Export Receivables Guarantee
Export Receivables Guarantee
The guarantee is particularly well suited to the export of raw materials, consumables, durable
consumer goods, semi-finished goods and similar products where the payment period granted to the buyer is usually at most 180 days.
The exporter can also use the Export Receivables Guarantee as security for credit by transferring the right of indemnity to the bank.
The guarantee covers the commercial risk connected with the buyer and the political risk of the buyer's country.
- Commercial risks refer to the buyer’s inability or unwillingness to pay.
- Political risks are risks arising from the buyer’s country that are beyond the buyer’s and the exporter’s control, such as restrictions on currency transfers, rescheduling of debts, or war and insurrection.
Depending on the buyer’s country, the guarantee coverage ranges from 75% to 90%.
Finnvera can grant new ST guarantees (risk period less than 2 years) for the following marketable risk countries until 31.12.2021:
- Austria, Bulgaria, Belgium, Croatia, Cyprus, Czech Republic, Denmark, Estonia, France, Germany, Greece, Hungary, Italy, Ireland, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom, Australia, Canada, Iceland, Japan, New Zealand, Norway, Switzerland, USA
- New buyers can be approved until 31 December 2021 and export transactions with the approved buyers can be covered until 29 June 2022
Normally, as an official export credit agency Finnvera cannot grant guarantees with a risk period of less than 2 years (manufacturing period + repayment period) to the so-called marketable risk countries due to EU state aid rules. As a part of the Temporary Framework for State aid, measures to support the economy in the current COVID-19 outbreak, the EU Commission has announced the above countries as temporarily non- marketable until the end of December 2021. Consequently, the official export credit agencies of the EU countries are able to provide credit insurance as one way to address the impact of the coronavirus crisis.
Finnvera’s role is to complement the private market during the corona crisis. The private credit insurance companies are the primary source of services in this field.
Contact information for the credit insurers operating in Finland:
Atradius Credit Insurance N.V.
Tel. (09) 6811 2422
Tel. +358 (0)50 596 7431
Euler Hermes Luottovakuutus
Tel. 010 850 8500
Tel. +358 (0)20 7805 790
Terms and conditions of the Export Receivables Guarantee
The guarantee is granted to the exporter. The export transaction must meet the requirement of
Finnish interest. The payment terms must conform to international practices.
The guarantee may be granted for an individual transaction or for continuous exports, in which
case it is valid until further notice.
The buyer’s creditworthiness is determined on the basis of credit information and, whenever necessary, financial statements. The creditworthiness of countries is investigated by following their economic and political situations.
A credit limit is determined for each buyer eligible for a guarantee. The limit means the maximum amount of insured receivables outstanding at any given time.
The premium is based on the credit period of the export transaction and on the payment category determined on the basis of a risk assessment.
For credit periods of at most 90 days, the premium is 0.40–0.75% and for credit periods of 91–180 days, 0.50–1.20%. The premium is calculated from the value of the exported goods reported by the exporter. An additional buyer-specific minimum premium is EUR 150.
The beneficiary of the export credit guarantee, i.e. the Guarantee Holder, usually the exporter or the bank, submits a claim for indemnification based on an export credit guarantee with a signed written application. The applicant may also be the transferee of an indemnity right.