Letter of credit guarantee

The letter of credit guarantee is tailored to the applicable market conditions for letters of credit and processing is simple and rapid. EKN’s offer and guarantee are irrevocable. The applicant bank suggests a premium, which EKN considers when assessing the risk.

Letters of credit that can be guaranteed with EKN’s letter of credit guarantee

The letter of credit must comply with the ICC rules for letters of credit. Stand-by letters of credit are not covered by EKN’s guarantee.

The guarantee applies for letters of credit that are confirmed or guaranteed by a bank. For a letter of credit that is guaranteed, so-called unilaterally or silently confirmed, the guaranteeing bank must be the nominated bank.

The letter of credit must be payable/negotiable at the confirming bank. EKN can also give an irrevocable offer for so-called binding promises for letters of credit that have not yet been opened.

Apply for a letter of credit guarantee

Apply in good time, and no later than the first presentation of documents under the letter of credit or alternatively in conjunction with a binding commitment being made to the exporter.

A supplementary form from the exporter that describes the export transaction must be attached if the letter of credit has a credit period longer than 12 months. When you apply you may request to have the guarantee issued immediately or to receive an offer first. An application for an offer is free of charge.

Apply on EKN Online if the letter of credit is valid for no more than 12 months, or otherwise on a form.

On receipt of your application, EKN assesses the risk of the transaction and you thereafter receive an offer unless you have asked in your application to have a guarantee issued immediately. The offer states the premium, or in other words what the guarantee will cost you.

It is very important that you read EKN’s General Conditions as well as any supplementary conditions, prior to the issuance of your guarantee, so that you know what is applicable to the guarantee.

Guarantee

You can ask to have the guarantee issued immediately when you apply. Otherwise the offer will state the latest date for contacting EKN to request the guarantee. No form is required for this. The premium must be paid when the bank debits the exporter.

Non-payment

Non-payment by the opening bank must be notified to EKN immediately, and no later than 30 days after the due date. This notification of delay may be made on EKN Online or on a form.

In principle, EKN will pay compensation immediately after you have sent a request for claims adjustment to EKN. No form is required for this.