Glossary

Agreement concluded between the government of the debtor's country and the French government under the terms of which the conditions for the reorganization of the debt of the debtor's country are set.

A general financial agreement to which one or more export transactions are allocated. Concluded between an entity in the exporting country or an international institution and an entity in the importing country, it defines the financing conditions applicable to separate contracts but having a common destination (same project or same buyer) or a common purpose, provided that these contracts meet certain eligibility conditions. Intergovernmental protocols, loans from international institutions, and lines of credit are framework agreements.

Any business entity that may be liquidated in the event of insolvency and may be sued in a court of general jurisdiction.

Any entity that represents, in any form whatsoever, the public authority itself and that cannot be declared bankrupt, either judicially or administratively, is considered a public debtor/purchaser. This may be either a sovereign debtor, i.e., an entity that embodies the full faith and credit of the State, for example, the Ministry of Finance or the Central Bank, or any other subordinate public entity such as a regional, municipal, parastatal, or other public body. The public status of the purchaser is specified by Bpifrance Assurance Export.

Payment upon order or during execution of a percentage of the amount of the export contract. This payment may be made in return for a bank guarantee.

Adjustment of the base price between the submission and the entry into force of an export contract in accordance with a contractually stipulated formula. The updated price is guaranteed under the same conditions as the base price and subject to the same financing conditions. However, the update entails the payment of a deposit for the additional order.

The approval defines the outstanding amount insured and the conditions attached to it, the effective date of the guarantee and the insured portion.

Texts voted by the OECD Council to encourage members, particularly in the context of export contracts receiving official support, to ensure compliance with international environmental standards and to take social impacts into account ("Common Approaches to Officially Supported Export Credits and Environmental and Social Due Diligence").

A method of settling disputes that may arise between parties to the same contract. The settlement of these disputes is not submitted to the ordinary courts, but to private individuals, "called arbitrators," appointed by the parties to rule on their dispute.

Arrangement on Officially Supported Export Credits signed in 1978. This arrangement, commonly referred to as a "gentleman's agreement," is based on multilateral surveillance of its participants. Its objective is to regulate public intervention in trade and promote transparency in order to maintain fair competition conditions based on technical and commercial, not financial, determinants. It defines the conditions (down payment, credit term, interest rates, repayment profile, premiums, etc.), the most favorable permitted. There are nine participants: Australia, Canada, the European Union (composed of all its members), Japan, South Korea, New Zealand, Norway, Switzerland, and the United States.

Maximum amount to which the guarantee will apply. It may correspond to all or part of the repatriable portion of the project or commercial contract.

Assistance and advice services provided to the buyer during the execution of the contract and/or at the end of the contract during the start-up and possibly the first months of operation of the installation. Technical assistance may or may not be provided by the person responsible for the construction of the work. It may be provided for in the export contract or be the subject of a separate contract.

Insurance technique applicable in the event of subcontracting, according to which the credit insurer of the main contractor (signatory of the export contract) and the credit insurer of the "subcontractor" agree to guarantee, each according to the usual terms of their policies, the part of the contract executed in their respective countries and agree to consult each other in the event of a claim.

In the context of a documentary credit, it is the seller's bank which, after receiving the documents from its client, verifies them and transmits them to the beneficiary (the issuing bank).

In the context of a documentary credit, it is the buyer's bank which, after receiving instructions from its client, proceeds to open the documentary credit.

Bank whose purpose is to carry out accounting, legal, tax, organizational and expert work on behalf of private companies.

Bank which, upon signing or entry into force of the commercial contract (in supplier credit) or the loan contract, receives from the borrower in place of the holder of the debt (the exporter or the lender), the payment instruments materializing the debt with an irrevocable mandate to deliver them to the holder of the debt in accordance with the terms indicated by a letter of instruction called a "common interest mandate".

In the context of a documentary credit, this is the correspondent bank of the issuing bank in the seller's country. It will notify the seller of the opening of the documentary credit in their favor. This bank is not necessarily the seller's usual bank.

