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Tag: clearing

  • Deutsche Bank Pioneers as First European Institution to Secure Renminbi Clearing License

    Deutsche Bank Pioneers as First European Institution to Secure Renminbi Clearing License

    The city of Frankfurt has just received a significant boost as a financial hub. Deutsche Bank, a prominent financial institution based in Frankfurt, has successfully become the first European bank appointed to serve as a renminbi clearing bank by the People’s Bank of China. This news was confirmed through an official statement on Monday.

    The provision of clearing services in Frankfurt will offer financial establishments and firms a direct, fast channel for processing, clearing, and settling cross-border transactions involving the renminbi. This move is anticipated to reinforce the financial ties between Europe and China.

    Deutsche Bank’s Role as a Clearing Bank

    Alexander von zur Mühlen, CEO for Asia Pacific, Europe, Middle East & Africa and Germany at Deutsche Bank, weighed in on the matter. He believes that their new role as a renminbi clearing partner in Europe deepens Deutsche Bank’s position as a globally recognized clearing bank. This commitment also reaffirms the bank’s long-standing dedication to the internationalization of the renminbi. Mühlen is optimistic that this development will bolster the financial connectivity between China and Europe. This will help Deutsche Bank to better serve its clients’ cross-border trade and investment activities.

    Even though renminbi clearing services were accessible in Europe prior to this, they were only offered through branches of Chinese banks.

    Renminbi Hub: A Shift from Competition to Normalcy

    Over a decade ago, the concept of establishing a renminbi hub in Europe was a contentious issue that incited competition among Europe’s financial centers. In Switzerland, the establishment of a renminbi hub emerged as a crucial prestige project for the nation’s banking industry.

    China Construction Bank (CCB) earned a banking license from the Swiss Financial Market Supervisory Authority in October 2015. When CCB’s Zurich branch launched in January 2016, it was attended by several notable representatives from the Swiss financial center and public authorities. Since then, CCB has been in charge of renminbi clearing in Switzerland.

    As of January 2021, CCB had processed transactions totalling nearly 600 billion francs. A total of 13 Swiss partner banks were reported to be participating in the hub. Currently, Zurich represents a key center within the offshore renminbi ecosystem.

    It remains unclear if a Swiss bank will pursue clearing status, however, UBS and Zürcher Kantonalbank could potentially be the only viable candidates.

    Questions & Answers

    What is the significance of Deutsche Bank’s new role as a renminbi clearing bank?
    This development strengthens Deutsche Bank’s position as a globally recognized clearing bank. It will enhance financial connectivity between China and Europe.

    What is the history of renminbi clearing in Europe?
    Renminbi clearing services were available in Europe previously, but only through branches of Chinese banks.

    What is the status of the renminbi hub in Switzerland?
    Currently, Zurich represents a key center within the offshore renminbi ecosystem, with China Construction Bank handling renminbi clearing in Switzerland since 2016.

  • Vietnam vows to cut down the time for customs clearance

    Vietnam vows to cut down the time for customs clearance

    According to the World Bank, Viet Nam’s commercial transactions across borders index, a measurement of time and cost in import and export activities, has fallen for two consecutive years (2014-2015) due to inadequate management.

    A study conducted by the Viet Nam Chamber of Commerce and Industry and the General Department of Viet Nam Customs showed that the total time for customs clearance takes about 28 per cent of the time while the other 72 per cent is spent on other procedures and management including specialised checks on imports and exports.

    These are indications that specialised management for imports and exports has prolonged the time for customs clearance and increased costs for enterprises.

    In your opinion, what are the main causes then?

    The first thing I should mention is cumbersome legal documents on customs checks. In addition, many goods have no data provided on them for commercial transactions across borders index.

    Coupled with that is that most specialised checks are done by hand or the application of modern information technology to dossiers classification or information exchange between Vietnamese government agencies.

    What is the key reason for increasing the time for customs clearance for specialised checks in our country four times slower than that of other country?

    Before 2016, in our country about 30-35 per cent of goods had to go through specialised checks at customs while in other countries, the rate was just from 5-8 per cent. That is one of the reasons why Resolution 19/2016 has laid emphasis on improving the business environment and national competitive capacity.

    The government’s resolution sets specific targets for each year. For example by the end of last year (2016) only 15 per cent of specialised goods should have been checked and eight per cent by 2020.

    To achieve these targets, it is imperative for the customs sector to make a change in their management methods and in their specialised checks. To achieve these targets, the customs office must practice risk assessments and common international customs clearance procedures, including using IT in information sharing between concerned agencies and the customs office.

    To shorten the customs clearance time, many countries perform customs checking in factories. Can we do that in Viet Nam?

    Checking goods right at factories is common in many countries now.

    With this method, instead of checking the goods at the border gate, representatives of the importing countries go to exporting countries and check the goods in the factories. After finishing their checks on the goods quality, pattern, production chains and more, if they meet required standards, the goods will be certified to go through customs procedures.

    Of course, some international practice and norms will be applied, including risk assessment. However, for imported goods coming from countries with higher standards than ours like the US, EU, Japan or South Korea they will enjoy special treatment when they go through customs. Vice versa, for countries that have often encroached upon our laws, they will be subject to tight checks.

    The PM has set a target that by 2020, all import and export goods must not take more than five days to go through customs clearance. Is this feasible?

    If Government Resolution 19/2017 is implemented, by late 2017 customs clearance will take on average 160 hours. So to achieve the target set by the PM by 2020 for five days (120 hours) customs clearance will be a big challenge.

    To achieve this target, all concerned ministries and sectors have to review and revise 362 legal documents, of which 87 of them have to change in the next few months. Of course, the task is demanding. But we’ll try to do our best to meet the target.

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