Debate persists on when an independent undertaking is issued: upon leaving the issuer’s control or only when advised to the beneficiary. Various rules clarify issuance timing.
The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a segment of the Islamic Development Bank (IsDB), has signed a USD 42 million Facultative Reinsurance Agreement (FRA) with the Saudi EXIM Bank.
The arrangement provides support for trade transactions through a Documentary Credit Insurance Sub-Policy Limit in favour of Riyad Bank with a tenor of up to 12 months.
Under the FRA, ICIEC will provide Shariah-compliant reinsurance for up to 70% of Saudi EXIM Bank’s exposure under a Documentary Credit Insurance Policy Commercial and Political Risks (Multi Risk) issued to the Original Insured entity up to the agreed Credit Amount Limit.
As explained in an ICIEC news release,
“the Sub-Policy enables coverage of LCs confirmed by Ryiad Bank for several Saudi commercial banks. It will also provide additional headroom capacity for the confirmation of LCs to support trade transactions by commercial banks in Saudi Arabia and ICIEC Member States.”
Debate persists on when an independent undertaking is issued: upon leaving the issuer’s control or only when advised to the beneficiary. Various rules clarify issuance timing.
On 15 Feb 2023, DCSA members pledged to issue 50% of bills of lading (B/Ls) electronically by 2028 and 100% by 2030, aiming to cut costs and boost global trade.
