industry information > communications > hot topics > The Export Credits Guarantee Department (ECGD) > ECGD terms of business

Premium payable
Whether ECGD support is provided direct to the exporter or to his bank it is the exporter, for whose benefit these facilities are provided, who pays a premium to ECGD.
Factors affecting premium include the value of the contract, the length of the credit term and the perceived creditworthiness of the customer.
In the case of support provided to banks, the premium cost for country risk is determined by international agreement between members of the OECD and is, broadly, the same for exporters in any country of the OECD.

Support for foreign content
ECGD's recently amended foreign content rules allow support for contracts with a minimum UK content of 20%. UK content includes such non production items as software development. Support for local (buyer's country) costs remains limited to the value of the customer downpayment.

ECGD's key conditions
Although ECGD's primary purpose is to support British exports it also has to comply with other broader Government policies and objectives.

In order to obtain ECGD support exporters can expect to have to

• provide detailed information about any overseas agents
• give comprehensive anti bribery and corruption declarations and undertakings
• complete an Environmental Impact questionnaire
• Provide a detailed breakdown of the mix of national content involved in their project or contract.

Exporters need to be aware that ECGD, like other Government departments, is subject to the provisions of Freedom of Information legislation.

Examples of ECGD's application forms can be found on ECGD's website.

Other related issues


Whole turnover cover
ECGD does not offer short term whole turnover credit insurance. This is available from commercial insurers such as AIG, Atradius, Coface and Euler Hermes.

Bond issue support
Some export credit agencies support exporters by insuring their banks against the risk that the exporter will be unable to pay the bank, following a call on a bond issued by that bank on the exporter's behalf. This is separate from bond unfair calling cover (see Bond Insurance Policy, above). ECGD does not offer this support. See question 7 in the attached questionnaire.

The competition
Your overseas competitors will benefit from support from their equivalent of ECGD. If these other Export Credit Agencies (ECAs) are based in an OECD member country then broadly the same environmental protection and anti bribery and corruption provisions embraced by ECGD will also apply to them. This will not necessarily be the case for competitors' ECAs based in non OECD member countries.
The offerings and methodologies of different ECAs do differ from one to another. If you have direct experience of another ECA's offering which you believe is more competitive than that available from ECGD, please could you provide details on the attached questionnaire.