Identity Protection

ICC-led program will help UK banks prevent fraudulent trade financing

As industrial action sets the UK into a freeze, efforts were made to unfreeze credit by eliminating redundant trade financing frauds. These are expected to increase lenders' propensity to provide credit.

British banks participate in International Chamber of Commerce (ICC) initiative: International Chamber of Commerce UK with UK banks and trade finance institutions fight "duplicate financing fraud" that costs billions. This comes at a time when firms in the UK are reporting low levels of confidence and clarity over their prospects for securing fresh loans in the face of growing bank reluctance.

Leadership for this effort comes from C4DTI, the Centre for Digital Trade and Innovation. In order to carry out the suggestions laid forth in a whitepaper released in 2022, the ICC UK will convene both banking and non-bank financiers.

New Data Suggest 4 Million Duplicate Financing Scams Blocked So Far

The announcement comes as the Bank of England attempts to curb inflation. Under this programme, ICC UK is collaborating with MonetaGo, a financial technology company that facilitates the Trade Financing Validation Service through the international Swift system and the Trade Finance Registry maintained by Banks Associations in Singapore.

In 2018, MonetaGo launched in India, and since then, it has consistently met all of its users' needs. It has prevented double financing fraud in all forms of trade finance, the business claims, and has processed more than four million operations so far.

In recent times, the commercial finance sector has been rocked by cases of "duplicate financing fraud", where borrowers exploit banks' reluctance to exchange information to get financing for the exact same item twice.

Due to these well-known scandals, such as the practice disclosed by the 2020 failures of Singaporean operators Agritrade, Hin Leong, and Zenrock, banks have sought, sometimes poorly, to reclaim multimillion-dollar damages. Due to this, it is more challenging for smaller enterprises to get enough finance. Some financial institutions that are already struggling have discontinued providing trade financing completely, or have restricted loans to the market sectors that give the greatest rates.

The ICC Trade Register data supports the banks' claims that trade financing is mostly risk-free, but a steady stream of high-profile cases undermines public confidence in the system. For example, the UK's Serious Fraud Office only last week discovered two ex-executives from Balli Steel accused of committing fraud to banks by supplying them with "false shipping documents, false info, and fake documents on fraudulent contracts of sale" to acquire financing, resulting in losses of £124mil.

However, it's possible that these cases are only the tip of the edge, since trade finance fraud is often undetected until a firm cannot pay its bills. Increasing numbers of international institutions are feeling the weight of a dismal global socioeconomic outlook, prompting the ICC UK to take action.

Background on the ICC's anti-fraud campaign

With fewer than one-third of businesses sure about their ability to get credit, Chris Southworth, the general secretary of the ICC UK, claims that the issue has persisted for some time, with this being a good time to address it. Companies are now bearing the brunt of it as they struggle to recover from the crisis.

He acknowledges that financial institutions have made significant efforts to curb trade financing fraud, but notes that these initiatives have been hampered by the present legal framework, which prevents financial institutions from disclosing details about the operations they have funded. Paper trade might be updated with the help of the Electronic Trade Documents Bill, which is expected to pass soon. He believes we can now solve this problem because of advances in technology that were previously unavailable.

MonetaGo's technique circumvents the problem of sharing sensitive information by letting financiers produce electronic footprints of trade papers using a hashing process and then uploading them to the company's safe data vault. Once a financier assigns a status to a document, such as "registered" or "financed", other lenders may use this information to establish whether the operation has already been financed.

However, its usefulness depends on its adoption by prospective purchasers and funding sources for invoicing and purchase orders. To be useful, it must first be used to that purpose.

The ICC UK claims that most UK trade finance institutions are involved in the C4DTI-led campaign to address this problem.

When asked about current solutions that will have a major influence in the near future, Southwared brought up the elimination of duplicate funding fraud as an example. This effort was coordinated with MonetaGo. That we simply lack an answer isn't, in his view, the real issue.

Despite the obvious benefits of our proposed solution, the market is not cooperating enough to make it a reality. A meeting is something we can assist organise. Financial institutions have shown an interest, and we are now legitimising the work plan that will emerge from our informal conversations with them.

In the world of finance, what does "ICC" stand for?

ICICI Bank in Vadodara started as a wholly-owned subsidiary in 1994. The Industrial Credit and Investment Corporation of India Bank was the predecessor to the current name, ICICI Bank. The holding company and the bank merged over time.

So, what exactly does ICC bank do?

It is simpler for firms, particularly SMEs, to get the financing they need to grow, even during a cost-of-living crisis, when they adhere to ICC's internationally recognised rules and principles, which are applicable regardless of the state of the economy.

Banks and other financial institutions aid firms in participating in international trade to enable the smooth and secure transit of goods and services throughout the globe. Small and medium-sized enterprises (SMEs) may not have the funds on hand to advance the cash themselves when importing and exporting costly goods, hence trade finance is very vital for them.

The ICC has published voluntary rules and recommendations to facilitate the availability of funding for enterprises throughout the world in the areas of documentary credits, demand guarantees, forfeiting, bank payment responsibilities, and dispute settlement.

The International Chamber of Commerce (ICC) established this standard to facilitate uniformity in regulatory standards across companies and governments throughout the world without unduly burdening financial institutions with red tape that might prohibit them from financing potential trade transactions.

Exactly what is meant by "double financing", anyway?

When con artists make many purchases using multiple sets of funds, they engage in a fraudulent technique known as "duplicate financing", sometimes regarded as a kind of cloning. Under the current system, a fraudster may visit many financial institutions to get financing for a single transaction without raising suspicion or forcing financial institutions to do a cross-check.

Are victims of fraud in the United Kingdom able to get their money back from banks?

With it unlikely that living costs will change favourably anytime soon, the question of how you store your cash is more important than ever. According to UK law, all money stolen fraudulently from you must be returned by your bank. Within a reasonable amount of time after you report the problem; no later than the close of business the following day.

Bank fraud in the UK: how often is it?

As a result, the number of complaints of fraudulent activity dropped by 7 per cent, to little under 1.4 million. In the first half of 2022, banks prevented fraudulent transactions of £583.9 million, a decrease of 20% from the previous half.

What is the time frame for a bank investigation?

Financial institutions should investigate and compile supporting documentation for any questionable transactions. In accordance with the current regulations, banks have between 30 and 90 days to investigate, respond to, and settle any suspicious financial dealings. The police may be alerted in severe situations of fraud or identity theft.


As low optimism continues regarding the UK’s credit health, MonetaGo CEO Neil Shonhard claims that the Secure Financing system may be used by any bank or non-bank lender in the UK to protect against fraud. That is independent of the booking system, platform, or workflow tools already in use.

Shonhard adds that MonetaGo has developed privacy-protecting technology and made it accessible to lenders to combat double-funding fraud. The International Chamber of Commerce (ICC) UK, the Center for Trade and Development Finance Innovation (C4DTI), and the UK's trade finance community can increase trust in lending by preventing fraudsters from entering the ecosystem, thereby granting more funds to promote trade and boost economic development.

By the close of 2023, they hope to have completed this project. As a result, the UK will be the first G7 economy to implement this policy, potentially freeing up "hundreds of millions of pounds" to be utilised for real commerce.