L/C Guarantee requirements and conditions

What does an L/C guarantee cost?

​Your company's bank pays a premium for an EKF L/C guarantee. Contact EKF's advisors for an indication of the premium.

Who is eligible for an L/C Guarantee?

Danish and foreign banks confirming letters of credit are eligible for an L/C Guarantee.

How much does an L/C Guarantee cover?

No limit applies to the amount covered by an L/C Guarantee, and the guarantee applies until the payment covered by the letter of credit has been made. However, the credit period may not exceed two years. If the credit period exceeds two years, please select EKF's Financing Guarantee instead.

What does EKF cover?

EKF pays compensation if your company's bank makes a loss on an export order as a result of commercial or political risk.

  • Commercial risk occurs if your buyer's bank is unable to pay due to, for example, liquidation or insolvency.

  • Political risk occurs if your bank does not receive payment from the foreign buyer's bank due to impediments in the country you are exporting to. Such impediments include war (external armed conflict and domestic political violence), currency shortage, restrictions on use of currency, import or export bans, and interventions by local authorities that make it impossible to receive payment for the products.

EKF normally covers between 50 and 95 per cent of the bank's loss, so the bank's deductible is a minimum of 5 per cent.

Environmental and social sustainability requirements

When your company's business with EKF totals more than DKK 25 million we assess your company's approach to the environment and human rights.