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How EXIM’s Export Credit Insurance Protects U.S. Exporters from Political Risks
May 06, 2025 Ken Click, Business Development Specialist

EXIM is open for business in over 170 countries and supports small and large U.S. businesses through Export Credit Insurance (ECI) which enables eligible U.S. exporters to protect against the risk of international buyer nonpayment due to commercial and political risks. Examples of political risks – foreign government actions that prevent an international buyer from paying an invoice to a U.S. exporter – include:

  • Cancellation of an export or import license or import license invalidation; a law or decree preventing the importation from the consignee country
  • Currency transfer risk (currency inconvertibility), such as when an international buyer is unable to access U.S. dollars to pay its U.S. supplier
  • Expropriation or confiscation of assets
  • War, revolution, and insurrection

If an international buyer fails to pay due to one of these political risks, an insured U.S. exporter can file a claim with EXIM immediately (or EXIM can request that the exporter file a claim) then it will be processed within 60 days.

For exporters engaged in made-to-order manufacturing where products typically have a longer lead time and are customized to the buyer’s requirements, political risk coverage is available for Single-Buyer policies through EXIM’s Pre-Shipment endorsement. This policy endorsement provides additional protection for an exporter’s manufacturing costs, including costs incurred for its partially finished goods that are still a work-in-process or finished goods that have yet to be shipped from the U.S. to an international buyer. Coverage under the Pre-Shipment endorsement reimburses the exporter for these incurred costs, plus a small profit margin, when certain political risk events, such as cancellation or non-renewal of an import license, prevent shipment of the goods.

Under all EXIM policies, the insured exporter must confirm at the time of shipment that its international buyer can import its products. If a ban or regulation is instated before the shipment date and there is no Pre-Shipment endorsement on the policy, the exporter becomes ineligible for coverage. If the exporter has insured a shipment already in transit to an international buyer, and the buyer’s country imposes a ban or regulation preventing the entry of the exporter’s products after the exporter’s shipment date, the exporter is covered and could file a claim, provided all policy requirements and conditions are met. 

One requirement is that the policyholder, facing a political risk while its goods are in transit to an international buyer, must coordinate with EXIM’s Claims Processing Division to see if a course correction can be made to minimize loss. For example, the Claims Division could recommend that the insured goods be diverted to another buyer in a different country if practicable.

For more information about EXIM’s political risk coverage, please click here to schedule a consultation with an EXIM trade finance specialist.

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EXIM’s Blog postings are intended to highlight various facets of exporting, but the postings are not legal advice, and are not intended to summarize all legal requirements associated with exporting.