Our recent blog post provided information about EXIM’s policy endorsements which can expand or change policy coverage for U.S. exporters. Some policy endorsements can be modified through the use of special policy conditions which provide further coverage for unique, one-off situations. Special policy conditions, like endorsements, can be requested through EXIM Online, an application and reporting system. EXIM-registered brokers can provide guidance about utilizing them.
Below are several examples when special policy conditions could be used either with a policy endorsement or as a standalone amendment:
- Invoicing International Branches or Divisions of a Foreign Buyer: Some foreign buyers ask U.S. exporters to invoice a different branch or division other than their international headquarters. For example, the engineering department of a foreign buyer’s main office places an order with a U.S. company but asks the exporter to send the invoice to an alternative international company branch. A special condition added to an EXIM policy allows the U.S. exporter to fulfill this type of request while receiving the same level of risk protection in the event of buyer nonpayment.
- Different International Billing and Shipping Locations: A U.S. company could obtain a policy endorsement that approves a specific foreign buyer, and the special condition allows the U.S. exporter to ship its products to a different country other than the one where it’s billing the foreign buyer. An example is a U.S. exporter billing an approved foreign buyer’s headquarters in New Zealand for products shipped to Japan.
- Product Delivery to Foreign Buyers in U.S.: Some foreign buyers prefer to take possession of their products at a U.S. port of entry such as Miami, Florida or Laredo, Texas and handle delivery to the final international destination. This policy condition permits a U.S. exporter to deliver its products to a foreign buyer, or an authorized representative of the buyer, at a location in the United States.
- Political Risk Only Coverage: EXIM policies are designed to cover both commercial and political risks; however there is a special policy condition that provides political risk only coverage. Examples of only political risk include the inability of the foreign buyer to obtain the currency needed to pay the U.S. exporter (currency transfer risk), cancellation of an export or import license, and expropriation.
EXIM’s special policy conditions are intended to accommodate the unique needs of U.S. exporters. If you would more information or to be connected with an EXIM-registered broker in your area, please schedule a free consultation with an EXIM trade finance specialist.