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While export credit insurance (“ECI”) remains the mainstream product in the global export credit industry, some export credit agencies also provide export credit guarantees (“ECGs”). An ECG is a more client-friendly product and easier than ECI for banks to use. This is reflected in their significantly different contractual terms: an ECI policy imposes more substantial obligations on banks than an ECG contract. Despite its higher costs, an ECG can better cater to the needs of some banks. It can be used either as a “top-up” facility together with ECI in supplier credit transactions or as a standalone and tailored product in buyer credit transactions.
“Export credit facilities” is the collective name for all types of insurance or guarantee products that are used to secure trade transactions where the exporter allows the buyer to pay on credit terms.1 According to the International Association of Credit & Investment Insurers (“the Berne Union”), the international organisation of official export credit agencies (“ECAs”) and private credit insurers around the world, in 2018 alone, about 13 per cent of the world’s cross-border trade (US$2.5 trillion equivalent) was protected by export credit facilities.2 Depending on the legal nature of the cover, export credit facilities can be categorised as export credit insurance (“ECI”) or export credit guarantee (“ECG”). The terms “insurance” and “guarantee” are often used interchangeably to label