Counter guarantee - EKN

Counter
guarantee
Guarantee holder: bank
EKN’s counter guarantee covers the recourse risk on the exporter if the beneficiary of a contract
guarantee makes a request for payment under that guarantee. This guarantee protects against
events that occur from the date on which the contract guarantee is issued.
With an EKN guarantee, the issuer, normally a bank,
receives compensation from EKN if the exporter fails
to pay the bank’s recourse claim.
TRANSACTIONS THAT CAN BE GUARANTEED
The counter guarantee can cover various types of
contract guarantee, including advance payment and
performance guarantees. These are normally ondemand
guarantees, where the beneficiary is entitled
to demand payment from the bank without giving a
reason.
The bank can apply for a counter guarantee for
different types of foreign transactions associated with
the export of goods and services.
A prerequisite for EKN’s participation is that the
transaction promotes Swedish interests and is connected
to Swedish export. This means the export
trans action will normally relate to Swedish products,
although transactions that indirectly lead to Swedish
exports may also be acceptable.
RISKS COVERED BY THE GUARANTEE
The guarantee protects the bank’s recourse claim
against the exporter. This applies whether or not the
exporter has discharged the obligations under the
purchase agreement.
HOW DOES THE GUARANTEE WORK
EKN’s share of the recourse risk is normally 75 per
cent of the amount issued, while the bank’s share is
25 per cent.
There must be an underlying sales contract, normally
an export contract, in order for EKN to be able to guarantee
a contract guarantee. The exporter describes this
in the exporter’s appendix, which must then accompany
the application from the bank.
EKN’s guarantee never covers more than what has
been agreed in the contract guarantee, as described in
the application to EKN.
WHAT ARE THE FEES
EKN charges a premium, which reflects the transaction
risk. The premium is expressed as a percentage of the
guaranteed amount.
The premium can be paid in advance when the guarantee
is received or in instalments during the term of
the counter guarantee, usually quarterly in advance.
EKN normally bases the premium on the bank’s price
for the issued contract guarantee. If the entire premium
is paid in advance, there is a deduction of 10 per cent.
There is no fee for applying for a guarantee and
receiving an offer. Our offer is valid for six months.
After this period, the offer can be extended for periods
of three months in return for a fee. If the offer results
in a guarantee, the extension fee will be returned.
The minimum premium is SEK 1,500.
WHEN DOES EKN PAY COMPENSATION
EKN pays compensation within 30 days of the bank’s
verification of the right to compensation. Interest is
paid on the amount to be compensated from the date
of the bank’s payment to the beneficiary to the date of
payment from EKN.
2013-03

LEON AB
CURRENCY
The currency of the contract guarantee determines
the currency in which EKN issues the guarantee.
If the currency is Swedish kronor, euros, US dollars,
Swiss francs or Japanese yen, EKN will issue the
guarantee, invoice the premium and pay compensation
in this currency. For other contract currencies, EKN
issues the guarantee, invoices the premium and pays
com pensation in Swedish kronor.
SECURITY
Specific security, such as funds in escrow, is shared
pro rata with EKN in the event of non-payment, while
general security already entered into, such as sureties
and corporate mortgages, normally is not necessary to
share with EKN.
CORPORATE RESPONSIBILITY
IN THE ISSUING OF GUARANTEES
EKN promotes corporate responsibility. In its guarantee
operation EKN’s considerations include the environment,
human rights and labour rights, anti-corruption and
the promotion of sustainable lending to poor countries.
EKN’S GENERAL CONDITIONS
The guarantee is governed by EKN’s General Conditions
for Counter Guarantees (November 2004).
HOW TO OBTAIN A GUARANTEE
All the relevant forms can be found at www.ekn.se.
Apply
Apply well in advance of the date on which the contract
guarantee is issued.
Make sure your application is accompanied by the
exporter’s appendix.
EKN makes a risk assessment, and if the result is
satisfactory, we make an offer.
Notify us
Notify EKN when the contract guarantee has been
issued and you want EKN’s counter guarantee to be
issued. The request must be sent within 30 days of the
contract guarantee being issued. If the contract guarantee
has already been issued when you apply, you can
notify EKN instantly that you want EKN’s guarantee
to be issued.
Pay the premium
EKN will send a premium invoice with the guarantee.
The premium must be paid within 30 days of the
invoice date. If you choose to pay the premium in
instalments during the term of the counter guarantee,
you are responsible for ensuring the premium is
paid in time.
The Swedish Export Credits Guarantee Board
Kungsgatan 36, P.O. Box 3064, SE-103 61 Stockholm | Telephone +46 8 788 00 00 | www.ekn.se