The world is covered by a network of 85 export credit agencies, each of which has the task of supporting the development, market penetration and growth of its own country’s export companies by providing them with a stable financial background. EXIM Hungary is one of these, and as such is an important player in the global institutional system established for financing and insuring international trade. EXIM Hungary is a specialist financial institution – or rather, a pair of institutions, consisting of a bank and an insurer working together in an integrated way – whose mission is to provide export-related credit services and risk-insurance products of the highest international standard to businesses operating in Hungary, or to firms that supply them, and through its specialist competencies, knowledge and experience, to create export opportunities and assure security for domestic companies.
EXIM Hungary is the financial engine that helps drive the success of Hungarian exporters in foreign markets – a kind of passport for businesses that has been helping to get Hungarian products and services to nearly 150 countries around the world since its inception more than a quarter of a century ago.
Export finance and export credit insurance are specialist activities, the primary purpose of which is to support and boost the export performance of companies operating in a given country, thereby improving that country’s foreign trade balance. Export and trade finance includes all funding-related measures taken by the exporter and its export-financing partner to establish the financial conditions required for the export transaction and mitigate the risks associated with it. These include classic short-term trade finance services and medium or long-term export finance activities, namely the financing of the purchase of the export goods, as well as the purchase of receivables (claims) arising from any deferred payment arrangements. The vehicle used may, for example, be credit provided to the export buyer (customer), a credit guarantee or surety (payment guarantee), export credit insurance, factoring or forfaiting.
Export credit agencies (ECAs) offer export financing and export-credit insurance services as well as guarantees to facilitate companies’ export activities around the world. More than 70 countries have such institutions, public or semi-public, which provide assistance in mitigating (reducing) export-related risks through financial solutions. The role of ECAs is constantly growing as global trade expands, especially in these times of crisis when commercial banks and market-based insurers are naturally more cautious about financing or insuring international trade transactions. The facilities offered by ECAs may be short-term (less than 2 years), medium-term (2-5 years) or long-term (5-10 years). The service portfolio may vary from institution to institution: some agencies – in contrast to EXIM Hungary – operate only as a bank or only as an insurer and, depending on the latter, provide (among other things) direct lending, refinancing, buyer credit, guarantees or sureties and/or various export-related insurance products. The special fixed interest-rate lending activity of export credit agencies is sometimes limited to interest equalisation (effectively a loan subsidy), leaving the actual lending activity to the commercial banks. The operation of ECAs in the medium and long term is regulated by the Organisation for Economic Co-operation and Development (OECD), which in the case of EU Member States is complemented by an export credit working group established within the EU. In addition, a significant number of export credit insurers are members of an international association, the Berne Union.
The Organisation for Economic Co-operation and Development (OECD) was established in 1961 in Paris with the participation of twenty countries, and Hungary joined the organisation in 1996. The purpose of the organisation is to co-ordinate the economic, commercial and financial activities of the Member States; it also provides macro-economic and trade analysis, and statistics, to its members. The OECD established the Arrangement on Officially Supported Export Credits in 1978, as well as the related environmental, sustainability and transparency rules that govern the operation of ECAs, including that of EXIM Hungary. This arrangement provides a legal framework for subsidised export credits and tied aid loans, thus ensuring a level playing field and eliminating trade distortions, but also a forum within the OECD for maintaining and monitoring financial discipline related to export credits. The country risk classification used in international trade and money market relations is also associated with the name of the OECD. The practical operation and advocacy of export credit agencies is dealt with by the council of Europe’s international working group on export credits.
