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Korea deal ensures access to trade finance

Korea deal ensures access to trade finance  article image
Australian credit agency, the Export Finance and Insurance Corporation (EFIC), yesterday announced it had signed a Reciprocal Reinsurance Agreement with its Korean counterpart, the Korea Export Insurance Corporation (KEIC). The agreement will assist collaboration between Australian and Korean companies with regard to international contracts. Businesses will also benefit from the agreement's streamlined financing and administrative efficiencies. "Overseas buyers find reciprocal reinsurance agreements particularly appealing when choosing suppliers because of the one-stop nature of the service," said Chang Foo, head of Product Management and Risk Transfer at EFIC. "They need only deal with the lead export credit agency, saving costs and time in finalising a contract. This type of agreement can facilitate the participation of Australian exporters in large overseas contracts." Under reinsurance agreements, the lead export credit agency provides export credit cover for the entire transaction on its usual terms, while the other agency, whose exporter is a sub-contractor, provides reinsurance to the lead agency for its portion of the transaction.

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