Export Credits Guarantee Department

Trade and Industry written question – answered on 12th February 2004.

Alert me about debates like this

Photo of Malcolm Bruce Malcolm Bruce Shadow Secretary of State for Business, Innovation and Skills, Shadow Secretary of State for Trade and Industry

To ask the Secretary of State for Trade and Industry if she will make a statement on her Department's assessment of the debt owed to the Export Credits Guarantee Department by other nations; what assessment has been made of how much of these debts can be recovered and from whom; how her Department plans to recover them; and what targets have been set for their recovery.

Photo of Mike O'Brien Mike O'Brien Minister of State (Trade), Department of Trade and Industry, Minister of State (Trade), Foreign & Commonwealth Office

holding answer 18 December 2003

ECGD claims payments resulting from sovereign default are generally recovered through the Paris Club of Official Creditors. Paris Club creditors act in concert to agree appropriate debt restructuring with countries in difficulty.

Through this route, ECGD usually receives between £300 million and £400 million per annum. As at 30 September 2003 there were agreements with 46 countries owing ECGD a total of £10 billion. ECGD expects to recover the majority of this debt together with additional moratorium interest.

It is expected that the unsustainable debt of the heavily indebted poor countries still remaining will be written off over the next few years.

ECGD makes provisions against loss. In preparing statutory resource accounts ECGD estimates the recoverable element of outstanding paid claims based on sound valuation principles and assumption methodologies that conform to best practice as recognised and used by the major financial institutions in assessing similar risks.

For non-Paris Club debt ECGD similarly makes a regular assessment of the likely recoverability of debt where default has occurred. It then sets targets accordingly. ECGD uses a wide range of strategies to recover such debt, in line with best market practice and focuses its resources accordingly.

Does this answer the above question?

Yes1 person thinks so

No0 people think not

Would you like to ask a question like this yourself? Use our Freedom of Information site.