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EnglishDInsurance of an export buyer credit against the risk of non payment
Brief description of the insurance product and contacts
The export buyer credit is a loan granted by a bank to an importer for purchase of goods or services. The bank makes the payment to the exporter on behalf of the importer for deliveries of goods and services (export). The amount owed is consequently paid off by instalments by the importer under terms stipulated in the credit contract. In some cases, the credit recipient and subsequently the debtor is the importer's bank (indirect buyer credit).
The payback period of an export buyer credit is essentially longer than 2 years. Mainly due to the fact that the insurance terms and conditions observe the rules of the OECD Consensus, it is required that the importer pay at least 15% of the export contract value in advance.
Bank is the insured party against the risks of non-payment of the provided export buyer credit under the defined schedule.
The insurance of an export buyer credit may also include insurance of cases of funding of projects, and exceptionally also short-tail buyer credits under conditions stipulated by European Union regulations.
The subject of insurance is the insured party's receivables from the debtor under the export contract, i.e. mainly payment of the credit principal, interest on the credit principal and fees for reserving funds under the credit contract.
The insured event is a partial or complete non-payment of the insured receivable due to commercial or territorial reasons or their combination.
Commercial reasons are: claimed importer's incapacity to pay his due obligations (financial insolvency) or rejection of payment without legal reason (unwillingness to pay).
The premium amount depends on the extent of the risk insured, assessing of the nature and risk level of the export, i.e. in particular the volume of export, the agreed payment terms, the payment guarantee method, assessing of the nature and risk level of the importer, risk assessment of the country or territory associated with performance of the export contract and the term and amount of the funding provided, and the amount of deductible.
Preliminary premium calculation can be done through the interactive calculator.
Ing. Michal Janků, Director of Export Credit and Investment Insurance Department
+420 222 842 354
jankumi@egap.cz
Ing. Štěpán Kolanda, Deputy Director
+420 222 842 321
kolanda@egap.cz
+420 222 842 354
jankumi@egap.cz
Ing. Štěpán Kolanda, Deputy Director
+420 222 842 321
kolanda@egap.cz
Examination cut-off criteria of non-banking entities
Non-banking entities
The basic evaluation criteria in providing insurance of export credit risks which EGAS as the insurer primarily assesses mainly based on information provided by the applicant for insurance, and the fulfilment of which has negative impact on the possibility to provide insurance of export credit risks, are the following:
- The non-banking entity, its direct owners1 and actual owners2, controlled persons on which the non-banking entity is financially dependent or, where applicable, controlled persons with which the non-banking entity constitutes a single risk3, and the country of registered office of the non-banking entity are subject to international sanctions regimes;
- The non-banking entity, its direct owners1 and actual owners2 and/or controlled persons on which the non-banking entity is financially dependent or, where applicable, controlled persons with which the non-banking entity constitutes a single risk3 do not comply with regulations on the prevention of money laundering and terrorist financing;
- The non-banking entity and its direct owners1 or actual owners23 are subject to insolvency proceedings or similar proceedings as the obligated person;
- The non-banking entity is not a duly established and existing company4.
1 Direct owner means another legal or natural person that has property interest in a business corporation – non-banking entity.
2 Actual owner of a non-banking entity means:
- legal or natural person that factually or legally exercises directly or indirectly decisive influence on the management or operation of the enterprise of the non-banking entity; indirect influence means influence exercise through another person or other persons,
- legal or natural person that itself or based on an agreement with another member(s) disposes of more than 25% voting rights of the non-banking entity; disposing of voting rights means a possibility to exercise voting rights based on one's own discretion regardless of whether and on the basis of what legal reason they are exercised, or a possibility to influence the exercise of voting rights by another person,
- legal or natural persons acting in concert that dispose of more than 25% of voting rights of the non-banking entity, or
- a legal or natural person that is the recipient of the proceeds of the non-banking entity's activities based on another fact.
3 The composition of which is known to the applicant for insurance as of the day of examination based on data it has available and/or from publicly available sources.
4 Not registered in the respective commercial register or a similar register.
Examination cut-off criteria of banking entities
Banking entities
The basic evaluation criteria in providing insurance of export credit risks which EGAS as the insurer primarily assesses mainly based on information provided by the applicant for insurance, and the fulfilment of which has negative impact on the possibility to provide insurance of export credit risks, are the following:
- The bank, its actual owners and other members of its financial group1 the composition of which is and should be known to the applicant for insurance2, and the country of the registered office of the bank are subject to international sanctions regimes;
- The bank, its actual owners3 and/or subsidiaries do not comply with regulations on the prevention of money laundering and terrorist financing2;
- The bank and/or its actual owners3 and/or subsidiaries are subject to insolvency proceedings or similar proceedings as the obligated person2;
- The bank is not a duly established and existing company and is not entitled to carry out activities as a bank.
