CfInsurance of a Medium and Long Term Export Supplier Credit Financed by a Bank against the Risk of Non Payment

The export supplier's credit financed by the bank is the credit provided by the exporter to the importer (foreign entity) in the form of deferral of payment for the delivered goods or services (export claim), bought from the exporter subsequently by the bank without possibility of retroactive sanction. The insurance terms and conditions shall follow the rules of OECD Consensus (Arrangement on Officially Supported Export Credits).

The maturity of the middle-term and long-term export supplier's credit is longer than 2 years and the importer shall pay in advance (advance payment) minimally 15 % of the total export value (price agreed in the export contract).

According to the rules set by OECD, the insured export is subject to evaluation of its influence on the life and social environment. In some selected cases Export Guarantee and Insurance Corporation a.s. (EGAP) may require from the exporter an expert's opinion on the export influence on the environment in importer´s country and the insured undertakes to oblige contractually the exporter to carry out the associated duties.

The insured entity is bank against the risk that the importer does not pay properly the whole owing sum, i.e. the price for the delivered goods and services (export claim) in the due date. The insurance policy shall be signed also by the exporter acknowledging all his obligations following from the insurance policy, especially to assure a proper performance of export contract.

The subject of insurance are export claims, i.e. claims of the insured towards the importer, from export supplier's credit i.e. claims for payment of obligations following from export contract (payment for delivered goods and services) specified in the insurance policy. The documents proving the occurrence of insured export claim and proper performance of exporter's obligations from the export contract towards the importer, which will be accepted by the insured, are set in the insurance policy.

The insured event is a partial or complete non-payment of the insured export claim due to commercial or territorial reasons or their combination. Commercial reasons are: general importer's incapacity to pay his due obligations (financial insolvency) or rejection of payment without legal reason (unwillingness to pay). Among territorial reasons are e.g. administrative decisions or legislative measures of importer´s country hindering him to pay or limitation of conversion of payments due to political events in importer´s country, as well as other events in importer´s country, as war, revolutions, civil commotions and natural catastrophes.

The amount of premium depends on the export volume, agreed payment terms and conditions, way of payment reinsurance, evaluation of character and risk rating of importer, evaluation of risk exposure of the country or territories associated with the performance of export contract and on the deductible amount. The agreed amount of premium includes already the possible increase or decrease of risk insured and is unchangeable for the whole term of insurance duration.

The preliminary premium calculation is available through interactive calculator.

• maximum credit amount is 85 % of the total export value1
• the share of value of supplies with the origin in the Czech Republic in the export value – rules you can find here,
• the share of Local Costs does not exceed 40% of the Export Contract Value for category I countries, and 50% of the Export Contract Value for category II countries2,
• trouble-free credit history3 of subjects4,
• evaluation of export influence on the life and social environment and non-applying international sanctions
• the subject4 has existed and executed the activity being the subject of export minimally for 2 years before submitting the application for insurance of middle-term and long-term export supplier's credit financed by the bank against the risk of non-payment or its activity follows up his legal predecessor's activity, carried out minimally for 2 years before submitting the application for insurance of middle-term and long-term export supplier's credit financed by the bank.