D - Annex No. 1 to the preliminary application - Basic Terms and Conditions of Insurance of Export Buyer Credit against the risk of non payment

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Appendix 1
to the preliminary application for insurance of an export buyer credit against the risk
of non payment - product "D"
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 is higher than 50%,
  • the share of Local Costs does not exceed 15%, or exceptionally 30% of the export contract value3, 1,
  • 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
Insurance of Export Buyer Credit under the General Terms and Conditions of Insurance, 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 15%, or exceptionally 30% of the export contract value3,1,
  • 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

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