Annual Credit Alliance meeting in Vienna - Austria
The annual credit alliance meeting was held in Vienna, Austria from 30th September 2001 to 2nd October 2001. ÖKV of Austria hosted the meeting. The Credit Alliance Network has presently a total of 47 partners consisting of ECAs from various countries, COFACE of France and its subsidiaries. The conference provided necessary forum for exchanges of information and put forward future issues as well as held various workshops. Export Credit Guarantee Agency (ECGA) joined the Credit Alliance in 1996 and it is a Regional Coordinator for Africa – Middle East Region as well as representing the Region in the General Steering Committee of the Credit Alliance Network. It is worth mentioning that the Inter-Arab Investment Guarantee Corporation, (IAIGC) as well as the Lithuania Export and Import Insurance (LEII), Cotunace of Tunisia and Eximbank of Slovakia were recently admitted as new members of the Alliance.
John Manners Memorial Shield Award
The Credit Alliance has awarded Mr. Nasir bin Issa Al-Ismaily Head of the Export Credit Guarantee Agency with John Manners Memorial Shield. The award was set up to commemorate the memory of the late John Manners from CUAL of South Africa so as to continue the ideals that he strove with the Credit Alliance. This is a great international recognition and achievement for ECGA of the Sultanate of Oman considering that Mr. Al-Ismaily is the first holder of the award due to his active role and leadership in the Africa - Middle East Region and the Alliance. Mr. Nasir Al-Ismaily was also re-elected for another term as the Regional Coordinator as well as well as a member of the General Steering Committee of the Credit Alliance Network.
ECGA staff attended International Accounting Course
Mr. Mousa bin Mahfoudh Al-Rahbi – ECGA’s Accountant attended an International Accounting and Finance course for three weeks organized by the London School of Economics & Political Science. A number of participants from various countries also attended it. The course also covered various aspects of international accounting standards as well as implications of IAS 39 and international financial instruments including foreign exchanges, futures, options, derivatives, etc.
ECGA's Officers participated in The Advanced Underwriting Training Course organized by ICIEC in Jeddah
Two of ECGA’s Underwriters – Mr. Ahmed bin Khalfan Al-Bulushi and Mr. Saif bin Nasir Al-Mehdi participated in an advanced underwriting course in Jeddah, Saudi Arabia sponsored by Islamic Corporation of the Insurance of Investment and Export Credit (ICIEC) which is a multilateral ECA for Islamic countries. The 3-days comprehensive training course for Underwriters from National Export Credit Agencies of Islamic countries covered various areas underwriting of buyer risk including credit analysis, credit scoring models, limitations of credit analysis, credit discipline, etc.
ECAs for Islamic Countries will meet in Jeddah - Saudi Arabia
The second Meeting of the Export Credit Agencies of the Islamic countries sponsored by the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) will be held in Jeddah, Saudi Arabia on 4th & 5th November. Export Credit Guarantee Agency has been invited by ICIEC to participate in the meeting. The agenda of the meeting will include presentation of participating ECAs, recent developments/challenges, technical issues raised, modes of cooperation between ECAs and ICIEC as well as topics pertaining to reinsurance of credit and political risks.
ECGA marks its 10th Anniversary
The Export Credit Guarantee Agency marks its 10th Anniversary in November 2001. The Agency witnessed significant developments and highly successful accomplishments through its 10 years history. It has continued through the years to provide timely and efficient credit insurance and other guarantee and financing services to large number of Omani exporters. The Agency’s export credit insurance services which commenced in November 1991 has been highly successful in attracting growing number of Omani exporters. The total number of credit insured exporters and buyers worldwide as of end of August 2001 reached to 122 and 2582 respectively with a total credit limits issued of RO.128.5 million. A special article on the success of ECGA’s export credit insurance is provided on page three of the Bulletin.
Questions and Answers Q- As a distributor of Omani produced goods, can I avail ECGA’s credit insurance cover? A- Yes indeed. The export credit insurance services is not a restricted only to manufacturers but also distributors and others involved in exporting Omani produced products.
Q- As a credit insured exporter, are there variouswaiting periods for the different causes of losses? A- Yes indeed. In this respect it is worth emphasizing again that full documentation must be sent with the claim and that the claim itself must be submitted in good time. Provided this is done - and you have complied with the conditions of your policy and the terms of your contract - claims for the various causes of loss are payable as soon as practicable. Generally speaking, the 'dates of ascertainment of loss' are listed as follows :-
for insolvency of the buyer - once established, the policyholder is paid immediately or one month processing period on proof of insolvency that the insured debt has been admitted in favor of the exporter by the insolvent estate.
for protracted default, on goods delivered and accepted - the policyholder is paid six to twelve months after the due date of payment based on the country where the buyer is located.
for failure to take up the goods the - policyholder is paid one month after resale;
for delay in the transfer of payment, or a shortfall arising from the legal discharge of debt in local currency - the exporter is paid six months after due date of payment, or completion of the formalities for transfer, whichever is the later;
In all other cases - six months after the event which causes loss, or immediately after loss is actually sustained, whichever is the later.
Q- In general, is there a set time by which a claim will be paid? A- As you may have noticed from reading of your Export Credit Policy, it containsno undertaking to pay a claim at or by a particular time. The Policy merely specifies aminimum period of timeafter which losscan be ascertained. This particularpoint in time is known as the ' date of ascertainment of loss' - which must bereached before any claim can be met. This obligatory waiting period - for that is what it is - serves avaluable function. It helps both ECGA and the policyholder to distinguishshort-lived 'accidental' delays in payment from the true default which persistslong enough to reflect a real loss.
Q- Does ECGA take over recovery action once a claim has been paid? A- After payment of a claim, ECGA has the right to take over the debt, but while it does exercise this right in some instances, it will normally require the policyholder to continue recovery action along the path already agreed with ECGA subject to any further requirements it may have.
Q- What type of sales contracts are eligible for ECGA cover ? A- Under the Export Credit Insurance Policy cover is available for shipment under contracts for export of goods on payment terms of Cash Against Document, Documentary Sight Draft, Documents against Payment (D/P), Documents Against Acceptance (D/A), open accounts and Letters of Credit at Sight or Usance. However, if the terms of payments are different to those in the original contract for instance from L/C to D/P terms and from D/P terms to D/A terms the policyholder is advised to obtain the buyer's prior consent in writing before shipment. Otherwise ECGA may not be liable even if the policyholder already has a credit limit on that buyer .
Q- How can a policyholder assists ECGA in processing credit limit application more quickly? A- First, the amount of the credit limit application should be realistic and close to the credit insured exporter’s probable requirements in the foreseeable future.
Second, the policyholder should provide ECGA with full and correct details of the
buyer 's trading style, address and the name and address of his banker.
Third, it is important that the policyholder gives full and actual details of
previous trading experience with the buyer., Fourth, if the policyholder
has up-to date credit information on the buyer he can attach such
reports together with any other additional information to the application.
Tips to Exporters
Credit insured exporters are well advised not to take undue risks when providing credit and when trading on open account. They should obviously be exceptionally careful to protect themselves against the risk of non-payment and thus against severe shocks to their liquidity and capital.
A sale is not a sale until it is paid for extreme caution is necessary during the current increasingly unpredictable and uncertain risk environment.
Past experience of trading with a buyer is important, but is no substitute for an intelligent approach to the extension of credit and collection.