RISK MITIGATION: What are Updates & Proposals on Risk Mitigation Products?

Product Name Political Risk Insurance
Link to Product Website
Provider Name EDC (Export Development Canada) - Canada
Product Definition In some markets, political upheaval can happen overnight leaving your valuable assets unprotected against damage, seizure and expropriation. With PRI, you can choose coverage options that protect your business for many years against a host of political risks so that you can invest with confidence.

When your bank and potential investors support your expansion plans - but not the politically unstable country you’ve chosen - PRI can alleviate their concerns by safeguarding your assets against a range of political risks.

You can also direct the proceeds from your policy to your financial institution, giving it added comfort to grant you a new loan or extend your credit for a new project.

PRI has you covered in many situations:

PRI can insure you for up to 90 per cent of your losses resulting from the following political risks:

1. Breach of contract. Contracts can be broken when you least expect it—at significant cost to your business – when a foreign government doesn’t live up to its end of a contract or refuses to honour an arbitral award in your favour.

2. Creeping or outright expropriation. Unfortunately, foreign governments can seize, confiscate or expropriate your investment, sometimes without justification or an apparent reason.

3. Political violence. Terrorism, war, civil strife or other forms of political violence can damage or destroy your assets, or force you to shut down business operations for an extended period of time. Safeguard yourself against these risks.

4. Currency conversion or transfer. In times of economic crisis, foreign governments or central banks may impose restrictions on the conversion of the local currency to hard currency, or prevent hard currency from leaving the country.

5. Repossession. Foreign governments can prevent you from repossessing or re-exporting physical assets you have brought into the country (e.g. machinery, equipment, rolling stock, aircraft, etc.).

6. Non-payment by a government. Foreign governments may refuse or be unable to make scheduled loan payments or honour a financial guarantee, exposing you or your bank to non-payment risk.

With PRI you have the flexibility to choose the risks that you want to cover and pay premiums only on those risks. EDC's experts will work with you to customize a policy that’s ideally suited to your business needs, regardless of size of your investment or the industry in which you operate. You can choose the period of time for which you need coverage and you can cancel at any time.

To qualify, your operations must generate economic benefits to Canada (e.g. job creation, contribution to GDP). Companies operating abroad should be aware that EDC is subject to a number of provisions and guidelines governing international trade.

Product Type Political Risk Insurance
Defined Risks Covered n.a. More on Risks Covered
Eligible Form of Investments All
More on Eligible Investments
Eligible Currency of Underlying Investment Covered by this Product Both local and foreign currency
Eligible Countries & Regions All
Eligible Applicants PRIVATE: International Banks
PRIVATE: Companies headquartered in Risk Mitigation Provider Home Country
Eligible Sector No Specific Sector
Maximum Tenor 10+ to 15 years
Max. Absolute Amount (USD) 250+ MM to 350 MM
Max. % of Project Costs Covered 75+% to 100%
Max. % of Export Content Covered Over 85+%
Fees Market-based
Premium rates vary based on the type and number of political risks you insure and on a risk assessment that considers country, industry and transaction characteristics. Rates start as low as .25 per cent per annum.
More on Fees
Other Conditions Sovereign Counterguarantee: No
Anti-Corruption and Governance Standards: Yes
Environmental standards: Yes
Social standards (incl. Human Rights Standards; Labor Rights Standards): Yes
Source(s) http://www.edc.ca/forms/Admin/EN/Pages/Product-Inquiry-Form.aspx?lang=e&src=Insurance&code=Insurance&s_products=LeadGen;InsuranceInquiry_e;1;0&fromPage=NOTSET?CNT-INS-E
For more information, contact n.a.
Attachments n.a.
Additional Links www.edc.ca/EN/Our-Solutions/Insurance ... e-political-risk-insurance-assets.pdf
Deals n.a.

Provider Name EDC (Export Development Canada) - Canada
Institution Type PUBLIC: ECA
Ownership Government of Canada (a Crown Corporation)
Head Office Export Development Canada, 151 O’Connor, Ottawa, Canada, K1A 1K3
Provider Home Country Canada
Rating n.a.
Main Risk Mitigation Products Export Guarantee Program
Foreign Buyer Financing
Foreign Investment Financing
Supplier Financing
Account Performance Security Guarantee
Foreign Exchange Facility Guarantee
Surety Bond Insurance
Domestic Surety Bonding and Bank Guarantees
Attachments n.a.
Additional Links www.edc.ca/EN/Knowledge-Centre/Publications/Pages/default.aspx
Entered On: 06/29/2007 at 01:04 PM
Updated On: 05/08/2013 at 09:12 AM