SERV - Swiss Export Risk Insurance
Swiss Export Risk Insurance (SERV) is a Swiss government institution under public law that replaced the Swiss Export Risk Guarantee (ERG) with effect from 1 January 2007. It took over and expanded the range of insurance offered by the ERG. Now it is also possible to insure private buyer risk with SERV, i.e. bank or state guarantees are not required for every case.
The medium and long-term financing of exports destined for the emerging markets is generally provided with SERV cover.
SERV insures consignments and shipments abroad (export transactions) against delayed payment or other losses arising from outstanding claims against the debtor.
These export transactions include the supply or leasing of consumer and capital goods, the manufacture of plant/equipment, construction, engineering and development-related work, consulting services and the granting of licences.
Individual insurance products:
SERV insures the exporter against default of the supplier credit on dispatch of the goods (supplier credit insurance).
If the export transaction is financed by a bank buyer credit, the supplier credit insurance covers the risk of non-payment on dispatch until loan disbursement.
Manufacturing risk cover from SERV insures the exporter's manufacturing costs (actual costs) against interruption to production up until the goods are shipped.
SERV's buyer credit cover insures the buyer credit that the lending bank granted to finance the export transaction against payment default.
Contract guarantee insurance covers the contractual obligations of the exporter to the buyer, such as performance bonds. It also covers the unfair calling of guarantees.
Confiscation risk insurance covers the consignment stock or exhibition goods abroad against seizure or the prevention of the repatriation of the goods.
The goods and services must be largely of Swiss origin, or the Swiss value-added content must constitute at least 50% of the value of the export transaction.
If the Swiss value added is less than 50%, SERV may approve exceptions and insure foreign deliveries for up to a maximum of 70% of the contract value if a request has sufficient grounds. Such exceptions include cases where the goods and services in question cannot be produced or sourced in Switzerland.
Terms and conditions:
If SERV insures export transactions in which the foreign content exceeds 50%, SERV will charge a 2.5% premium loading for every 5% increase in foreign content that exceeds the free insured foreign content of 50%.
Example: For foreign content of 58%, SERV will charge a 5% premium loading.
The Swiss Federal Act on Swiss Export Risk Insurance (SERV), the relevant Ordinance of the Swiss Federal Council and the general terms and conditions of the various SERV insurance products set out various stipulations for the granting of insurance by SERV. The main requirements include:
As an exporter, you must be domiciled in Switzerland and entered in the Commercial Register.
The export transaction must comply with Swiss and foreign regulations. This includes importing and foreign exchange regulations of the importing country or the export regulations of Switzerland and the other exporting countries.
In particular the provisions of the Swiss Criminal Code prohibiting the bribery of foreign officials and the Swiss Federal Law on Unfair Competition must be observed.
SERV shall generally exclude cover if the risks involved prohibit the granting of insurance or the export transaction contravenes the international obligations of Switzerland or SERV's business policy.
Insurance cover commences upon payment of the SERV premium. The premium must be paid within 30 days of delivery of the insurance contract.
For consumer goods, the permitted payment period of 6 months may not be exceeded. No down or interim payments are necessary for consumer goods.
Where capital goods are concerned, in the case of a credit transaction a down and interim payment of 15 % of the delivery value will be required by the time of delivery.
Manufacturing risk is covered upon commencement of the export contract, although the economic risk is not insured until all requisite collateral is in place (such as documentary credits).
For deliveries of capital goods of CHF 100,000 to CHF 500,000 in value, the applicable credit period is two to four years; five years for larger sums. In the case of major transactions with emerging markets, credit periods in excess of five years will also be covered. In this instance, the OECD export credit arrangement is also taken into account.
The credit should essentially be repaid in equal half-yearly instalments. In the case of special projects, annuities and degressive, progressive or variable repayment arrangements may also be considered.
When tendering for an export contract, you can lodge a preliminary request with SERV in order to ascertain if cover might be provided. If the answer is "yes", the Agency is bound by its decision for six months provided conditions in the purchaser's country remain unchanged.
The preliminary request for cover for national risks or for risks for banks generally accepted by SERV is free of charge. If insurance is requested for banks that have not been accepted or accepted only on a case-by-case basis or for private buyers, SERV may charge an expense premium to cover the cost of the review work. This expense premium will be based on the contract value (or the insured actual costs for isolated manufacturing risk insurances) and will be due upon invoicing.
Applications (both preliminary and definitive) of particular significance for the insurance of export transactions (sum involved, country and project risk, development policy, etc.) are submitted to the Federal Council for consideration.
Irrespective of whether a preliminary request has already been made, your application should be submitted to SERV in Zurich as follows:
With manufacturing risk cover: on or before conclusion of the delivery contract.
Without manufacturing risk cover: before the first delivery.
Products and services in these webpages may not be available for residents of certain nations. Please consult the sales restrictions relating to the service in question for further information.
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