Insurance of export letters of credit
This tool allows the Exporter's Bank (Confirming Bank) to get insurance coverage in the event of non-fulfillment by the Importer's Bank (Issuing Bank) of obligations in respect of letters of credit that occurred as a result of one or more political and commercial events.
- Exporter and Importer sign an export contract.
- The Importer applies to its Bank (Issuing Bank) for the issuance of a Letter of Credit in favor of the Exporter's Bank (Confirming Bank).
- The Importer's bank (issuing bank) issues a letter of credit with a request to add confirmation.
- The Exporter's Bank (confirming bank) and KazakhExport enter into an insurance contract.
- The Exporter delivers the goods and submits documents for payment in accordance with the terms of the letter of credit to its Bank (confirming bank), which in turn makes payment to the Exporter.
- For an obligation not fulfilled by the Importer's bank (issuing bank), KazakhExport pays an insurance payment in favor of the Exporter's bank (confirming bank).