The Berne Union (BU), or officially, the International Union of Credit and Investment Insurers, is a non-profit association operating in the export credit and investment insurance sector. Founded in 1934, the London-based association and the Prague Club that later joined it have more than eighty member companies worldwide. Magyar Exporthitel Biztosító Zrt. (Hungarian Export Credit Insurance Company Ltd, or MEHIB), a member of EXIM Hungary, joined the association in 2000. Besides facilitating cross-border trade, the association’s main objectives are to develop solid, uniform principles of export credit insurance and have them adopted internationally, and to create a forum for members to exchange information and experience. The association is structured around four committees (the Short Term Committee, the Medium/Long Term Committee, the Investment Committee and the Prague Club Committee) and it arranges its tasks around two major meetings held each year, one in the spring and one in the autumn. Besides these, it also holds meetings on various specialist topics such as receivables collection, country risk, project finance, reinsurance and data reporting.
Besides the BU, EXIM Hungary is a member of a number of other international professional organisations, such as the European Association of Public Banks (EAPB), the European Banking Industry Committee (EBIC), the Banking Association for Central and Eastern Europe (BACEE), the International Chamber of Commerce, Hungary (ICC Hungary), the Credit Alliance, and the International Credit Insurance and Surety Association (ICISA).
Country risk reflects the general risk factors associated with trading with a particular country, such as the risks of exporting to that country or the risks of dealing with its financial institutions. These risks never relate to a specific borrower or trade debtor, but to the political and economic circumstances of the given country. They include the risk associated with collecting monies owed by trading partners in that country, the risk that the exporter will lose its invested capital, and the risk of not earning profits that were originally expected in relation to a deal. The country risk tends to be incorporated into the terms of individual contracts in what is known as a country risk premium. The country risk can be original, where the state is the direct debtor, or derivative, where the entities in that state are the indebted parties. The difference between the two is significant, as they tend to correlate negatively with each other. Country risk analysis is the analysis of the risk of investing money in a particular state. A part of this is the country’s rating, which determines its relative position on a scale of country risk. This activity is carried out by international rating agencies (such as Fitch Ratings, Moody’s and Standard & Poor’s), or by international credit institutions or export credit insurers. EXIM Hungary, too, carries out such analyses: it currently assigns country risk ratings to 174 countries based on an examination of several hundred qualitative and quantitative economic indicators covering political, security, business environment, economic, trade, financing and payment risks. EXIM Hungary’s risk rating ranges from 1 to 7, with 1 on the scale being the countries with the lowest risk.
International trade connects the markets of countries near and far. Just as the national economies of the world are separated from each other, so are the participants in foreign trade transactions, making it difficult for suppliers and customers to have detailed and verifiable information about each other in relation to a particular transaction. In practice, this means that the exporter cannot be sure that the buyer (customer) will pay, as required, for goods that have been sold to it on terms of deferred payment. Whether it is a long-standing and reliable business relationship between the seller of the goods and the foreign buyer, or a new, emerging collaboration, it is impossible to know in advance with absolute certainty whether the person ordering the goods, the foreign buyer, will pay. Such potential risks include, but are not limited to, buyer insolvency, bankruptcy, or protracted late payment, and include certain political risks (such as war, terrorism, riots, revolution, state bankruptcy, or hyperinflation) that could result in non-payment. One of the main tasks of export credit agencies is to help exporting companies manage these risks, thus promoting the development and growth of international trade.
The framework for foreign trade contracts was first laid down in 1980 by members of the United Nations (UN) in the Vienna Convention. The members of the organisation undertook to be bound by the provisions of the Convention when concluding contracts relating to the international sale of goods. The Convention promotes the development of world trade, as the application of uniform rules compatible with different social, economic and legal systems reduces legal barriers to international trade and, at the same time, it helps clarify numerous legal issues between sellers and buyers. Among the clarifying provisions, it is worth mentioning that the sales contract does not need to be in writing or proved in writing and is not subject to any other formality; even an email purchase order can be considered a foreign trade contract between the seller and the buyer of the goods. However, it may be that the country of destination, i.e. the buyer’s country, is not a party to the Vienna Convention, in which case it is essential to clarify in the foreign trade contract which legal system will apply in respect of the contract.