1 The parent company, a subsidiary and another company of the financial group. Financial group of an entity is a group of natural or legal persons, where:
- two or more natural or legal persons that, unless proven otherwise, constitute a single risk since one of them has direct or indirect control over the other person(s);
- two or more natural or legal persons between which there is not a relationship of control referred to in (a) but that must be seen as persons constituting a single risk because they are interconnected to such extent that if one of them got into financial difficulties, mainly difficulties with funding or payback, the other person or all other persons would probably also got into difficulties with funding or payback,
control is understood as a relationship between the parent company and a subsidiary company (persons) where the controlling person (parent company):
- has a majority of voting rights of shareholders or members in the other company; or
- has the right to appoint or remove a majority of the members of the administrative, managing or supervisory body of the other company and is concurrently a shareholder or member of the company; or
- has the right to exercise a dominant influence on any company it is a shareholder or member of within the meaning of a contract concluded with it or pursuant to its constitution or memorandum of association where the law which governs the company allows that it is subjected to such contracts, constitution or memorandum of association; or
- is a shareholder or member of any other company and
- a majority of members of the administrative, managing or supervisory body of this company who were members of these bodies during the current and previous accounting period until the time of preparation of consolidated financial statements, was appointed solely using their voting rights, or a share in any other company is at least 20%; or
- exercises, based on an agreement concluded with other shareholders or members of this company, a majority of voting rights of shareholders and members in this company.
A group of natural or legal persons consisting of central government and all natural or legal persons directly or indirectly controlled by it or interconnected as referred to in (b) are not considered a financial group.
The existence of a financial group made of central or regional government or local bodies ("central bodies") and other natural or legal persons may be assessed separately for each of persons directly controlled as referred to in (a) or directly interconnected as referred to in (b) or all natural and legal persons that are controlled by this person as referred to in (a) or interconnected with this person as referred to in (b), including central bodies.
2 The information follows from data which the applicant for insurance has available and/or from publicly available sources as of the date of examination.
3 Actual owner means
- legal or natural person that factually or legally exercises directly or indirectly decisive influence on the management or operation of the bank's enterprise; indirect influence means influence exercise through another person or other persons,
- legal or natural person that itself or based on an agreement with another member(s) disposes of more than 25% voting rights of the bank; disposing of voting rights means a possibility to exercise voting rights based on one's own discretion regardless of whether and on the basis of what legal reason they are exercised, or a possibility to influence the exercise of voting rights by another person,
- legal or natural persons acting in concert that dispose of more than 25% of voting rights of the bank, or
- a legal or natural person that is the recipient of the proceeds of the bank's activities based on another fact.
Basic Terms and Conditions of Insurance of Export Buyer Credit against the risk of non payment
Basic Terms and Conditions of Insurance of Export Buyer Credit against the risk of non payment
Insurance under the General Insurance Terms and Conditions, type "D"
- the maximum credit amount is 85% of the export contract value1
- the share of value of supplies of goods and services originating in the Czech Republic in the total export value2 – 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 countries 13,
- prepayment (deposit) of at least 15% of the export contract value must be paid by the importer (debtor) before the Starting Point4 to the exporter's bank account maintained by the insured bank1,
- readiness and funding of manufacturing of the subject of export is provided,
- trouble-free credit history5 of the entities6,
- environmental and social impact assessment1 and non-application of international sanctions towards entities involved in the export, goods or territory or area,
- in negotiating the export credit, the exporter did not violate provisions of norms and practices of international law the Czech Republic is bound by, and legal regulations in the area of bribing were not violated,
- the entity6 has existed and executed the activity being the subject of export / activity as a bank for no less than 2 years before submitting the preliminary application for insurance of export buyer credit or its activity follows up on the activity of its legal predecessor, carried out for no less than 2 years before submitting the application for insurance of export buyer credit.
- Credit insurance/claims in connection with the export of selected agricultural products listed in annex No. 1 of the Agreement on Agriculture, which is part of the Agreement Establishing the World Trade Organization (WTO), the maximum repayment term shall not exceed 18 months (from the starting point of credit to the end of the contractual date of the final payment).