Document by which the exporter/subscriber (the drawer) instructs his foreign client (the drawee) to pay a certain amount (the nominal amount) at sight or at maturity. A certain number of details are mandatory, including: the name of the bill of exchange, the mandate to pay a specific amount, the name of the drawee, the maturity date, the place of payment, the date and place of creation of the instrument, the name of the beneficiary and the signature of the drawer.

Refers to the prospecting budget granted by application of the Guaranteed Quota

One way to pay interim interest is to add it to the capital. This interest is then paid according to the credit terms applicable to the capital, which in fact increases the principal amount of credit granted to the debtor.

Default of payment by the debtor under the export contract or its financing due to the risk of non-payment. In the event of coverage for the risk of interruption of contract, the default may be extended to breaches by the buyer or the debtor of its contractual obligations during the manufacturing period.

There is a waiting period when the first principal repayment due date falls after the first interest repayment due date.

It commits the bank to paying a lump sum in the event of the seller's failure to meet its contractual obligations. The bank or insurer has the choice between compensating the client who suffers losses due to the breach of contract or finding another company to complete the work. The effect of the performance bond generally ceases upon provisional acceptance of the work by the client.

It guarantees the foreign buyer that the deposits paid will be refunded if the work is not carried out. The deposit takes effect from the receipt of the deposit by the exporter until delivery of the equipment, sometimes until provisional acceptance. Note, however, that it may be stipulated in the contract that each deposit can be automatically reduced as and when deliveries or the work is completed.

It takes over from the performance bond by covering construction or maintenance defects during the testing period between provisional acceptance and final acceptance of the works. The contract may mention a percentage of the contract amount that will be retained by the buyer as a guarantee, and paid to the exporter, only at the end of the contract. However, this retention of guarantee can be paid at the beginning of the contract guarantee period against the presentation by the exporter of a deposit called "retention of guarantee bond", guaranteeing all the contractual obligations of the exporter during the guarantee period of the equipment or construction. This guarantee will be called into play by the foreign buyer in the event that the equipment supplied or the construction carried out does not comply with the specifications or the finishes are imperfect.

In the context of contracts, foreign companies or governments use tendering procedures, or adjudications, to identify various potential international suppliers and select the best offer to execute their contract. The bid or award bond guarantee allows the foreign buyer to insure itself against the risk of non-conclusion of the contract. This bond guarantees that, once selected, the successful bidder will sign the contract and/or provide a performance bond. Its duration extends from the submission of applications to the acceptance of the export contract by the successful bidder.

Mechanism by which the creditor (the assignor) assigns to another person (the assignee) a claim which he holds against a third person called the assigned debtor.

Act by which a subsidiary assigns to its parent company the rights and remedies it has against a foreign debtor under the contract concluded with the latter. This technique allows the insured, when the contract is concluded by its subsidiary or jointly with it, to have, provided that the assignment is validly made and is enforceable against both the debtor and the drawees, a direct recourse against the final buyer. Bpifrance Assurance Export can then grant the insured coverage for the risks borne by the debtor, up to the fraction of the rights assigned to it.

Means the turnover, accumulated during the prospecting period and the franchise period, achieved directly or indirectly by the Insured and, where applicable, by its subsidiaries in the Guaranteed Zone

Clause inserted in the credit agreement which provides for the independence of the credit agreement and the commercial contract so that the failure of the exporter, its co-contractors or its subcontractors in the execution of the commercial contract cannot justify or excuse a failure of payment by the borrower under the credit agreement.

Clause by which any failure on the part of the debtor or the guarantor to fulfill an obligation arising from one of the credits may result, under the other credit, in an interruption of use and early repayment at the discretion of the lenders.

Clause inserted in credit opening agreements under which the borrower undertakes to delegate to the lenders the exporter's payments up to any amount that the latter may owe to him in connection with the execution of the commercial contract. The amounts thus delegated are used to amortize the buyer's credit, and in particular any arrears.

Clause under which a parent company makes a commitment to the State represented by the insured by the policy issued to it. This commitment is required from the insured so that the State can cover risks on an end buyer by allowing it to indirectly exercise recourse against the latter through the subsidiary.

Clause which provides for equal treatment between the parties involved in the obligations arising from a credit contract or a loan.