In addition to numerous individual provisions stemming from the type of goods (or services) ordered, there are certain basic substantive elements that must be included in the foreign trade contract. Such substantive elements – besides the name of the goods and the price for them – are the currency of the transaction, the schedule of delivery and how the related costs and risks related to delivery are to be shared (“Incoterms”), the terms of payment (whether payment is to be made in advance or is to be deferred, or whether the parties have agreed on payment by bank transfer, open delivery or secured payment, etc), the names of the documents that will accompany the goods, the statement of the warranty obligations of the supplier, and, of course, the duration of the contract, the possibilities for termination, and the court of the country to which the parties may apply in order to settle any disputes.
As foreign trade transactions take place at the international level, connecting the markets of different countries, the number of participants involved in their implementation is usually larger than in a domestic trade transaction. By participants we mean the producer and buyer of the goods if they are trading directly, plus all the players who are involved at some point along the line between the manufacturer and the buyer of the goods if not. The main players in the chain after the manufacturer may be intermediaries, transport companies or forwarding companies involved in the delivery of the goods to the customer, as well as local distributors in the relevant foreign markets, which may be retailers or wholesalers. Intermediaries can be grouped into three categories. There are intermediaries who carry out transactions on their own behalf and at their own risk. Such is the typical reseller, who buys and forwards the goods without substantial reworking – these are the foreign trade companies. Then there are intermediaries who do not buy the goods but act as independent traders and make sales at the seller’s risk and charge a commission on their activities. Finally, there are agents or brokers who, when selling goods, act in the name and at the risk of the seller on an ad hoc or permanent basis in return for an agency fee.
On of the most important requirements when applying for export credit, export guarantee or export credit insurance products is that the goods or services of the company applying for financing and insurance have a certain minimum Hungarian value added. The credible substantiation of this added value is called the Certification of the Hungarian Content. The document is issued by the Hungarian Chamber of Commerce or by the National Chamber of Agriculture in the case of export of goods, and by the Government Office in the case of export of services. When examining an export transaction to be financed or insured, at least one of the following main rules must be fulfilled. If the planned transaction is related to export of goods, then at least 50 percent of the delivered products must be considered to be of Hungarian origin in order for the given delivery to recieve a chamber certificate providing the Hungarian content. In the cases of construction and installation orders, the value of the main contractor agreement less financing costs must be of at least a quarter of certified Hungarian origin. If the new transaction qualifies as a service export, then more than half of the employed labour force by the client requesting financing or insurance must have a legal relationship with a domestic health insurance.
Re-export is a foreign trade transaction in which the exporter resells goods purchased (imported) from abroad, to another country. According to the time of the sale and purchase, we distinguish between secured and unsecured transactions – in the former case, the purchase and the sale take place at the same time, while in the latter case, the purchase and the sale differ in time.
For the purposes of EXIM Hungary, any export activity in which goods procured from abroad are resold without any substantial reworking (further processing) or adding of value in the country of import is considered a re-export, and as such, does not qualify as a transaction that can be financed or insured. A product is deemed to have undergone substantial rework when the imported goods are sold-on under a different customs tariff number.
Buyer’s credit is one of the classic export financing products. Its specific feature is that the recipient of the credit (loan) is not the Hungarian exporter, but its foreign buyer (customer), and the buyer pays the consideration (price) for the goods or services from the buyer’s credit provided by the export credit agency operating in the country of the seller/exporter. The amount of the credit is disbursed (or partially disbursed) to the Hungarian exporter when the buyer certifies the fulfilment of the export contract (or its partial fulfilment, depending on the agreement). This special financing solution has several advantages for exporting entities: firstly, it ensures that the company’s foreign buyer (customer) has adequate cash to pay for the goods and that it (the exporter) receives the purchase price once the goods are delivered, and secondly, it improves the competitiveness of the Hungarian company internationally, as – to go with its products or services – it can offer its customer a financial solution, in line with latest international interest rates. Thus, besides stimulating international trade, this method of export-agency financing plays an important role in creating a level playing field at global level for companies involved in cross-border trade and ensures that the products and services of Hungarian exporters are not left at a competitive disadvantage on the world market due to a lack of financing.
