Senate approves Law on export credit agency and export promotion
In the second reading, the Senate of the Republic of Kazakhstan approved the law titled "Amendments to certain legislative acts of the Republic of Kazakhstan on export credit agency and promotion of the export of non-commodity goods and services."
This law, developed in compliance with the President's directives, entails the establishment of the Export Credit Agency of Kazakhstan (ECA) based on the existing subsidiary of Baiterek Holding – KazakhExport Export Insurance Company. The law also aims to consolidate key measures for financial support and advancement of non-resource exports.
The ECA will operate as a national institution dedicated to fostering the development and promotion of non-resource exports, thereby stimulating business export potential, and enhancing the competitiveness of Kazakhstani products and services in global markets.
Granting KazakhExport ECA status will broaden the scope of support measures for non-commodity exports, encompassing existing services such as insurance, reinsurance, pre-export, export trade finance, and introducing new initiatives like export operation guarantees and interest rate subsidies on trade finance.
Currently, KazakhExport serves as the sole entity responsible for promoting non-resource exports and operates under the regulatory purview of the Agency for Regulation and Development of the Financial Market.
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Guaranteeing export operations will enable Kazakhstani exporters to participate in international tenders and broaden the presence of Kazakhstani goods and services in markets with high export demand.
Moreover, this measure will incentivize importers to provide advance payments by offering a KazakhExport guarantee as security for payment obligations under export transactions. By obtaining a KazakhExport guarantee directly, exporters can bypass the need for bank involvement and collateral.
Subsidizing trade finance rates also offers opportunities for domestic manufacturers of high-tech goods and services to access financing for foreign buyers through KazakhExport.
This initiative aims to boost Kazakhstan's exports by creating favorable terms for purchasers of Kazakhstani products and services, thereby enhancing competitiveness in export markets across Europe and Asia.
This initiative presents Kazakhstani financial institutions with the opportunity to insure risks associated with non-fulfillment of obligations by issuing banks, expand their product offerings, and grow their client base.
