Managing your cross - Border
Credit & Political risk
since 1994

About ICIEC in General

1) Do you have a preferred creditor status in Islamic countries?

ICIEC is a member of the Islamic Development Bank Group (IDB), a multilateral development financing institution that is collectively owned by 57 member states of the Organization of Islamic Cooperation (OIC). Like all other multilateral development banks, the IDB Group has a preferred creditor status enshrined in its articles of agreement which have been ratified by the parliaments of all its member countries. Chapter 7 of the Articles, which is entitled "Immunities, Exemptions and Privileges" clearly states (see Article 52) that the Corporation will be accorded all the corresponding immunities, exemptions and privileges provided for in Articles 53, 45, 55, 56, 57, 58, and 59 of the Articles of Agreement establishing the Bank.

2) Which are the member countries of ICIEC?

ICIEC has currently 44 member countries of the 57 OIC member states. Membership in the OIC or the IDB is necessary but not sufficient for a country to join the Corporation. In other words, a country that is already a member of the IDB is eligible for membership in ICIEC. However, it needs to go through a separate process consisting of ratification of the Corporation's Articles of Agreement and subscription to the share capital of the Corporation. The current list is growing and aims at having all the 56 OIC member countries as members of ICIEC. The full list of current Member Countries.

3) How is your relationship with IDB and other multilateral development institutions?

IDB owns 52.10% of ICIEC and the remaining 47.9% is divided among the 44 member countries. The other members of the IDB Group— The Islamic Corporation of the Development of the private Sector (ICD), The Islamic Research and Training Institute (IRTI) and the International Islamic Trade Finance Corporation (ITFC) —are sister entities of ICIEC and collaborate with it in achieving the 1440H Vision as well as the overall development goals of the IDB Group. In addition, ICIEC enjoys a close working relationship with similar multilateral development institutions, particularly the Multilateral Investment Guarantee Agency (MIGA) of the World Bank, the Asian Development Bank's Guarantees Program, The Arab Corporation for Investment Guarantee and Export Credit (Dhaman) and others.

Furthermore, ICIEC works closely with a number of national ECAs, both in its member countries and in the developed countries. For instance, the Corporation has an active reinsurance treaty with COTUNACE of Tunisia, Sheikan of Sudan, and ECIE of the UAE and others among national ECAs of member countries. It also has MoUs and close working relationship with NEXI of Japan and Sinosure of China. Finally, ICIEC is a full member of the Berne Union, the International Association of Credit and Investment Insurance, and the Prague Club. It is also the founding member of the Aman Union, which brings together the national export credit agencies (ECAs) of the OIC member countries.

4) What is the credit rating of ICIEC?

ICIEC is rated AA3 (with a stable outlook) by Moody's.

Regarding export credit insurance

1) What is the maximum amount that ICIEC can cover?

ICIEC maximum cover on its own books should not exceed US$ 40.9 million per contract and US$ 81.7 million per investment. However, ICIEC can always manage to cover larger transactions and investments with reinsurance support. Therefore, there is no limitation for ICIEC cover. The amount that could be covered depends largely on the risk appetite of ICIEC as well as of the reinsurance market for each transaction.

2) How does ICIEC re-insure itself for MLT export credit transactions?

ICIEC usually reinsures MLT export credit transactions on facultative basis through approaching brokers who contact major re-insurers and arrange the necessary reinsurance capacity with them.

3) How does ICIEC re-insure itself for ST export credit transactions?

ST export transactions are re-insured under a reinsurance treaty signed with Atradius and Catlin including limits per buyer, per country, etc. For certain transactions which are not covered under the treaty, a special approval could be requested from Atradius on facultative basis.

4) Is an Islamic export finance loan, provided by a conventional commercial bank (Non Islamic Bank) eligible for cover by ICIEC?

Yes. As long as the financing is structured in an Islamic way, it is eligible for cover by ICIEC regardless of the status of the bank (conventional or Islamic).

Regarding Investment insurance

1) What is the maximum amount that ICIEC can cover?

The maximum that ICIEC can cover under its investment insurance scheme is US$81 million per project.

2) What risks can be covered under investment insurance. Please explain in particular your investment insurance policy that provides coverage for both borrower and country risks (comprehensive cover)?

ICIEC comprehensive cover, also known as non-honoring of sovereign financial obligation (NHSO) provides protection against political risks as well as non-payment risk in cases where a sovereign is the obligor. The cover also applies to projects where a state-owned agency or a sub-sovereign such as a municipality is involved. It covers the usual political risks such as expropriation, non-transfer or inconvertibility, war and civil disturbance and other commercial risks that may lead to the default of a sovereign, state-owned agency or a sub-sovereign. It also covers non-payment of the sovereign for any reasons or even without a reason, provided the payment for which the obligor defaulted was a scheduled payment under a covered guarantee.

3) Would ICIEC be able to cover so called local costs (costs of a local construction company) in a project in an Islamic country?

Yes, provided these local costs are part of an overall project whose majority is foreign. In other words, there must be a cross-border flow of funds involved, which means local costs cannot be covered in a stand-alone fashion.

4) Would ICIEC be able to provide coverage for a loan to finance the cash payment (or down payment) that is required by ECAs under the OECD consensus. This cash or down payment is usually approximately 15% of the value of the exports to the Islamic country?

Yes, with the condition that there is more than exports or there is a project that the 15% down-payment is part of. If it is only exports, then the transaction cannot qualify for the investment insurance cover.