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MALAYSIA EXPORT CREDIT INSURANCE BERHAD In international Trade, exporter faced most risk compared to importer.

Some risk like theft and loss in transit. In Malaysia, the body to in charge for insurance is MECIB (Malaysia Export Credit Insurance Berhad). Established in 1977 and wholly owned by bank Industry Malaysia Berhad. Ob jective ares are to promote and develop Malaysia export by providing insurance coverage against risk related to international trade. Services offer:a. Insurance policies Comprehensive policy (shipment) Comprehensive policy (contracts) Comprehensive policy (service render) Banker comprehensive policy (shipment) Specify policy (shipment) Specify policy (contracts) Guarantees The bankers export finance insurance policy The confirming bank policy The bond issue support policy The overseas investment guarantee scheme

b.

FEATURES OF COMPREHENSIVE POLICIES AND THE BECIP COMPREHENSIVE POLICIES Intended to provide cover for all of an exporters business under certain categories. Export tangible goods cover from the moment the good as are shipped or from the moment each commercial contract is signed. The short insurance coverage covers a period of 180 days but for special case the period is extended to a maximum of two tears 3 Types: Shipment Policy Contract Policy Service rendered policy SHIPMENT POLICY It is classified under the buyer risk (commercial risk) and countrys risk (economic and political risk). Under each type of risk covered are as follows:(i) Buyers risk Buyers insolvency Buyers payment default Buyers refusal to accept toe goods delivered to him Countrys risk Blockage or delay in the transfer of payment

( ii )

Imposition of import restrictions Cancellation of importation license War between the buyers country and Malaysia War, revolution and civil disturbance in the buyers country Default by government buyer Other losses beyond exporters control Coverage 90% for exporters losses under commercial risk 95% for losses due to political related losses For payment claim, it is base on certain point of time and the time is varies based on the type of risk that led to the claim:Upon the buyers insolvency, payment is immediate upon proof of insolvency Where default arises because the buyers has refused to pay, MECIB will pay out one month after the due date of payment If buyer refused to accept the goods, MECIB will pat out one month after the goods have been resold or disposed of. If transfer delay, MECIB will pay out four month after the buyer has deposited the amount which he wants his bank to remit. BANKERS EXPORT FINANCE INSURANCE POLICY (BEFIB) Covers the bank against default or no payment in relation of loan. Objective is to stimulate Malaysian export reduce the bank risk. Restrictions on coverage once the following are satisfied:Where pre shipment Export Credit Financing or non ECR used in relation to the purchase, manufacture or packing of goods. Where Post Shipment Export credit Financing or non ECR by way of discount, purchase or negotiation of document or advance against invoice under export contract. ECR PRE SHIPMENT Criteria Product not included under finance cannot be applied (called negative product) Product sold must have minimum value added (VA) of 20% of cost of input used. Product being sold must have a minimum domestic raw material / input content (DA/IC) of 30%. Product exempted from VA and DRA/IC under BNM guidelines. Live animal, vegetables, prepared foodstuff, rubber product, wooden products, textiles and base material. If offset arrangement cannot used ECR. METHOD OF FINANCE

Order Based method Exporter should have either purchase order or contract of sales or foreign letter of credit. Eligibility, 80% of export orders. Certificate of performance bond Only available to direct exporter. It is a recommendation from bank to BNM.