|
Export
credit guarantee is a system that protects exporters
of national commodities and services from risks of non-payment
by providing them with compensation for losses incurred
as a result of the occurrence of these risks.
The Exporter, through his frequentation of foreign markets,
is exposed to a number of risks that result in non-
payment for his exports through no fault of his own.
Such risks may be commercial or non - commercial.
The term "Commercial Risks" refers to risks
attributable to the buyer such as his refusal to receive
the goods, his refusal or inability to pay for the goods
after receipt, his bankruptcy, insolvency, or even his
procrastination in paying his dues.
The term "Non - Commercial Risks" refers to
risks that are not attributable to either the Explorer
or Buyer. These risks result from procedures undertaken
by the authorities in the Buyer's country which may
prevent the Exporter from obtaining his dues from the
buyer, or may lead to losses that he cannot charge the
buyer with. Examples of these risks include the cancellation
of the import license after shipment of the goods, refusal
to allow the goods into the state, interdiction for
the goods to cross a territory, confiscation of the
goods or their seizure, or the issuance of a decision,
decree, or regulation that prohibits or delays payments
on external debts. Other examples include the sequestration
of the buyer's establishment, the prohibition of the
buyer's country's authorities to transfer the exporter's
due, the imposition of a of a preferential exchange
rate against the Exporter's interests, or the emergence
of a state of war that may result in non - payment to
the Exporter.
Recognizing the importance of guarantees as an incentive
for the development of exports, countries seeking to
promote their exports have adopted national programs
that provide credit guarantees for export operations.
Such programs have become popular in both industrialized
and non - industrialized countries.
In Egypt, the government endorsed the "National
program for Guarantee" by issuing law no. 21 of
the year 1992, thereby establishing the Export Credit
Guarantee Company of Egypt and entrusting it with the
task of managing the Egyptian Program for Export Credit
Guarantees.
- The
goal of the program was defined as "the encouragement
and development of Egyptian exports and the cooperation
in promoting the agricultural, industrial, commercial,
and service exports sectors".
- The
program was designed to achieve the following:
-
Provide guarantees on export operations dealing
in national commodities and services against commercial
risks through insurance policies issued by the
company and payable to banks and other financing
sources.
- Provide
reinsurance on all policies issued by the company
by means of agreements concluded by it in the
national or international markets for insurance
and guarantees.
- Have
the company assume the role of reinsurer by having
it accept to reinsure operations carried out by
parties having similar activities.
- Participate
in or contribute to national or foreign organizations,
establishments, and companies engaged in activities
that are similar, complementary or related to
the company's, or the aim at the realization of
the company's goals
|
