The Export Credit Guarantees Department is concluding detailed discussions with the banks and UK exporters and on the verge of giving the green light to the launch of its much-heralded L1 billion Letter of Credit (LC) confirmation scheme. The premise of the scheme is simple: UK taxpayers money is being used as a guarantee to UK banks who confirm LC from overseas banks in favor of UK exporters. The British Exporters Association states that it has no objection to the proposed scheme. However, because such a tiny portion of exports are transacted on LC terms -- possibly as few as 10% -- and because of those only a small percentage are required to be confirmed for payment in the UK, it believes that it will not have any meaningful impact on exporting.
Impact of new LC confirmation scheme called into doubt Anonymous Credit Management; Nov 2009; Docstoc pg. 7 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
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