The ecosystem: banks, inspectors, shippers, insurers and advisers

Trade finance banks

A trading house cannot exist without a bank that finances its cargoes. The typical Lugano trader works with transactional finance: the bank opens documentary credits for purchases, finances the goods while they are in transit or in storage against security over the cargo and the receivables, and is repaid from the proceeds of the sale. Larger traders also use revolving borrowing base facilities, in which the credit line is calculated from the value of inventory and receivables, and pre-export finance for producers. Chapter G.I describes these instruments. Here it is enough to note which banks serve the Lugano cluster. The executive committee of the association includes representatives of UBS Switzerland, the Banque Cantonale Vaudoise, the Zürcher Kantonalbank and BancaStato. The sponsors of its conference in 2026 included Banca Zarattini, Axion SWISS Bank and Cornèr Banca.¹ Large trade finance desks are concentrated in Geneva. The national statistics count 954 persons in the financing of commodity trading as a support activity, the large majority of them in Geneva, against twelve in Ticino.² This geography has practical consequences. A Lugano steel trader often negotiates its credit lines with a team in Geneva or Zurich, while its day-to-day account management may remain with a Lugano branch. Smaller Ticino banks finance smaller transactions and offer accounts, foreign exchange and guarantees, but large transactional facilities require the balance sheet and the specialized risk management of the big banks and of a few cantonal banks. The withdrawal of several banks from commodity finance after the fraud and insolvency cases of 2020 and the sanctions of 2022 has reduced the number of lenders available to smaller traders.³ In February 2022 the general secretary of the association said that banks no longer wanted to finance transactions with Russia and Ukraine, and that the sector had already been strained by margin calls caused by price rises over the previous eighteen months.⁴ Access to trade finance is therefore the main constraint on the growth of the Lugano cluster. The presence of trade finance specialists on the association's committee reflects the importance of this relationship.

Inspection, testing and certification

Inspection companies certify the quantity and quality of goods at loading and discharge, sample and analyse cargoes, supervise warehouses and issue the certificates that banks and buyers require. The best known of them, SGS, has its headquarters in Geneva and traces its history back to grain inspection in the nineteenth century.⁵ The national statistics count 78 persons in inspection and certification as support activities for commodity trading in 2022.⁶ Lugano traders use the international inspection networks at the ports of loading and discharge, where the inspection itself takes place. What the traders need in Lugano is the contractual and documentary knowledge to specify inspection clauses, to read certificates and to handle disputes when a buyer rejects a cargo for quality. In steel trading the mill test certificate issued by the producer under the European standard EN 10204 is supplemented by independent inspection for large cargoes, and disputes over quality are frequently referred to arbitration.⁷

Notes

1. LCTA, "Comitato esecutivo" and "GCC" (above). ↩
2. BFS, Statistik der Rohstoffhändler (NMP) (above), cluster 2022 (financing 954 nationally; Ticino 12). ↩
3. Fraud and insolvency cases of 2020, among them Hin Leong Trading and Agritrade in Singapore and GP Global; see Chapter G.I. ↩
4. Tio.ch, 25 February 2022 (above). ↩
5. SGS SA, company history (founded in 1878 in Rouen as an inspection company for the grain trade; headquarters in Geneva since 1915). ↩
6. BFS, Statistik der Rohstoffhändler (NMP) (above), cluster 2022. ↩
7. European Standard EN 10204:2004, Metallic products – Types of inspection documents. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.