Pre-shipment guarantee

About the product

Pre-shipment guarantee

The pre-shipment guarantee assures the exporter against losses if the buyer terminates an agreement before the product has been delivered.

How the guarantee works

The guarantee is a service to exporters without bank involvement. The guarantee is particularly relevant in cases where international deliveries are customised and therefore difficult to sell to other buyers. Eksfin assures up 90% of the supplier’s direct and indirect costs up until the date when the contract was terminated. Eksfin does not cover lost profit.

Conditions

• The guarantee applies to losses caused by a foreign buyer’s inability or unwillingness to pay (commercial risk), and/or losses resulting from non-delivery due to events in the buyer’s home country, such as sanctions, boycotts and law amendments (political risk).
• The guarantee will not apply to non-deliveries if the exporter or someone acting on their behalf breaches the export contract, unless due to political risk (if any).
• In the event of payments being made under the guarantee, Eksfin will become involved with the claim against the buyer, i.e., take over the exporter’s right to demand payment from the buyer.
• In relation to risk for buyers in high-income countries (marketable risk in accordance with EEA rules), the guarantee will normally only be given when Eksfin also grants financing for more than two years to the buyer.
• The exporter’s bank can take security in the guarantee, e.g., in connection with an overdraft facility, which must be accepted by Eksfin.
• Sustainability, environmental, anti-corruption and KYC requirements must be satisfied in accordance with applicable regulations.

How much does the guarantee cost?

Eksfin charges a premium for the guarantee. The premium is set based on the following circumstances:

• The maturity date
• The creditworthiness of a foreign buyer – probability that the buyer will pay
• Risk of political unrest in the buyer’s country or introduction of sanctions that impact deliveries under the contract
• Any additional costs, for example, local legal assistance Should these apply, the customer will be informed.

How to apply

The export company must apply for a guarantee from Eksfin before production starts.