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| Sunday, 09 March 2003 |
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| News Business Features Editorial
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SLECIC to help mitigate war risks In keeping with the objective of developing, promoting and supporting exports, the Sri Lanka Export Credit Insurance Corporation (SLECIC) has launched many programs to help mitigate the risks faced by exporters dealing with developed and emerging markets as well as introducing new facilities to help exporters obtain credit facilities from banks. While the world economy is still recovering from the impact of September 11, another war is looming in the Middle East. This underlines the uncertainties of international trade and the vulnerability of Lankan exporters to trade-related risks. In its capacity as the State export credit insurer, SLECIC is now faced with a similar situation in the Middle East. Exporters and banks are increasingly turning to SLECIC for reassurances to support their export endeavours to that region. SLECIC on a special directive given by Minister of Commerce and Consumer Affairs Ravi Karunanayake in consultation with Prime Minister Ranil Wickremesinghe, has resolved not to burden the already 'badly-hit' exporters with any further costs. The Corporation has advised exporters specially its customers, to carry on their exports to the Middle East under the existing terms and conditions and that no 'war risk' surcharge will be imposed due to the present situation. SLECIC also anticipates that exporters will make this an opportunity to establish themselves firmly in the Middle East market when existing suppliers to these markets are backing out due to lack of support from their insurers. SLECIC provides the Export Payments Insurance Policy, to protect exporters from commercial and political risks that arise with international trade. Bankruptcy or insolvency of the buyer, protracted default in payment by the buyer after taking delivery and repudiation of contract by the buyer after the goods have been exported are covered. Political risks covered under this policy are: imposition of restrictions by the buyer's government or any government action which may block or delay the transfer of payment, new import restrictions or cancellation of a valid import license war, civil commotion or other disturbances in the buyer's country, interruption or diversion of voyage resulting in payment of additional freight or insurance charges, which cannot be recovered, from the buyer and any other event of loss not normally insured by General insurers and beyond the control of both the policy holder and the buyer, arising from events occurring outside Sri Lanka. Besides insurance policies, SLECIC also offers credit guarantees to commercial banks on behalf of exporters to facilitate the provision of export finances at pre and post shipment stages. |
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