- The Washington Times - Wednesday, June 13, 2001

A Silver Spring, Md., company has made a major deal with one of the world's largest banks to provide software that helps companies navigate the bureaucratic hassles of international trade.

NextLinx Corp., a privately held software developer, announced yesterday that it had reached a pact with ABN AMRO, an Amsterdam bank, to incorporate its software into ABN's Internet-based platform for extending credit to importers and exporters.

Though international trade has exploded since the end of the Cold War, shipping goods across borders remains a complicated process, even with an ever-expanding web of free-trade agreements.

Companies must follow complex regulations that guide what can be exported or imported, what taxes and tariffs must be paid, and how the paperwork must look, putting the global economy out of reach for smaller firms in particular.

"Anyone who wants to do international trade has to figure this stuff out," said Rajiv Uppal, NextLinx's chief executive officer.

The core of NextLinx's business is a proprietary 100 gigabyte database that contains regulations from more than 100 countries on rules and regulations for international trade. Those include export and import controls and tariff rates.

Every country in the world has about 19,000 different categories according to which tariffs are applied.

Shipping a toothbrush to Argentina, for example, could involve paying five different taxes, in addition to arranging for transportation and financing, Mr. Uppal said. In contrast, a company might be able to export to Singapore duty-free.

Companies typically navigate this morass by contracting with local customs brokers who know the territory and can prepare the paperwork.

NextLinx has carved out its niche by offering this information to very large multinationals, such as Cisco Systems Inc., Boeing Co., 3Com Corp. and Qualcomm Inc., and to progressively smaller companies. The main business of ABN AMRO, a bank with $500 billion in assets that operates in 70 countries, is providing letters of credit to exporting companies, especially in Asia.

Letters of credit, a financial instrument largely unknown outside the world of international trade, provide a guarantee to an exporter, usually a smaller company, that a large customer in another country will pay for received goods.

NextLinx's software will now be incorporated into ABN's Internet platform, which allows both exporters and importers to access the information they need to complete an international transaction. ABN, then, will provide financing.

"It takes us far beyond what we have done to date," said Marta Dapena-Baron, a group vice president and global head of electronic commerce.

ABN has traditionally provided advisory services only informally.

NextLinx already has deals with other companies that play a role in international trade and are looking for ways to make it easier. Package delivery giants FedEx Corp. and United Parcel Service Inc. both have invested in NextLinx and sit on its board.

To the extent that FedEx and UPS can help lower the threshold for international transactions, the demand for their services will rise, Mr. Uppal noted.

The deal with ABN AMRO will boost the annual revenue of NextLinx, projected to be about $21 million this year, by 7 percent. NextLinx will also get a cut of the transactions that are completed using ABN's Web site.

NextLinx is a privately held company but will be in the position to go public by the first or second quarter of next year, Mr. Uppal said. In addition to FedEx and UPS, the company has also attracted funding from AT&T; Ventures and the Kappa-IT Fund, a German venture capital firm.

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