Insurance Coverage for Export to Be Expanded

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The Ministry of Commerce, Industry and Energy will simplify the bank requirements for small and medium enterprises when they open L/Cs to import raw materials for export in line with its policy to classify them under the export category.

The Korea Export Insurance Corporation will guarantee banks of the payment when a company seeks to open an L/C to import raw materials to be used to process products for export.

Currently, importers of raw materials must deposit an amount equivalent to the L/C amount for any risk which may arise from the importation process unless they are affiliated with a conglomerate.

The ministry will revise the Export Insurance Act to that effect during the first half of the year, Minister Park Tae-young reported to President Kim Dae-jung yesterday.

Park said exporters will be protected against financial losses caused by foreign exchange disparities arising from deferred payments and banks will be guaranteed compensation for damage resulting from interest rate changes for loans they offer for exportation.

The ministry is also considering waiving trade financing from the credit ceiling of local banks and will seek to legislate the ``Law on the Promotion of Trade Infrastructure'' meant to facilitate the construction of exposition sites, the training of trade-related personnel and the fostering of Internet-based trade.

Minister Park presented a three-point reform plan which is addressed above all to stabilizing the base for trade surplus and expanding the supply of foreign capital, to transforming the industry structure to an information-based high value-added one, and to realizing restructuring at conglomerates and management reform at public enterprises, and to expediting deregulation. …