The Trade Bank of Iraq (TBI) has announced the completion of an agreement with the German government to guarantee exports from Germany to Iraq.

The agreement, which was signed by TBI and the Iraqi ministry of finance with Euler Hermes Kreditversicherungs-AG on behalf of the German federal ministry of economics and labour, allows for short term export credit insurance for German goods and services imported to Iraq.

Export cover

Under this agreement, cover for short-term German export transactions with Iraq will be provided so long as Iraq's ministry of finance and TBI issue a purchase authorisation to evidence their approval of each purchase to be financed.

All letters of credit (L/Cs) under this agreement must be issued by TBI.

The TBI and Euler Hermes say the conditions for this coverage will form the basis for further agreements with Iraq's other important trading partners.

L/C arrangements

Several global financial institutions support the TBI, primarily by issuing L/Cs externally on behalf of TBI to global exporters.

These banks have committed to stand by TBI until it is able to issue its L/Cs to world exporters on its own.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.