and create a safer, more secure trading environment continues to progress globally. Partnering with ICC Germany is an important step in uniting policymakers and industry to encourage a collaborative effort to take the available steps to de-risk trade finance, both in Germany, in Europe, and around the world.”
Shutting Fraudsters out of Trade: Second Edition, a report from ICC Germany and MonetaGo, is available here.
