ISLAMABAD, April 18: The Islamic Corporation for Insurance of Investment and Export Credit (ICIEC) has decided to provide insurance cover to all mining activities in Balochistan, besides insurance credit to exporters.
The ICIEC is a Jeddah-based multilateral agency, a subsidiary of the Islamic Development Bank (IDB) that holds 50 per cent of its $130 million authorized capital and insurance commitments of $280 million. The remaining 50 per cent of the authorized capital is contributed by member states of the OIC, including Pakistan, which has about 5 per cent stakes.
Irfan Bukhari, a senior official of the ICIEC, told Dawn the ICIEC was selling two products — export credit insurance and investment insurance. A presentation would be given to the delegates of the OIC countries investment conference here on Saturday.
He said many leading exporters in Pakistan like Crescent group, Saphire group, Nishat and Rupali were considering utilizing the export credit insurance so that if they were not bothered about the recovery of their exports. He said the products of ICIEC would enable the exporters to explore new markets.
Mr Bukhari said the ICIEC had identified 12 target markets in the OIC countries and Pakistan was on top of that. However, having contributed about $8 million in the ICIEC, Pakistan has not utilized even a single penny for its insurance purposes.
The agency is now also taking up the matter with Pakistani banks that they should consider treating the guarantees of receivables from the ICIEC as collateral to provide credit and in opening of letters of credit abroad.
The objective of the ICIEC was to enlarge the scope of trade transaction and the flow of investment among the OIC member states through the provision of insurance for investment and export credits executed in accordance with the principles of Shariah.
It provides insurance and re-insurance to cover the non- payment of export receivables resulting from commercial or non-commercial risks, but refrains from covering contracts for the sale of goods prohibited under Shariah as well as interest accruing from export credit or investment loans.
The export credit insurance of the ICIEC covers commercial risks like insolvency or bankruptcy of a buyer, a buyer’s failure or refusal to pay for goods which have been delivered to and accepted by it, or its refusal to accept goods dispatched to it.
Non-commercial risks include blockage of delay in the transfer of foreign exchange from buyer’s country, expropriatory acts, bans on imports and exports imposed by the buyer’s government, and war and civil disturbances.
