- Bank 1 (does not need to be a Norwegian bank) approaches GIEK in connection with exports from a supplier in Norway to a foreign buyer. Bank 2 (which is a foreign bank) is responsible for the buyer being able to pay the Norwegian exporter.
- The Norwegian exporter might not wish to cover the credit risk associated with the sale. The exporter then approaches his or her bank (bank 1) and requests that it provides the payment for the delivery.
- Bank 1 covers the risk related to the foreign bank providing the payment. GIEK is normally able to offer up to 50 per cent risk coverage of the risk that bank 1 has in relation to bank 2.
GIEK is able to guarantee for confirmed Letters of Credit in connection with export of goods and services from Norway. GIEK can also, following a separate application, cover exports from the subsidiary company of a Norwegian company or export from a third country where the main contractor (the beneficiary) is a Norwegian company.
GIEK normally covers 50 per cent of the bank’s risk. However, for individual countries we can cover a higher share of the risk. The guarantee applies to GIEK’s share of the loss the bank might suffer, as a result of the guaranteed amount not being paid by the issuing bank on the due date. It also applies to interest corresponding to the bank’s interest charges from the day the bank makes the payment until compensation from GIEK is provided.
Please contact GIEK for more information about this product.
