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FCIreverse – Access local legal support

Mar 22, 2019

In the upcoming weeks, we will be publishing a series of articles explaining the reasons to join FCIreverse and the range of benefits for financial institutions, buyers and suppliers – This week’s article focuses on FCIreverse’s access to local legal support.

Access local legal support

In order to succeed, a supply chain finance programme needs to onboard enough suppliers to achieve the buyer’s goals. But legal considerations can hinder the onboarding process – particularly when suppliers are located in overseas markets:

  • Local legal requirements – Before they can discount invoices, suppliers will need to sign up to a supplier agreement or RPA with the financial institution. However, different jurisdictions will have different local legal requirements for such agreements.
  • Legal opinions – In some cases, banks may need to seek a legal opinion before they can onboard suppliers in specific markets, bringing additional complexity and costs for the funder.
  • Documentation language – Likewise, language can present a significant barrier to the supplier onboarding process, with suppliers requesting documentation in their local language. While this is not insurmountable, providing local language documentation has further cost implications.

The good news is that FCIreverse’s network model can overcome these hurdles by:

  • Providing global access through the proven FCI interface for FCI members –  Many FCI members will already have inter-factor agreements in place with other members – meaning there’s no need for multiple legal agreements.
  • Producing supplier agreements under local law – FCI’s network model means that local FCI members can provide suppliers with documentation based on local law.
  • Producing supplier agreements in local language – Likewise, correspondents may be able to provide documentation in local language, making it easier for suppliers to sign up to the programme.

In this way, the network model used by FCIreverse can improve onboarding rates – and consequently boost the impact of the overall programme.

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