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ANNOUNCED AS TEMPORARYNo
On 9 February 2011, the UK Export Finance authority announced it would introduce new export support measures. These included:
Introduction of the Bond Support Scheme
On 31 March 2011, the UK government introduced its Bond Support Scheme providing partial guarantees to UK banks for export financing. In cases where banks issue bonds for export contracts, the scheme will guarantee up to 80% of the bond value. The facility will be managed by the UK Export Finance authority (UKEF).
The official statements by the government did not mention the size of the guarantees, nor did they specify any minimum or maximum value of the bonds. However, the concerned exporters will be required to carry out business within the UK and the export contract have to contain at least 20% UK content.
Introduction of the Export Working Capital Scheme
Furthermore, the Export Working Capital Scheme was introduced. It assists exporting companies to obtain working capital finance by partially (maximum 80%) guaranteeing the credit risks associated with the export working capital facilities. The eligibility criteria of the programme include operating in the UK as well the export contract containing at least 20% UK content.
This programme was updated on 10 July 2015 to also include those entities supplying the exporting companies (cf. Related Measures).
Development of the Foreign Exchange Credit Support Scheme
The announcement of 9 February 2011 also included the development of a "foreign exchange credit support scheme to facilitate exporters' management of their exposure to foreign exchange rate movements, where exporters have taken out another ECGD 'Export Credits Guarantee Department' product, by sharing risks with banks."
In the Annual Report 2010-2011 of the ECGD (p.19), it has been mentioned that the programme has been launched. However, the report does not provide any further details.
Expansion of the Short Term Credit Insurance Product
Finally, the short term credit insurance product was extended to include a larger scope of exports. Previously, only the programme was restricted to exports of capital and semi-capital goods with that limitation being scrapped.
The scheme allows exporters to insure themselves against the risk of not being paid under an export contract. The programme applies to contracts with a maximum duration of 2 years. Exports to EU and high income countries (except for Greece) are not eligible for this product.
The list of affected tariff lines and sectors is based on the industries mentioned in the ECGD 2010-2011 report.
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