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Generally EDC looks at a number of factors before agreeing to provide FXG support.
- Exporter's managerial, technical and financial capabilities;
- Previous forward contract activity;
- Exporter’s typical buyers and aged receivables listing;
- Current conditions and economic outlook in the buyer's country; and
- Acceptable Canadian benefits in the goods or services, or other significant benefits to Canada.
Indemnity to EDC:
As part of the Application process, the exporter must sign an Indemnity agreement in favour of EDC. This is included on the FXG Application form.
EDC needs the following information from the exporter in order to consider a Foreign Exchange Facility Guarantee:
- Completed EDC Application and Indemnity (signed by the exporter) (see Forms);
- Completed General Information Checklist (see Forms); and
- Completed Questionnaire on Corporate Capabilities (see Forms).
The Process:
- EDC receives the signed Application and Indemnity;
- If approved, EDC will issue a letter of offer to Scotiabank, along with a copy of the guarantee which is also copied to the exporter. The letter of offer will include an indication of the FXG fee and payment due date. EDC can be paid directly by either the exporter or the Bank;
- Bank returns the letter of offer, duly signed by the Bank;
- Upon receipt of the FXG fee and accepted offer, an Effectiveness Notification is issued to the Bank confirming that the guarantee is effective; and
- A new Application must be submitted annually at renewal time.
Summary:
- The exporter signs the Application.
- The exporter submits all other required information.
- The exporter (or the Bank) pays the FXG fee.
- The Bank returns the letter of offer duly signed.
- The Bank receives a 100% guarantee from EDC.
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