Trade for Corporates - a practical case study Metsä Finance, Nordea and GlobalTrade Corporation work together to streamline data exchange for export L/Cs from Europe

Trade for Corporates – a practical case study Speaking today: Urs Kern, Senior Market Expert, Trade and Supply Chain, SWIFT Kimmo Helle, Vice-President, Treasury Development, Metsä Group Financial Services Oy Claus Asbjörn Stehr, Head of Trade and Project Finance, Nordea Nick Pachnev, CTO, GlobalTrade Corporation

MT700 SWIFT flows FIN MT798 SWIFT flows FileAct MT798s SWIFT flows FIN MT7xx MT798s Importer’s bank(s) Exporter Exporter’s bank(s) Importer SWIFTNet MT798s Documents 1.Importer sends Application for a Letter of Credit (MT798) to its bank either via FIN or FileAct 2.Importer’s bank’s application extracts the appropriate fields from the MT 798, putting them into an Issue of Letter of Credit (MT700) and sends them to the Exporter’s bank 3.Exporter’s bank’s application forwards the MT700 inside an MT798 to the Exporter as an Advice of Letter of Credit 4.Exporter sends documents via FileAct to its bank (e.g. pre-checking) Trade for Corporates – in theory…

The business requirements of the Metsä Group… Kimmo Helle Vice-President, Treasury Development, Metsä Group Financial Services Oy Trade for Corporates – in practice…

Metsäliitto Group

Metsäliitto: Trade Finance L/C handling Starting point: Handling of export documentation decentralized within Metsäliitto Group –Paper and board at customer service units in the markets –Saw mills at each mill location –Plywood centralized to one location –Pulp centralized to one location –Tissue centralized to one location Trade Finance centralized to Metsä Group Financial Services Export documentation done for around 50 different countries

Metsäliitto: Targets for Trade Finance Centralization One way of doing export documentation –One policy/principles –One process –One system Trade Finance knowledge accumulated to one organisation –Consultation to users –Training of users Focusing to smaller number of business partners (banks) –More straight forward management of relationships –Easier to develop business processes Cost savings

Trade Finance Principles Uniform handling of Documentary Credits and Documentary Collections Uniform handling of Documentary Credits and Documentary Collections means use of common IT system and common set of rules Common IT system For Documentary Credits we use globally a commercial For Documentary Collections we use globally a software supplied by a selected bank Common set of rules System and common principles guide the user to make documentation correctly and in a uniform way in every business unit of the Group

Trade finance process Handling of documentary credits and documentary collections Daily support to business units System support and system development Process ownership Business Units Metsä Finance Metsä Finance Metsä Finance Common principles Trade Finance export documentary credits and documentary collections process responsibilities

Metsäliitto: Electronic L/C handling Issuing-Bank Customer Metsäliitto group Customer Service Center 2) L/C advice SWIFT/MT700 5) Scanned documents checked by Nordea in Global Trade system 7) Original documents with Nordea´s cover letter 1) Opening of Trade SWIFT Alliance Lite Metsä Group Financial Services 4) L/C process managed by CSC 6) Cover letter from Nordea 3) Electronic Advice/MT798 message

Trade for Corporates – in practice… 11 How has Nordea met Metsä Finance’s requirements? Claus Asbjörn Stehr Head of Trade and Project Finance, Nordea

Other key figures Capitalization EUR 30bn Total assets EUR 571bn 36,500 employees Market shares corporate lending Finland:37% Denmark:21% Norway:16% Sweden:14% Customers 700 thousand active corporate customers 10 million household customers of which 7.5 million are in active customer programs Coverage Leading bank in the Nordic & Baltic Sea region 1,400 branches Rating Moody’s: Short: P-1, Long: Aa2 S & P: Short: A-1+, Long: AA- Facts about Nordea