1 applicable to credits with the maturity of two years or more only
2 price agreed in the Export Contract
3 The export contract value according to the OECD Consensus represents the value of supplies from the Czech Republic and third countries, i.e. the export contract value less the value of local supplies, so called Local Costs
4 Starting Point according to the OECD Consensus
5 The trouble-free credit history shall be interpreted as absence of record on the Subject' default payment (of principal as well as accessories) in the register of credits for the term of no less than last 5 years. In the CR, it is the Central Credit Register maintained by the CNB (for legal entities having credits in banks or subsidiaries of foreign banks operating in CR's territory), a similar register exists abroad. The "bank and non-bank register of client information" and "Solus" exist for natural persons being in the role of sponsor or guarantor
6 persons involved in the export and its funding
Basic Terms and Conditions of Insurance of Export Buyer Credit against the risk of non payment - project funding
Basic Terms and Conditions of Insurance of Export Buyer Credit against the risk of non payment
Insurance under the General Insurance Terms and Conditions, type "D" – project funding
- the share of own resources invested in the project7 by sponsors8 must be at least 25–30% of the total project budget (excluding VAT),
- the maximum credit amount is 85% of the export contract value1
- the minimum amount of the registered capital of the project company9 must be 10% of the total project budget (excluding VAT),
- all assets of the project company (the debtor)9 will be pledged in favour of the insured bank,
- 100% ownership interest in the project company9 will be pledged in favour of the insured bank,
- the share of value of supplies of goods and services originating in the Czech Republic in the total export value1 is higher than 50 %,
- 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 countries13,
- prepayment (deposit) of at least 15% of the export contract value must be paid by the project company (debtor)9 before the Starting Point4 to the exporter's bank account maintained by the insured bank1,
- the project will be insured against all risks and any benefits from the insurance will be directed to the insured bank for the period of credit repayment10,
- readiness and funding of manufacturing of the subject of export,
- the purpose of credit drawing will be monitored by an independent inspection company appointed by the insured bank at the expense of the project company (debtor)9,
- any payment of dividends, significant changes in the assets and liabilities as well as any change of ownership structure of the project company (debtor)9 will be subject to the consent of the insured bank for the period of credit repayment,
- a Project Support Agreement will be signed between the insured bank, the sponsor8 and the project company9 stipulating a commitment to provide financial and other support for the project, including payment of the additional costs of the project,
- trouble-free credit history5 of the involved entities6,
- environmental and social impact assessment of the export1 and non-application of international sanctions,
- in negotiating the export credit, the exporter did not violate provisions of norms and practices of international law the Czech Republic is bound by, and legal regulations in the area of bribing were not violated,
- the entity6 has existed and executed the activity being the subject of export / activity as a bank for no less than 2 years before submitting the preliminary application for insurance of export buyer credit or its activity follows up on the activity of its legal predecessor, carried out for no less than 2 years before submitting the application for insurance of export buyer credit.
- Credit insurance/claims in connection with the export of selected agricultural products listed in annex No. 1 of the Agreement on Agriculture, which is part of the Agreement Establishing the World Trade Organization (WTO), the maximum repayment term shall not exceed 18 months (from the starting point of credit to the end of the contractual date of the final payment).
1 applicable to credits with the maturity of two years or more only
2 price agreed in the Export Contract
3 The export contract value according to the OECD Consensus represents the value of supplies from the Czech Republic and third countries, i.e. the export contract value less the value of local supplies, so called Local Costs
4 Starting Point according to the OECD Consensus
5 The trouble-free credit history shall be interpreted as absence of record on the Subject' default payment (of principal as well as accessories) in the register of credits for the term of no less than last 5 years. In the CR, it is the Central Credit Register maintained by the CNB (for legal entities having credits in banks or subsidiaries of foreign banks operating in CR's territory), a similar register exists abroad. The "bank and non-bank register of client information" and "Solus" exist for natural persons being in the role of sponsor or guarantor
6 persons involved in the export and its funding
7 Project means a business case where the payback of funding provided is primarily dependent on resources generated by the actual business case
8 A sponsor is a person that puts their own resources to the project and is involved in the management of implementation of the project
9 A project company is a foreign person established to implement the respective project
10 E.g. tying the payment of benefit in favour of a third party applicable to credits with the maturity of two years or more only
Podmínky spoluúčasti
| Obchodní případ do zemí kategorie 0-5 | 5 % |
| Obchodní případ do zemí kategorie 6-7 | 10 % |
| Projektové financování (se státní garancí) | 10 % (5 %) |
| Politické riziko nebo na suverénní riziko státu (kat. 0-5) | 0 % |
| Politické riziko nebo na suverénní riziko státu (kat. 6-7) | 5 % |
| Vývoz zemědělských a potravinářských produktů | 5 % |
| Exportér spadá do kategorie MSP | 5 % |
| Země s nižším než 0,1 % podílem na exportu ČR | 5 % |
| Země s nižším než 1 % podílem na portfoliu EGAP | 5 % |
| Odvětví s nižším než 0,1 % podílem na exportu ČR | 5 % |
| Odvětví s nižším než 1 % podílem na portfoliu EGAP | 5 % |
| Zajištění alespoň 50 % PH (ECA/komerční zajistitel) | 5 % |
| Transakce bank-to-bank | 5 % |
| Alternativní nabídka od zahraniční ECA | podle nabídky, obvykle 5% |
| Exportér výsledků VaV | 3 % |
| Úprava dle plného škodního poměru | dle propočtu |