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In giving credit to your overseas buyers, you are immediately exposed to possible loss of not being paid. Meanwhile, exporting in new and unfamiliar markets with high economic and political risks even on Irrevocable Letter of Credit terms does not give you a high comfort level of getting paid. The protection you need from your risks is the Comprehensive Policy of EXIM Bank.

Risk Covered

Buyers Risks (Commercial)

Country Risks (Economic & Political)

	Buyer's insolvency
	Buyer's payment default
	Buyer's failure to accept goods, subject to certain conditions.

	Blockage or delay in the transfer of payment;
	Imposition of import license;
	Cancellation of import license;
	War between buyer's country and Malaysia;
	War, revolution and civil disturbances in the buyer's country;
	Default by government buyer;
	Any other causes of loss outside Malaysia beyond the exporter's control.

The occurrence of any these events may result in non-payment. Any loss may erode your profits and your working capital. This in turn would adversely affect your ability to repay the bank which had discounted your export bills. In short, to export on credit terms with credit insurance cover is a prudent decision.

What is Comprehensive Policy?

The Comprehensive Policy provides an "umbrella" cover for exporter who make regular exports on credit to overseas importers who make regular exports on credit to overseas importers up to 180 days. The policy also covers export directly from supplier’s countries to their destination without passing through Malaysia (third country export). There are two types of policies: the Comprehensive Policy (Shipments) providing cover to exporter from the date of shipment and the Comprehensive Policy (Contracts) providing cover from date of contract. The latter is suitable where there is possibility of losses stemming from frustration of contracts in the pre-shipment period.

What is the Percentage of Cover?

Commercial Risk 90% and Non-Commercial Risk 95%. In case of non-acceptance cause of loss, the exporter is to bear the first loss of 20% of the GIV while EXIM Bank bears 90% of the balance of loss.

When will Claims be Paid?

Causes of Loss

Date of Ascertainment of Loss

Buyer's insolvency

Immediately

Default in payment

6 months after due date of payment

Non-acceptance of goods

1 month after goods are resold

Transfer Delay

4 months after buyer deposited payment in hi currency

Others

4 months after date of occurrence

However should a trade dispute arise as to liability for payment by the buyer, the dispute must be settled between the exporter and the buyer before EXIM Bank will consider a claim.

What is Premium Rate?

Premium rates primarily depend on EXIM Bank’s grading of the market with which the business is done and terms of payment. In general, the riskier the market and the longer the credit terms, the higher the premium.

Tax Relief

Risk premium paid in respect of EXIM Bank's Comprehensive Policy is eligible for double deduction tax relief under Section 33 of the Income Tax 1967.

What are the types of exports covered?

The Comprehensive Policy covers export of goods wholly or partly manufactured in Malaysia and third country export. All shipments made under contracts concluded on payment terms of Irrevocable Letter of Credit (ILC), Documents Against Payment (DP), Documents Against Acceptance (DA) and Open Account (OA) are insurable.

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