A group of public creditors whose role is to find coordinated and lasting solutions to the external payment difficulties of indebted nations. It works in particular in conjunction with the IMF and the World Bank. It defines, based on the characteristics of the debt of the country under review, the appropriate framework and conditions for rescheduling amounts owed to Paris Club members. The easing of external constraints resulting from the agreed payment deferral may, in the case of concessional rescheduling, particularly with heavily indebted poor countries, be reinforced by cancellation measures.

It corresponds to a cooperation mechanism between credit insurers covering an operation carried out by companies of several nationalities, all signatories of the commercial contract, to the members of a group within which the share of each in the execution of the contract is perfectly individualized. It is rarely formalized by a specific agreement, each credit insurer being able to guarantee its national share on the basis of direct rights. However, in the event of difficulties/claims, a consultation may be set up in order to coordinate risk management and possibly the exercise of recourse; this consultation may take place within the framework of specific agreements or within the framework of existing cooperation agreements.

Ratio used to reduce the basis of the guarantee on all or part of an export contract.

Remuneration for the bank's commitment to make funds available to pay the exporter. This commission is calculated on the unused balance of the credit and is generally due at the end of each quarter or half-year.

Remuneration to the bank for management fees resulting from the management and monitoring of the buyer's credit. Generally calculated on the nominal amount of the buyer's credit, it is collected in a single payment when the file is opened.

Interministerial commission, chaired by the General Directorate of the Treasury, which implements the policy defined by the minister(s) in charge of this DGT, in terms of financing and guaranteeing foreign trade operations and decides on the guarantee of the operations submitted to it.

Document produced by the insured to determine his loss according to the terms specified in the policy.

In buyer or financial credits, conditions or documents to be provided by the borrower prior to using the credit.

Irrevocable commitment made by the advising bank to pay the beneficiary of the documentary credit under the same conditions set by the principal as the issuing bank. These are generally cash payable transactions.

The framework contract defines the applicable general conditions. It is multi-export. It must be signed before the line opens. It defines reciprocal obligations.

OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of 17 December 1997. The OECD Convention is supplemented by the Recommendations of 2006 and 2009.

Exchange rate to which the State commits at the time of setting up the guarantee (quotation = birth of the risk). This is generally a forward rate (spot rate (ECB) + forward points based on interest rates (EUR/DEV) affected by a discount). It takes into account the initial validity period of the guarantee and the payment conditions (PMP).

Right of the creditor to demand from the debtor the execution of a payment: • by a buyer to a supplier of goods or services under a commercial contract, • by a borrower to a lender under a loan contract.

Creditor whose claim is not accompanied by any real security, that is to say that no particular asset of the debtor has been allocated to the payment of this claim in any way whatsoever (mortgage, pledge, general or special privilege).

Financial credit granted to a foreign borrower to enable them to pay, in cash, a certain fraction of the price of goods and services supplied by a French exporter. The risk of non-payment is borne by the lender, while the risk of contract interruption remains the responsibility of the exporter. If the customer agrees to pay its supplier in proportion to the expenses incurred during the execution of the commercial contract, the lender can make these progressive payments on behalf of the borrower, which eases the exporter's cash flow.

Process by which the first documentary credit established is offered to the advising bank as security for the issue of a second credit.

A commercial settlement process in which a bank undertakes, on behalf of and at the request of its client (the ordering buyer), to pay or have paid by another bank (the advising bank) a specified amount, within a set period, in favor of the beneficiary (the seller), against submission of documents, in particular those proving the shipment of goods ordered by the buyer to the seller. A documentary credit may be revocable or irrevocable, confirmed or not by a French bank.

This type of documentary credit is based on the issuing bank's irrevocable commitment to the seller to make or arrange for payment, provided the seller presents documents that comply with the buyer's instructions. The seller remains dependent on the commitment of a foreign bank and bears the risk of a country's cessation of payment due to a coup d'état, a natural disaster, or a change in exchange policy suspending foreign currency transfers. This documentary credit is less flexible for the buyer, as it cannot be modified or canceled without the agreement of all parties.

