The Mission-Critical Role of Central Banks for the Adoption of the Data Standard for Legal Entities — the LEI — for Cross-Border Payments and Trade Finance and Statistics

This article is a modified version of a previously published paper covering the data challenges of four international programs for the international supply chains and the mission-critical roles of central banks and trade finance banks to achieve the objectives of these programs: 1) the International Chamber of Commerce (ICC) Digital Standards Initiative (DSI), 2) the Financial Stability Board’s (FSB) G20 Roadmap for Enhancing Cross-border Payments, 3) the United Nations (UN) Strategic Roadmap for the Global initiative on Unique Identifiers for Businesses and 4) the G20-FSB program for the global LEI system. 

It is clarified that for the further digitalization of the business and reporting processes of the international supply chains there is a need of a unique global identifier of businesses — the Legal Entity Identifier, or LEI — for adoption by the public sector (central banks, customs, statistical organizations) and the private sector (exporters and importers and their service providers such as banks). A more comprehensive paper on these challenges is available here.

INTRODUCTION

This article covers the data challenges of the business processes and reporting requirements of/for international supply chains. The international trade between exporters and importers and their service providers such as banks relies on trade documents that include data for the financial part (trade finance, cross-border payments, insurance, reporting) and physical part (transport, customs, etc.). The article includes references to the 36 trade documents of the ICC DSI program, including core data such as for legal entities. The current core data for legal entities for cross-border payments and trade finance are the same for B2B (business-to-business) and/or B2G (business-to-government) purposes but often not yet based on the same technical standard.

The ecosystems of the market participants of the international physical supply chains and of the financial supply chain (cross-border payments, trade finance, etc.) are interconnected via contractual relations supported by paper trade documents, technical networks and data that are not always based on the same technical data standards. This results in ...

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