ECI Trade Insurance offers this product to banks engaged in
trade / structured financing.
The object covered by
the EDFS-facility insurance is the bank’s receivable purchased
from a Exporter, originating from a medium or long-term
supplier’s credit facility related to a foreign trade contract.
The insured is the bank purchasing the receivable, or in the
case of a bank consortium, the lead member of the consortium.
The EDFS facility offers the insured bank the same
insurance cover as the buyer’s credit insurance facility, so as
to ensure that even in the event of unsatisfactory performance
by the Exporter or a commercial dispute, it will receive its
indemnity payment from ECI Trade Insurance, in respect of the
suppliers’ receivables that it purchases, if it incurs damage
due to the occurrence of an insured event.
ECI Trade
Insurance has elaborated the terms and conditions of this
product to ensure that, based on the Basel II capital allocation
guidelines, the risks of the commercial transaction and of the
financing are separated from each other. ECI assumes the
performance risk, while stipulating its right to enforce a
recourse claim against the Exporter, as the most important
condition of the insurance.
The insurance cover
extends to both the commercial and the political risk.
The insured is liable for the deductible of 5% of
the amount of damage incurred.
The grace period for
indemnification is ninety days from the occurrence of the
damage. The indemnification grace period is not applied where
the insured event is the insolvency of a private debtor.