Potential commercial and political risks can become a reality to U.S. exporters, and those covered under an Export Credit Insurance policy should be aware of EXIM’s timeline and claims documentation requirements. The claim filing period begins when the foreign buyer’s payment is 90 days overdue (past the invoice due date) and the insured exporter has up to 240 days past the invoice due date to file a claim – a very long period. If a claim is filed, the exporter must furnish several documents to EXIM within this period to show the transaction in question is legitimate. These documents, known as the buyer obligation, are listed in the Claims Documentation Requirements.
The first of these three buyer obligation documents is an international purchase order. It is sent from the exporter to the foreign buyer and details exactly what’s being ordered. The purchase order includes agreed-in-advance information such as product quantity, product description, unit price, and total price; additional charges; and payment terms. It’s usually signed by the exporter and foreign buyer and commences the transaction.
The second buyer obligation document is the bill of lading. It includes the origin and destination of the goods sold, quantity and description of the goods, pick up dates of the goods, Incoterms, and delineation of shipping costs between the exporter and importer. An unaffiliated third party such as an ocean carrier issues the bill of lading, unless EXIM approves otherwise.
The final document is an invoice – a request for payment sent by the exporter to the foreign buyer after the goods are shipped. This document, clearly denoted as an invoice, has matching information from the purchase order.
These three documents – the international purchase order, bill of lading, and invoice – comprise the buyer obligation. To finalize a claim package, evidence of at least one written demand for payment and payment (ledger) experience with the buyer are also needed. Please note these document descriptions do not constitute legal advice and are simply meant to be a general introductory reference tool. For more information about Export Credit Insurance, please contact an EXIM trade finance specialist.
