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APCIORP signs documentary credit insurance policy with ICIEC.

Arab Petroleum Investments Corporation (APICORP) has signed a Documentary Credit Insurance Policy (DCIP) with the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank (IDB) Group.

The Documentary Credit Insurance Policy will help APICORP effectively manage risks affecting its Letter of Credit (LC) transactions and LCs of petroleum products exports in ICIEC member countries. The DCIP is an effective tool to mitigate risk of non-payment of Letter of Credit (LC) arising from a variety of factors. These include insolvency of the buyer/ issuing bank; failure or refusal of the issuing bank to provide reimbursement on due date; currency inconvertibility and transfer restrictions imposed by issuing bank's country; expropriation, confiscation or government intervention in the business of the issuing bank; and war or civil disturbance in the issuing bank's country. The DCIP provides insurance coverage to transactions in which a minimum of 30 per cent of the added value in the products transacted come from ICIEC member states.

Ahmad Bin Hamad Al-Nuaimi, Chief Executive and General Manager of APICORP said, "We are extremely happy to advance our cooperation with the IDB's ICIEC by signing the DCIP. Trade finance forms an important focus of our diversification strategy and contributes significantly to our mandate to support Arab energy industry development.The DCIP will help us reliably protect and controlrisks in trade finance transactions, which in turn will help us better support the trading needs of Arab energy companies and enhance our trade-finance business growth. The ICIEC's extensive geographical remit and its mandate to encourage exports from member countries, some of whom are our own shareholders, make it a highly strategic partner for us. Partnerships like these are keyto our ability to expand our trade finance business and create value and growth for energy companies in the region."

At the signing ceremony, Dr Abdel-Rahman El-TayebTaha the Chief Executive Officer of ICIEC stated: "Events in the region show clearly the important role Credit and Political Risk Insurance can play in supporting trade and attracting foreign investment into countries which need it the most. We are confident that the signed policy will help APICORP in mitigating risks related to the default and non-payment of Letters of Credit confirmed by APICORP and thereby help to expand their trade transactions and ultimately increase exports from member countries." Dr. Taha added: "This signed DCIP between ICIEC and APIRCORP is the first signed between ICIEC and a joint Arab Financial Institution and represents a beneficial alliance between two sister multilateral institutions."

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Publication:CPI Financial
Date:Nov 20, 2013
Words:434
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