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The export credit agencies of Australia and Japan have joined forces to assist exporters in securing overseas contracts where both countries are involved as suppliers.

Export Finance and Insurance Corporation (EFIC) has signed a reciprocal reinsurance agreement with Japan’s export credit agency (ECA), Nippon Export and Investment Insurance (Nexi).

The agreement is a framework for close cooperation between the two ECAs in providing insurance support for overseas contracts involving capital goods and/or services from Australia and Japan. 

“The aim of this agreement is to provide Australian and Japanese companies working together in an export contract with a “one-stop “service from either EFIC or Nexi when seeking export credit cover,” says Chang Foo, head, product management and risk transfer for EFIC. 

Under the arrangement, the main supplier of the goods or services of an export contract can approach its ECA and be offered cover for the whole contract. The ECA acting as Lead Insurer then can seek reinsurance from the other ECA for its portion of the contract. The arrangement vastly simplifies cover arrangements for exporters in both countries.

This reinsurance structure not only streamlines the export credit negotiation and documentation process for Australian and Japanese exporters and their overseas buyers, but also offers cost savings because there is only one credit package, from one agency – either EFIC or Nexi.

“The alliance with Nexi is another step in EFIC’s continuing efforts to assist Australian exporters in participating in multi-sourcing contracts, and to explore other export markets by tapping into the schemes of other ECAs,” adds Foo.