World Library  
Flag as Inappropriate
Email this Article

UK Export Finance


UK Export Finance

UK Export Finance
Welsh: Cyllid Allforio y DU
Department overview
Formed 1919
Jurisdiction United Kingdom
Headquarters London
Minister responsible Vince Cable MP, Secretary of State for Business, Innovation and Skills
Website /uk-export-finance/organisations/

UK Export Finance is the operating name of the Export Credits Guarantee Department (ECGD), the United Kingdom's Export Credit Agency (ECA). It operates as a ministerial department of the Department for Business, Innovation and Skills,[1] and reports to the Secretary of State for Business, Innovation and Skills. ECGD derives its powers from the 1991 Export and Investment Guarantees Act and undertakes its activities in accordance with a specific consent from HM Treasury. ECGD was established in 1919 to promote UK exports lost during the submarine blockade of World War I.

ECGD's aim is to benefit the UK economy by helping exporters of UK goods and services to win business, and UK firms to invest overseas, by providing guarantees, insurance and reinsurance against loss, taking into account HM Government’s wider international policy agenda. ECGD is required by HM Government to operate on a slightly better than break-even basis, charging exporters premium at levels that match the perceived risks and costs in each case.

The largest part of ECGD's activities involves underwriting long term loans to support the sale of capital goods, principally for the export of aircraft, bridges, machinery and services; it helps UK companies take part in major overseas projects such as the construction of oil and gas pipelines and the upgrading of hospitals, airports and power stations. Support can be given for contracts as low as £1,000, but some of the projects ECGD backs go well beyond the £1 billion mark.

As part of its risk management process, ECGD has to make a judgement on the ability of a country to meet its debt obligations. The department uses a ‘productive expenditure’ test, undertaken in consultation with the Department for International Development, that makes sure that the countries defined as Heavily Indebted Poor Countries and those exclusively dependent on International Development Association financing only get official export credits from the UK for projects that help social and economic development without creating a new unsustainable debt burden. ECGD continues to check that the proposed borrowing is sustainable.

Criticisms of the ECGD

The ECGD has been the subject of criticism by UK-based NGOs; the Cornerhouse (see Campaign Against Arms Trade has argued that the ECGD provides excessive levels of support for arms sales; Jubilee Debt Campaign has argued that the cancellation of debts owed to the ECGD should not be counted towards UK Official Development Assistance figures; World Wide Fund for Nature argues that excessive greenhouse gases are emitted from ECGD-supported projects and that this is inconsistent with wider UK environmental policy.

Defence exports

While in the early years of the decade the proportion of ECGD’s business in support of defence exports ranged from 30% to 50%, this has now declined to under 1% in 2009-10.

ECGD support for defence exports is conditional upon exporters obtaining valid export licences from the United Kingdom Export Control Organisation (ECO), part of the [Department for Business, Innovation and Skills][1]. All applications are assessed, on a case-by-case basis, against the consolidated EU and National Arms Export Licensing criteria.

ECGD’s Anti-Bribery and Corruption Procedures

ECGD aims to:

  • deter illegal payments, corrupt practices and money laundering by applicants for ECGD's support; and
  • ensure, as far as is practicable, that all transactions that ECGD supports do not place ECGD in breach of any UK or European legislation or place the UK in contravention of any international agreements to which the UK is a party.

It does this through the public information it provides and the declarations in its application forms; it has some powers to make enquiries but these are limited. ECGD does not have a formal investigative capacity.

Key aspects of ECGD's anti-bribery and corruption procedures are to:

  • Require applicants to provide copies of their codes of conduct and to confirm that they have applied them in tendering for the award of the contract for which ECGD’s support is sought;
  • Obtain information with a view to ascertaining whether any improper payments involving agents have been made;
  • Inspect, if necessary, exporters' documents relating to winning contracts and making payments to agents;
  • Remind applicants of their obligations to comply with UK anti-corruption legislation;
  • Remind applicants that ECGD will refer all allegations of bribery, corruption or money laundering to the appropriate authorities;
  • Require applicants to declare that neither they nor any of their directors have admitted to, or been convicted of, engaging in any form of bribery or corruption;
  • Require applicants to disclose whether they, or anyone acting on their behalf, is under charge in a UK court for bribery of a foreign public official;
  • Require each applicant to make reasonable enquiries concerning any of its subsidiary companies, agents or consortium partners who, in each case, are involved in the contract for which ECGD’s support is sought and to confirm that, on the basis of those reasonable enquiries, the applicant has no cause to believe that any of those parties, or any of their directors, has admitted to, or been convicted of, engaging in any corrupt activity; and
  • Require each applicant to confirm that neither the applicant nor anyone acting on the applicant’s behalf has engaged in corrupt activity in relation to the contract for which ECGD’s support is sought.

Equivalent in the world


  1. ^ "UK Export Finance". Inside Government. GOV.UK. 2013. Retrieved 5 February 2013. 

External links

  • Export Credits Guarantee Department official website
  • The UK Export Credit Guarantee Department: Corruption and the Case for Reform UNICORN, Cardiff University, June 2002
  • Corner House: UK, ECGD and anti-corruption
  • Mark Thomas finds corruption sadly unregulated Mark Thomas, New Statesman, 1 January 2005
  • Depraved Debt Collectors, George Monbiot
  • The Use of Environmental and Social Criteria in Export Credit Agencies’ Practices, by Markus Knigge et al. Published in 2003 by the Deutsche Gesellschaft fuer Technische Zusammenarbeit - GTZ
This article was sourced from Creative Commons Attribution-ShareAlike License; additional terms may apply. World Heritage Encyclopedia content is assembled from numerous content providers, Open Access Publishing, and in compliance with The Fair Access to Science and Technology Research Act (FASTR), Wikimedia Foundation, Inc., Public Library of Science, The Encyclopedia of Life, Open Book Publishers (OBP), PubMed, U.S. National Library of Medicine, National Center for Biotechnology Information, U.S. National Library of Medicine, National Institutes of Health (NIH), U.S. Department of Health & Human Services, and, which sources content from all federal, state, local, tribal, and territorial government publication portals (.gov, .mil, .edu). Funding for and content contributors is made possible from the U.S. Congress, E-Government Act of 2002.
Crowd sourced content that is contributed to World Heritage Encyclopedia is peer reviewed and edited by our editorial staff to ensure quality scholarly research articles.
By using this site, you agree to the Terms of Use and Privacy Policy. World Heritage Encyclopedia™ is a registered trademark of the World Public Library Association, a non-profit organization.

Copyright © World Library Foundation. All rights reserved. eBooks from Project Gutenberg are sponsored by the World Library Foundation,
a 501c(4) Member's Support Non-Profit Organization, and is NOT affiliated with any governmental agency or department.