Project

A. General Information

1. Title

Japan-Vietnam electronic import Letter of Credit Pilot

2. Status of the project
Pilot
3. Implementation period of the project/service:
From
2024
To
--
5. Geographical coverage
Bilateral
Participating countries: Japan, Viet Nam
Hub Point: Japan
6. Participating agencies/entities of the project/service:
a. Development stage
Lead agencies/entities
FPT IS, FPT Japan Holdings, TradeWaltz
Other participating agencies/entities
--
b. Operational stage
Lead agencies/entities (op)
FPT IS, FPT Japan Holdings, TradeWaltz
Other participating agencies/entities (op)
Sojitz Corporation, Mizuho Bank
7. Main stakeholders/beneficiaries of the project
Traders (big enterprises)
Traders (SMEs)
8. Business process category of the project
Commercial Transactions

B. Lessons Learned

9. Summary description of the project/service
Brief Summary

FPI IS, FPT Japan Holdings, and TradeWaltz (Japan) conducted a proof-of-concept integrating TradeFlat as the first digital finance ecosystem in Viet Nam and TradeWaltz - Japan's leading trade information platform. The chosen document for this pilot was an import Letter of Credit (L/C).


 

a. Objective(s)

Promote trade between the two countries and international trade and proof of concept.

b. Business need for the project (background)

Vietnam has had a long and close relationship with Japan in terms of trade and trade digitization. TradeWaltz Inc‘s platform was used for transactions with letters of credit using Mitsubishi Corporation Plastics’ Vietnamese commercial distribution within the support projects related to the diversification of supply chains of the Ministry of Economy, Trade and Industry (METI). From this background, then METI Minister Kajiyama and H.E. Mr. Tran Tuan Anh, Minister of Industry and Trade have conversed about the efficiency of Japan-Vietnam trade procedures on the trade platform, which was incorporated in the joint ministerial statement.

c. Business process covered*

Trade finance

d. Overall architecture and functionalities*

The L/C issuance process includes following steps: (1) The importer in Vietnam creates a Purchase Order (PO) on TradeFlat and sends it to TradeWaltz for submission of the exporter in Japan; (2) The sales contract (COS) signed by both the importer and exporter is successfully uploaded on TradeFlat and TradeWaltz, while the importer in Vietnam digitally signs right on TradeFlat; (3) Import L/C requested by the importer to be issued and issued by the issuing bank in Vietnam right on TradeFlat and successfully sent to the advising bank in Japan for downloading and advice to the exporter on TradeWaltz; (4) When the L/C is issued, the exporter in Japan presents a set of shipping documents including Commercial Invoice (IV), Packing List (PL) and Bill of Lading (BL) on TradeFlat and for the Presenting Bank (5) The Presenting Bank presents those documents to the Issuing Bank to carry out the process of checking documents and accepting payment according to the Document Set (6) The Issuing Bank and Presenting Bank update the payment status of the L/C on TradeFlat.

e. Relevant document/figure
--
10. Documents and data exchanged via the project

Letter of credit

11. Data models/databases, proprietary solutions, hybrid approaches
--
12. Main challenges faced during the project
--
13. Lessons learned from the project

The PoC trial run received positive feedback from participating enterprises and banks. The system highly simplifies L/C issuance, optimizes the presentation of electronic documents, enables it to be performed entirely on a digital platform, and shortens processing time as well as controls information of the transaction compared to the traditional L/C flow. From there, the parties aim for the common goal of promoting trade not only between Viet Nam and Japan but also internationally.

14. Main benefit(s) of the project
Transaction Time savings
14A. Elaborations/detailed description on benefits gained
--
15. Technical/financial/capacity building/other assistance
--
16. Future plan for expansion of the project
--
17. Other information or relevant references on the project

The chosen document for this pilot was an import Letter of Credit (L/C). As a result, the total cross-border transaction time decreased from 7-10 days for traditional L/C flow down to 171 minutes in the first test and to 76 minutes and 91 minutes for Deferred L/C and L/C at sight and in the last test (3rd time) correspondingly.

18. Relevant document regarding the project
--

C. Relevant Standards

20. Electronic message standard
20A. Electronic message standard supporting the project
--
20B. Type of standard for electronic message applied for the project
--
21. Technical communication standard
21A. Technical communication standard supporting the project
--
21B. Type of technical communication standard applied for the project
--
22. Security-related standards*
22A. Security-related standard supporting the project
--
22B. Type of security-related standard applied for the project
--
23. Other Technical Information
23A. Interface developed for data exchange with an internal system
--
23B. Other technical implementation information
--