Dubai: UAE Trade Connect (UTC), a blockchain-based trade finance platform ,to counter the risk of double financing and fraud across the United Arab Emirates.
This programme is made with the intent of stamping out fraud and financial crime risks such as duplicate- or under- invoicing. The aim of UAE Trade Connect is to cut down under-invoicing initially and then take on money laundering.
The ‘UAE Trade Connect’ brings together telecom giant Etisalat and a consortium of seven leading local banks, led by FAB (First Abu Dhabi Bank).
UTC allows banks to send invoice information into a private permissioned blockchain network through a node on the blockchain. This information is the run through Etisalat’s fraud detection system. which uses to check invoice data against other invoices and external sources for the duplication and fraud.
On 19th April 2021 , this system went live after six months of trials. The project overall took two years from concept to actual delivery. The UAE Central Bank’s fintech division was also a member of the committee that oversaw the project.
Another four banks are likely to join shortly and Trade Connect will also sync with similar initiatives – such as Marco Polo and Komgo – introduced globally, senior officials added.
“UAE Trade Connect will be a game changer for the trade finance space,” said Zulqarnain Javaid at Etisalat.
Now the platform is primarily into fraud detection within the trade finance space, but the promoters expect it to evolve into handling trade-based money laundering or sanctions busting. And at a later date, get into e-invoicing.
“But e-invoicing will need us to work with multiple partners,” said Javaid. And in time, the UAE Trade Connect can go to handle bills of lading, letters of credit and bank guarantees, which will involve working with ports, customs authorities and governments, the Etisalat official added.