Belgian export credit agency Ducroire/Delcredere (ONDD) has reduced its premiums for the cover of bank guarantees (bid bonds, advance payment bonds, performance bonds, retention money bonds,and so on) issued in connexion with export transactions. Bank guarantees are insured by ONDD against the risks arising from unfair calling of the guarantees by the beneficiary or a call which may be attributed to political events.

Until recently, a uniform premium was applied to the cover of guarantees, irrespective of the country of the beneficiary.

By differentiating the premiums according to the country classification, there is a substantial reduction in the premium for the risks on countries classified in category 1 to 5; a status quo for countries in category 6 (10 countries); an increase for countries in category 7 (off cover: 4 countries).

The calculation formula is still based on the validity period of the guarantees.

For guarantees denominated in a currency other than euro, the premium is increased by 5% (10% previously).

To illustrate the impact of the new premium system, see below some examples of percentages applicable to the amount of guarantees with a validity period of six months.

Poland  (cat. 1)  0.26% instead of 0.65%
Turkey  (cat. 2)  0.33% instead of 0.65%
Brazil  (cat. 3)  0.39% instead of 0.65%
Russia  (cat. 4)  0.46% instead of 0.65%
Nigeria  (cat. 5)  0.52% instead of 0.65%
Cte d’Ivoire  (cat. 6)  0.65% (inchang)
Iraq  (cat. 7)  0.98% instead of 0.65%