A proposition on a use case for XBRL / Blockchain in Automation of International Trade Documentation.
Problem Statement :
At present, Business Enterprises (including those engaged in International Trade) & Regulators thereof receive and send Transaction Documents – in closed formats – thus involve manual extraction & re-keying – in the recipient’s Accounting Package / ERP.
The proposition is to TRANSFORM this into a Scenario where the Accounting Package / ERP of the participant sends and receives these Transaction Documents and also intelligently deciphers / decodes these Transaction Documents to be put to meaningful use without manual extraction or re-keying by every user of the Documents.
As we all know in International Trade**, starting from the Buyer’s Purchase Order – a series of financial documents are generated along the entire Value Chain by the Exporter, Logistics & Shipping Agencies, Bankers & Foreign Exchange Compliance Authorities, Customs Authorities, etc, and the genesis of all these documents is the Buyer’s Purchase Order and bits and pieces of business information are manually extracted, re-keyed with or without additional pieces of business information and transmitted for onward use.
In this regard, electronic recording and transmission of various documents created / transmitted in International Merchandise Trade, traversing multiple entities and national jurisdictions poses both an exciting opportunity and a formidable challenge.
Key Technologies that can be utilised for this :
1. XBRL GL* – for Standardisation / Data Structure of Transaction Documents issued by various Participants in International Trade.
2. Blockchain – Development & increased adoption of Blockchain based Distributed Ledger can provide for a Registry of Smart Contracts and Documentation of International Trade.
3. International Trade – Payments, Settlement and Financing Solutions can be built on SWIFT Messaging / ISO 20022 Standard.
4. UNCITRAL Model Law on Electronic Transferable Records (MLETR) has been adopted in 2017 for providing a global framework Legislation to be adopted globally for Electronic Transferable Records such as Bills of Lading.
5. Harmonised System of Classification and Nomenclature for Goods (HSN) has been developed by World Customs Organisation (WCO) and adopted by large number of national jurisdictions for International Trade & Customs declarations.
and possibly a host of other exciting technologies and solutions one can think of.
* GIFworks.io – Global Interoperatibility Framework (GIF) Working Group has proposed the use of a non-XBRL standard.
** The Total Value of International Trade in CY 2019 is estimated at USD 6 Trillion by UNCTAD.
1. Accounting Automation & IOT https://canirmalg.com/2016/08/06/digital-collaborative-accounting/
2. XBRL GL in International Trade https://canirmalg.com/2013/08/14/xbrlglinternationaltrade/