Due to the economic downturn, the financial pressures on export-oriented enterprises have become increasingly prominent, and more export-oriented enterprises have alleviated liquidity pressure by way of export financing. Banks that provide such loans often require effective guarantees on export financing, and export credit insurance is a common means of guarantee.
However, connected transaction and delivery of the goods cannot be identified in advance for export credit insurance, which has often caused controversy.
Identification of connected transaction. Connected transactions are always specifically excluded in insurance coverage under export credit insurance contracts. However, it’s more difficult to identify connected transactions in the export process than in domestic trade. It’s also hard to identify connected transactions with existing means of verification. The most common way of verification is to determine its relevance with domestic export enterprises through investigation of the investment and equity situations of the intended trading companies by lawyers of the country where the transaction is taken place.
You must be a
to read this content, please
Dai Yuxin is a senior partner and Chen Liang is an associate at Wintell & Co