Nordea Trade Finance Largest Nordic Trade Finance service provider –Combined Nordic market share 35-36% –Active participation in local and international ICC Banking Commissions –Member of various trade finance related international working groups Trade Finance units in all Nordic countries, Baltic countries, Poland, Russia, London, New York, Singapore and Shanghai One Operating Model (OOM) for Trade Finance in all Nordea units in order to: –Attract a larger share of the strong underlying business and growth potential –Harmonize and unify all processes in order to increase quality and efficiency Awards: –“Best Trade Finance Bank” by Global Finance 2010 in Denmark and Finland –“Best Trade Bank in Nordics/Baltic’s 2010” by readers of Trade Finance Magazine

SWIFT MT798 pilot programme in Nordea Existing customer expectations for new innovative solutions Willingness to support customer in the process development Drive to pilot MT798 with Metsä Group Financial Services Oy Teamwork with Metsä Group Financial Services Oy, GlobalTrade Corporation and SWIFT is essential for success Opportunity to create value added service In-house built interface from Trade Finance back office system to the SWIFT Trade SWIFT Alliance Lite Metsä Group Financial Services

Opportunities for Nordea with the MT798 Quick and smooth processing without any additional steps Enables easy monitoring of the sent message Safe, authenticated messaging Solution for any local or global customer 16

Trade for Corporates – in practice… 17 How did GTC make it happen? Nick Pachnev CTO, GlobalTrade Corporation

SWIFT for Corporates Export LC

About GlobalTrade Corporation GlobalTrade Corporation (GTC) is a software developer and applications service provider whose product solutions improve the world of trade finance and trade services GTC's technology helps buyers, sellers, traders, and financial institutions communicate faster and more efficiently to free up working capital, realize cost savings, reduce risks and improve monitoring and control Our Clients are: –Corporations that need consolidated access to multiple banks and logistic providers –Banks that require trade finance and trade services software solutions to meet their clients’ needs Our expertise is in multi-bank financial supply chain systems Best Independent Trade Platform/System Provider 2005, 2006, and 2007 by Euromoney’s Trade Finance Magazine 2006 Canada’s 10th Fastest Growing Company by Profit Magazine Full Compliance with the 2010 criteria for the SWIFT Corporates – Trade Finance Label

Clients

Process: Nordea sends MT798 export LC advice or amendment through existing SWIFT interface SWIFT delivers messages to Alliance Lite Autoclient application installed at Metsäliitto Alliance Lite Autoclient saves message into its reception Ucon application transfers Export LC messages from the Lite reception directory server over authenticated and encrypted Internet system allocates messages to various Metsäliitto business units Metsäliitto employees process the messages system using web-browser Export LC advice through SWIFT

Solution Components & Setup Alliance Lite is a desktop SWIFT application offering SWIFT connectivity to new low volume users through the Internet. The application is installed Ucon is a desktop application used for transferring files (SWIFT messages, ERP data, trade documents) from corporate internal network to remotely systems through Internet. The application is installed Export LC System is a web-based multi- bank corporate solution for managing of Export LCs and preparation of documents. The solution can be installed internally or hosted externally. Export LC System is part Platform that also has solutions for Import LCs, Bank Guarantees, Standbys and Documentary Trade SWIFT Alliance Lite Metsä Group Financial Services

Contact Information Nick Pachnev W: M: For more information please visit: GlobalTrade Corporation 2727 Steeles Ave. West, 4th Floor Toronto, ON, Canada, M3J 3G9 Tel: Fax:

Next steps: Enhance use of the MT798 for acceptance of documents, discrepancies and payment Extend the use of SWIFT to Cash Management Roll out present functionality to other customers using SWIFT and MT798 - harvest on the deliveries Add further functionality to the existing solution e.g. make it an integral part of a supply chain offering concept Respond to Metsä’s request on enhanced use Use the SWIFT FileAct service for pre-checking of documents Roll out MT798 messaging to existing and new GlobalTrade clients Complete implementation of new message flows Trade for Corporates – in practice…

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