As the Australian Government’s export credit agency, we help successful businesses to win, finance and protect export trade or overseas investments by working directly with exporters or with their banks to provide loans, guarantees, bonds and insurance products which can be tailored to meet the needs of both large and small exporters.
EFIC does not compete with the private market. A key part of our charter is to work with the commercial finance sector.
EFIC is uniquely placed to do this: we use over 50 years of export finance and industry expertise, contacts at financial institutions around the globe, the strength of our AAA credit rating and an entrepreneurial business approach to make export deals happen.
Reciprocal Risk Participation agreements (RRPA)
These agreements enable Australian companies in the respective countries to take part in international contracts and benefit from the streamlined financing packages and administrative efficiencies created under these agreements.
Under RRPA, the lead export credit agency (ECA) provides export credit cover for the entire transaction on its usual terms, while the other ECA, whose exporter is a sub-contractor, provides risk sub-participation for its portion of the transaction to the lead ECA. Buyers and borrowers need only negotiate one set of documents with the lead ECA.
RRPAs’ have been established with:
- Belgium - Office National du Ducroire (ONDD),
- China - Export-Import Bank of China (China EXIM Bank),
- France - Compagnie Française d'Assurance pour le Commerce Extérieur (COFACE),
- Germany - Euler Hermes Kreditversicherungs AG,
- Indonesia - Pt. Asuransi Ekspor Indonesia Persero (ASEI),
- Israel - The Israel Foreign Trade Risks Insurance Corporation Ltd (ASHRA),
- Japan - Nippon Export and Investment Insurance (NEXI),
- Korea - Export-Import Bank of Korea (Korea Eximbank),
- Korea - Korean Trade Insurance Corporation (K-sure),
- Malaysia - Export-Import Bank Of Malaysia Berhad (MEXIM),
- Netherlands - Atradius NV,
- New Zealand - The New Zealand Export Credit Office (NZECO),
- Sweden - Exportkreditnämnden (EKN),
- Thailand - Export-Import Bank of Thailand (EXIM Thailand),
- USA - Export-Import Bank of the United States (US Ex-Im Bank).
Established in 1934, the Berne Union (International Union of Credit & Investment Insurers) is the leading international association for the export credit and investment insurance industry. It works for cooperation and stability in cross-border trade by supporting the international acceptance of sound principles in export credits and foreign investments and by providing a forum for professional exchange among its members.
Berne Union members are both private companies, offering worldwide risk management solutions, and export credit agencies, like EFIC, focusing upon the support of national exports and outward investments.
The Berne Union has well established links with other organisations that play important roles in world trade including the WTO, World Bank, IMF, OECD and regional development banks.
EFIC’s Managing Director & CEO, Mr Angus Armour, served as a vice president of the Berne Union from 2006 to 2007 and in October 2009, he was appointed President of the Berne Union.
Asian Exim Banks Forum
EFIC is a member of the Asian EXIM Banks Forum an organisation formed in 1996 to enhance co-operation and forge stronger relationships between member export-import banks in promoting global trade and investment. Members include institutions from China, India, Indonesia, Japan, South Korea, Malaysia, Philippines, Thailand and Australia.
Competing for business in the United States market can present particular challenges for Australian companies, especially SME exporters. In the US, a supplier is typically required to provide a surety bond, from a registered US security bond issuer, for up to 100% of the export contract value as security for their performance obligations. An Australian exporter may be unable to raise this level of security or may be unwilling to tie up their working capital.
EFIC’s US bonding line with Liberty Mutual Insurance Company (Liberty Mutual) enables an exporter to deal directly with EFIC. EFIC in turn works with Liberty Mutual to help the exporter meet their US bonding requirements.
EFIC’s security requirements are based on an individual assessment of an exporter’s ability to perform the export contract, and may be less than the amount of the bond. As a result, EFIC’s bonding line can enable Australian exporters to compete more effectively in the US market without tying up their working capital.
Liberty Mutual is a leading global surety bond provider and is also a qualified surety for US Government public works contracts. It can provide surety bonds for all US states, Puerto Rico and Guam.
Sudden shifts in currency’s exchange rates can seriously affect the profit margins of those companies doing business overseas. But fortunately, there is a tool for exporters to better manage their foreign exchange risk.
A foreign exchange facility can help exporters hedge against currency fluctuations, by locking in exchange rates. In that way, companies, which trade internationally, can better protect their profits.
EFIC’s foreign exchange guarantee agreement with HiFX aims to help Australian exporters to gain greater control in managing their exposure to volatile currency markets.
With the use of a foreign exchange facility guarantee from EFIC, HiFX provides another way of supporting Australian businesses manage their export growth.
For exporters, adverse movements in exchange rates are an inherent risk of doing business in international markets. A foreign exchange facility can help an exporter protect export profits from exchange rate fluctuations by locking in exchange rates and allowing them to hedge their currency exposure.
EFIC’s relationship with Travelex the world’s largest non-bank foreign exchange and payments specialist, aims to assist Australian SME exporters who find themselves unable to fully hedge their sales because they have reached the limit of their existing foreign exchange facilities.
With a foreign exchange facility guarantee from EFIC, Travelex can provide eligible exporters with higher foreign exchange trading limits without the need for additional security, allowing them to extend their hedging programs and better protect their export profits.