Export Trade Finance
These tool were introduced to stimulate demand for Kazakhstan products from foreign buyers. Financing is provided to foreign companies to buy Kazakhstan goods through Kazakhstan banks in the framework of the letter of credit payment method
- The exporter and importer sign an export contract
- The importer submits to its bank (the issuing bank) to issue a letter of credit in favour of the exporter's bank (the confirming bank)
- The importer's bank (issuing bank) issues a letter of credit requesting the addition of a confirmation
- The exporter's bank (confirming bank) and KazakhExport conclude an insurance contract
- The exporter makes shipment of the goods and submits the shipping documents under the terms of the letter of credit to its bank (confirming bank)
- When the term of financing is up to two years, KazakhExport places a bank deposit for the amount of the shipping documents in the exporter's bank, which in turn makes payment to the exporter. When the term of financing exceeds two years, the bank finances at its own expense
- For an obligation defaulted by the importer's bank (issuing bank), KazakhExport makes an insurance payment in favour of the exporter's bank (confirming bank)
- Actions of the state body of the country of the Bank-issuer of the letter of credit for expropriation, confiscation of the goods/services supplied under the contract, or interference in the activities of the Bank, which is of a discriminatory nature, preventing the execution of the letter of credit;
- War, civil unrest, riots of a mass nature in the country of the Bank-Issuer, preventing the Bank-Issuer from fulfilling its obligations under the letter of credit;
- Actions by a government authority in the country of the Issuing Bank that restrict or prohibit conversion into a freely convertible currency and/or transfer of payment under a letter of credit.
- bankruptcy of the Issuing Bank;
- non-execution of payment by the Bank-Issuer within the terms determined by the terms of the letter of credit.