On December 20, 2016, the Cabinet of Ministers approved Cabinet Regulation No. 866 "Procedures for Granting Short-Term Export Credit Guarantees to Merchants and Corresponding Agricultural Service Cooperatives." These regulations establish the conditions for the provision of guarantees for settlement of short-term export credit transactions for merchants and agricultural service cooperatives.
Export credit guarantee, also known as export transaction insurance, is a support mechanism for exporters to protect their business against foreign buyer insolvency or prolonged non-payment in cases of deferred payments. It also provides assurance for financing. Export credit guarantees can serve as additional security or buyer insurance for banks, leasing companies, or factoring companies when they are unable to cover the risks of buyer insolvency or prolonged non-payment themselves.
In Latvia, state support for export transactions in the form of financial instruments is provided by the financial institution Altum. Altum enables economic operators engaged in export activities to obtain export credit guarantees, thus safeguarding against foreign buyer insolvency or prolonged non-payment when selling goods or providing services with a deferred payment term not exceeding 730 days. However, for agricultural product export transactions, the deferred payment term cannot exceed 547 days, and the transaction amount with a single debtor must not exceed 2 million euros.
Additional information on export credit guarantees is available here.