The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) and Saudi Export Import Bank (Saudi Eximbank) have signed reinsurance agreements to help facilitate trade finance flows into and out of the kingdom. The agreements see ICIEC provide reinsurance to Saudi Eximbank's cover of confirmed letters of credit (L/Cs).

The ICIEC has also signed an agreement with UAE-headquartered Tabarak Investment Capital for a documentary credit insurance policy that will provide greater insurance cover for the export and import of Shariah-compliant goods and services .

Saudi Eximbank

Under its agreement with Saudi Eximbank, ICIEC reinsurance will provide protection against the commercial and political risks of issuing banks in ICIEC member states.

The agreement covers L/Cs confirmed by Bank Al Bilad and Arab National Bank and aims to create additional capacity for Saudi Eximbank to support Saudi Arabian exporters and importers of essential goods and services.

The combined approved limit for the reinsurance agreements is US$138 million over a 12-month period.

Tabarak cover

The approved limit for the policy under which ICIEC provides cover to Tabarak is US$100 million over a 12-month tenure.

The policy covers commercial and political risks of issuing banks with the aim of enhancing Tabarak's capacity to expand its trade finance support in the UAE. It applies to the confirmation of irrevocable L/Cs by the private equity firm in ICIEC member states.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.