| In the longer run the use of EDIFACT messages could bring about important
cost savings for banks and customers. For in a ideal situation it is thought possible that
a customer will in most cases no longer have to report about a cross-border receipt. This
assumes that its resident bank has all the necessary BOP information, which is supplied by
the foreign payor in an EDIFACT message received via SWIFT or another international
network. The customer no longer has to supply this information (via BOPINF) and the
resident bank will pass the information on to the national BOP compiler. In summary, the
home loop would no longer be necessary. |
| However, in order to eliminate the home loop, a harmonized BOP data
collection system has to be in operation and an international network such as SWIFT has to
permit the transmission of the necessary BOP information in its messages. |
| Moreover, in some cases it might still be necessary to check the BOP
information with the customer (for instance, in the case of merchanting trade: a
transaction identified as imports by the foreign payor would in normal cases be exports
for the customer; however, it could also be merchanting exports). |
| More in general, data confidentiality rules might at the moment not allow
the sending of individual transaction data to third parties, which is necessary for
eliminating the home loop. Legal regulations in a number of countries provide that BOP
information supplied can only be used for national purposes. Therefore, customers cannot
be obliged to pass on BOP information to other countries. Unless a customer allows
information to be passed on a voluntary basis, the internationally exchanged EDIFACT
message does not contain all relevant BOP information. In that case the bank in the other
country cannot report directly about the receipt to the BOP compiler, but the foreign
customer still has to report the receipt and supply information about, for instance, the
underlying nature of transactions. To save on the so-called home loop, it would be
necessary that harmonized data secrecy rules are introduced. These rules, which will
probably be developed by the EU should take into account that confidentiality, supported
by sanctions, is essential to the quality of the data. |
| Other aspects to facilitate the exchange of BOP information with other
countries are, among others, the harmonisation of thresholds and codification in the
different countries. |