This documentary credit involves a double banking commitment. That of the issuing bank and that of a bank in the seller's country; generally, this is the advising bank. Confirmation may be requested by the issuing bank following the buyer's instructions; if this is not the case, the seller always has the option of requesting this confirmation, either from the advising bank or from any other bank. In all cases, the confirmation will allow the seller to be paid in his country, which eliminates the risk of non-transfer and reduces settlement times. It is obvious that this confirmation constitutes a banking service that the seller will have to pay for.

In the broad sense, credit granted to a foreign borrower. This expression is often used in a narrower sense to designate credit granted to a foreign borrower to enable him to settle, in cash, certain amounts due under an export transaction, such as down payments, local expenses, etc.

Credit granted by an exporter to a foreign buyer. The exporter retains the risk even if he obtains financing for his debt from a bank.

Credit for which there is an automatic reinstatement or renewal of the credit after the first use up to its maximum authorized limit. It can be cumulative, that is to say that the unused balance of a credit can be carried over to the following documentary credits.

Indirect sale of equipment to a financial company that leases it to the lessee. For the exporter, this transaction is equivalent to a cash sale; the latter does not have to worry about the risk of non-payment or exchange rate risk. For the importer, the main advantage is that leasing allows them to obtain new production tools, for example, without having to mobilize the full amount of the investment. The leasing company replaces the lessee for the purchase of the equipment and negotiates while taking into account the interests of the end user. These transactions can be handled either by French or foreign banks.

In a consolidation agreement, the cut-off date is the deadline for signing contracts whose credit maturities are consolidated under the agreement.

Refers to the date from which prospecting expenses are taken into account. This date is decided by more than one month before and more than two months after the date of filing of the Prospecting Insurance application.

Means the date of receipt by Prospecting Insurance request made by the Insured

Date stipulated in the credit agreement, beyond which no further use of the credit can take place.

Any buyer explicitly required by law to undertake to pay the debt on behalf of the State is sovereign, generally the Ministry of Finance (sometimes the Ministry of Defense) or the Central Bank. For other central government entities, a study must be conducted to confirm that it is fully guaranteed by the State.

Provision of the commercial contract providing, in the event of failure by the debtor to meet its obligations, for early payment of the portions of the debt not yet due.

In Export Guarantee Insurance, the Insured Issuer must report monthly online the line's consumption: new commitments issued and to be insured, commitments still in force and previously reported, and releases made during the month. In Export Pre-financing Insurance, the Insured Lender must report monthly the drawdowns made under the guaranteed pre-financing credit.

Invoice issued at the time of the settlement deadline that materializes the result. Document sent to the company to pay the compensation to the company or collect the profit repayment to be made by the company.

Integrated into the guaranteed forward rate, it completes the remuneration of the risk to be guaranteed.

Time limit set by the insurance policy and at the end of which the claim is considered to have been made and therefore compensable. This period varies depending on the event giving rise to the claim and the type of policy.

The application for approval is the document requesting the opening of the line. It must be signed jointly by the exporter and the issuer (guarantees) or the lender (pre-financing).

Description of the commercial transaction to be guaranteed and the guarantee requested. • INITIAL: 1st request submitted for a commercial project. • RENEWAL: request that replaces a current guarantee that is coming to an end for the same project. • SUPPLEMENTARY: request that supplements a guarantee issued and operational; it will have different characteristics but the same end of validity as the guarantee it supplements.

Means the Eligible Expenses incurred and paid by the Insured in the Guaranteed Area during the Prospecting Period; means new expenses (as opposed to expenses regularly incurred by the Insured before the start of the Prospecting Period)

Designates the prospecting expenses referred to in the Summary Statement of Eligible and Accepted Expenses less than the Guaranteed Budget

In Export Surety Insurance, the principal is the exporting company which asks the bank to issue a surety commitment.

Amount paid upon filing a certain type of warranty claim.

The credit term is understood to be from the date of the starting point of repayment of the credit in buyer or supplier credit and until the date of the last repayment due date of the credit.

12-month period granted at the end of the initial validity if the commercial contract has been registered but has not yet entered into force. (see “extension term points”)

Duration desired by the client and accepted by at least the conclusion of the commercial contract and notifying the event to Bpifrance Assurance Export*.

Payment planning declared upon entry into force. It sets the rate of settlement of the guarantee by liquidations.

