Authorizations, exposure, and country export data

• Covers risk of a foreign buyer or foreign bank failing to make credit payments
• Policy options:
• Direct trade credit insurance: Issued to exporter where exporter has been declined cover on a foreign buyer by a private trade credit insurer
• Top-up: Policy issued directly to the exporter seeking an increase to the buyer limit in excess of amount provided by private trade credit insurer
• L/C guarantee: Issued to exporter’s bank to confirm L/C issued by foreign bank
• Coverage:
• Direct trade: Between 80% and 90% for commercial and political risks
• Letter of credit confirmation: Up to 100% cover
• Excludes disputes
• Tenor: Maximum 360 days; usually less than 120 days
• Fees:
• Upon application approval, a premium is charged and must be paid prior to start of export contract
• Premium based on commercial risk, political risk, tenor, and payment structure of export transaction
• Minimum assessment fee NZD 500 per buyer limit

• Guarantee to supplier’s bank
• Use of proceeds typically to support:
• Seasonal, multiple, or large orders
• Purchase capital equipment to produce exports
• Cover cash shortfalls or delayed payments caused by buyers
• Offer operating leases to buyers
• Provide working capital until equity investments are secured
• Fees:
• Initial assessment NZD 1,000
• Per annum fee on guaranteed amount ranges from 4%–6%

• Covers loans made to foreign buyers against non-payment
• Tenor: Greater than 1 year; repayments in equal semi-annual installments
• Cover: Up to 95% political and commercial risk cover
• Premium: Priced according to transaction risks; payable in full upfront
• Application fee: Minimum NZD 2,000 or 0.05% of requested credit amount

• Covers production costs, net of profit margin and any advance payments which cannot be recouped by the exporter in the event of your the cancelling the contract
• This support is provided in conjunction with either the Short-Term Trade Credit Guarantee, or Export Credit Guarantee

• General bond guarantee:
• Issued to exporter’s bank/bond provider to cover losses if exporter fails to properly perform contractual obligations and the bond is called
• Cover: Up to 100% of the bond amount
• Types of bonds that are supported: Bid bond, advance payment bond, performance bond, and warranty/maintenance bond
• Fees: Premium based on assessment of credit and performance risks, typically 1.5%–3% per annum, and initial assessment fee NZD 1,000
• Surety bond guarantee:
• Guarantee issued to surety bond provider to cover losses if exporter fails to properly perform contractual obligations and the surety bond is called
• Cover: Typically, 100% of surety bond value
• Fees: Initial assessment fee of NZD 1000
• If NZECO approves the application, premium is not charged for an initial bid bond or bond ability letter in support of the exporter’s tender
• If an exporter is awarded a contract and surety bonds are issued, then NZECO will charge a premium against the surety bond amount
• General contract bond guarantee
• Financial guarantee which protects buyer from losses in the event exporter fails to properly perform contractual obligations
• Cover: Typically, 100% of bond amount

• Eligible companies must be registered in New Zealand or be an international subsidiary of a New Zealand registered company

• Insurance policy does not cover contract cancellation or non-payment resulting from exporter’s negligence or a contract dispute unless the exporter obtains a judicial or arbitration judgment in their favor

• Anti-bribery declaration

• The maximum aggregate liability is NZD 740 million

• Eligibility:
• Written evidence by exporter to demonstrate that there are New Zealand economic benefits arising from the underlying exports
• New Zealand registered company

• The credit term should not exceed the economic life of the exported good

• NZECO does not offer 100% political and commercial risk cover in respect to trade credit insurance for open account terms

• Currencies: NZD, AUD, USD, CAD, EUR, JPY, CNY, and GBP