UK exporters involved in the reconstruction of Iraq will get short-term cover from Britain’s Export Credits Guarantee Department (ECGD).
ECGD is one of 17 Export Credit Agencies from 16 countries participating in a Framework Agreement with the Trade Bank of Iraq (TBI) and the Coalition Provisional Authority (CPA). Cover will be made available under a new ECGD account up to an exposure limit of $100 million. This is in addition to more than $900 million the UK Government has already committed to Iraqi reconstruction.
ECGD will be offering export credit insurance policies to banks or other financial institutions that it approves. The policies will provide cover against the risk that the TBI will fail to meet its obligations in respect of letters of credit issued by it or on its behalf.
Coverage will be available for irrevocable letters of credit issued on terms of either 180 days or 360 days for eligible goods or services with a minimum UK content of 50 percent. Defense exports will not be eligible. ECGD will be able to write business on these terms for the duration of the CPA’s life. These arrangements will then be reviewed.
ECGD will only provide cover for letters of credit issued in respect of exports that meet the humanitarian needs of Iraq, including the economic reconstruction and repair of Iraq’s infrastructure, covering the costs of restoring and running the Iraqi civilian administration in accordance with United Nations Security Council Resolution 1483, stated a press release.
ECGD is a separate government department reporting to the UK Secretary of State for Trade and Industry. Other signatories to the framework agreement include Australia’s EFIC, Belgium’s ONDD and Italy’s SACE. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