Generic name for any promissory note transferable by endorsement and establishing the obligation to pay a sum of money at a given time.

Amount guaranteed to the Insured, it is defined in the approval.

Needs defined by the exporting company based on newly concluded contracts or commercial projects currently being negotiated. The annual budget may be revolving.

Discount which allows for the assignment of commercial receivables without the possibility of subsequent recourse by the bank against a company if the commercial instrument is unpaid.

Simple discounting is a cash advance made by a bank after it has verified that the right to payment is indeed opened by an approval of the debtor (depending on the case, acceptance of the goods delivered, approval of invoices, of a schedule, commercial paper, etc.) and that the law recognizes the debt.

Refers to all prospecting expenses paid and declared by the Insured appearing on the ERDE

Specific document whose content has been precisely defined in a World Bank operational manual (BP 4.01) included in the appendix to the OECD recommendation. It includes in particular a project description, a detailed description of the various expected impacts on the environment, an analysis of alternatives to the project, an environmental management plan and a report of public consultations.

Situations or events of a commercial, political or catastrophic nature that may trigger the guarantee. The detailed list of events that may cause a claim is included in the general conditions of the credit insurance policies.

Industrial projects involving infrastructure, energy, transport, telecommunications, the environment, mines, etc.) carried out by private law “project” companies currently being set up (or recently set up) and whose debt service must be covered by the revenues from the project itself, the lenders only have recourse against the project company and/or limited recourse against its shareholders.

Financing granted by an international institution such as the World Bank, the European Investment Bank, Arab funds, etc. Such financing, intended to promote the economic development of beneficiary countries, has the characteristic of being "untied", that is to say that its granting is not linked to the placing of orders in a specific country, the supplier normally being the successful bidder in an international call for tenders.

An unforeseeable, insurmountable, and external event that makes it impossible to perform the obligations arising from a contract and exempts the defaulting party from liability. It is common practice in international contracts for the parties, through an appropriate clause, to list the cases of force majeure, define their effects and financial consequences.

A technique in which banks or their specialized subsidiaries purchase, without recourse, any debt owed to a foreign client at a fixed price. In the event of non-payment, the "forfaiting" banker prohibits any recourse against the assignor or the previous beneficiary(ies). The exporter is thus freed from any risk.

The company or commercial negotiation. The effects of the guarantee then cease upon notification of the entry into force of the commercial contract: issue of a liquidation statement on the total amount of the contract.

Written commitment by the ordering supplier's bank and on its behalf, in favor of the exporter. The bank guarantee is autonomous, independent of the legal relationships existing between the parties under the basic contract which gave rise to it.

Official support provided by a government or on behalf of a government in the form of an export credit guarantee or insurance without financing rate support.

Irrevocable, unconditional and on-demand payment guarantee covering the total amount (principal and interest) for the entire term of the credit in the case of aircraft financing. This guarantee is unconditional (except in the event of non-compliance with reporting and administrative obligations) due to the absence of any event giving rise to a claim, the risk covered being the risk of non-payment of the debt, whatever the cause of non-payment.

Clause included in the “subcontracting” contract, under the terms of which the main contractor only pays the subcontractor to the extent that it has itself been paid by the foreign debtor.

Means an amount equal to the difference between (i) the Eligible Expenses Retained multiplied by the Guaranteed Quota and (ii) the Initial Provisional Compensation paid by Bpifrance Assurance Export to the Insured

Means an amount equal to the Guaranteed Budget multiplied by the Guaranteed Quota multiplied by 50%

Legally established inability of the debtor to meet his commitments, or a factual situation leading the insurer to conclude that payment, even partial, is improbable.

Possibility for the company to revalue the "cash" portion of the initial guaranteed rate for a commercial transaction by being interested in the improvement of the EUR/DEV rate observed on the foreign exchange market. The interest rate is set for NÉGO+ type guarantees at: 50 or 70%.

(SUPPLIERS CREDIT) In a commercial export contract, the interest paid by the buyer to the supplier who grants payment terms is freely set by the parties. It must, in principle, be calculated so as to correspond to the financial charges that the supplier will have to bear (remuneration of the discounting bank, cost of pre-financing and guarantees, possible premium, etc.).