A precondition for buyer credit financing is that the requisite Hungarian “content” of the goods or services be specified in the foreign trade contract in a verifiable manner, and that the buyer’s credit is provided by EXIM Hungary together with what we call export credit insurance, to cover the risk of non-payment by the foreign buyer.
Export credit insurance is an insurance instrument that covers foreign buyer risk (the risk of non-payment) in relation to deliveries of goods and services to another country.
Based on duration, we can differentiate between:
In addition to managing the market risk of foreign buyers (insolvency or other non-payment risk), the insurance products offered by EXIM Hungary also provide insurance to cover any political risks that may arise (embargoes, ban on payments by bank transfer, strikes, war, etc.).
The OECD Arrangement defines export contract value as the price of goods exported to foreign countries. The buyer shall at all events pay this amount either directly to the exporter or to the financing institution. For example, if the exporter supplies the buyer with machinery of a value of USD one million, several other expenses occur – e.g. the construction of buildings or establishment of infrastructure – that will add value to the investment while the export contract value remains unaltered at USD 1 million.
There are costs associated with an export transaction that do not increase the export contract value but can be financed as they are important parts of the investment. They are called local costs. For example, in the case of machinery export, materials required for the installation or human resources are typically not provided by the exporting country as they are also available locally. Local costs include administration fees, such as fees of approval procedures. Eligible local costs shall in each case be specified in the export contract.
As a general rule, provision of export finance shall not be provided in excess of 85% of the export contract value; the remaining 15% shall be paid by the buyer. However, it is possible to request financial support for local costs and administration fees (banking fees, insurance premiums), provided that the local costs shall not exceed 30% of the export contract value. Thus, with the provision of financial support for local costs, the credit amount may exceed the export contract value.
In order to ensure a level-playing field for export financing of the countries at an international level and to exclude that international advantage is taken of the relative wealth of countries, the OECD set its own minimum interest rates, the CIRRs (Commercial Interest Reference Rate). The interest rate serves as a reference value for countries that are participants to the Arrangement when determining the pricing of their export credit transactions subject to the OECD Arrangement. CIRR equalises the financial conditions between the participants to the Arrangement in the foreign markets in order to encourage competition among exporters based on their goods exported rather than on the most favourable officially supported financial terms and conditions. The applicable CIRR rates are made publicly available by the OECD Secretariat on the 15th day of each month. The interest rate varies depending on the particular currency and the length of the repayment period. It is important to emphasise that it is not the final interest rate of the financing support as this minimum rate is adjusted (increased) by the buyer risk credit enhancement determined by consensus in the OECD. The final financing cost of the transaction can be determined following the adjustment. The relevant CIRRs are available on the website of EXIM according to the different repayment periods, both in euros and dollars.
There are three basic payment methods in foreign trade: prepayment, immediate payment and deferred payment (post-payment). It is obvious that from the point of view of payment, only deferred payment presents a risk to the exporter as it means that the customer (or their bank) pays only after the delivery of goods. The export contract defines when and by what instalments the customer shall pay. The deferral period may be 30, 60, 90, 120, or even 360 days.
How can exporters address the risks posed by deferred payment? They can apply for one of the bank guarantees (letter of credit or bank guarantee), can take export credit insurance from EXIM or other insurance company or can transfer their claim to EXIM or another bank. In the latter case, the bank pays the amount owed by the buyer. Naturally, every solution has associated costs (bank charges, insurance costs); the most optimal solution in the specific transaction shall be selected.
The bill of exchange is a marketable security representing a debt claim arising from sales. As it is marketable, it can be used as a means of payment. The Geneva Convention of 1930 provides a uniform law for bills of exchange and promissory notes. The convention, among others, provides the basic definition of the requirements to be mentioned in the bill of exchange so that the financial instrument is considered valid. Two types can be distinguished: the first one is the bill of exchange, a written order that binds one party to pay a fixed sum of money to another party. The second one is the promissory note that contains a written promise by one party to pay another party a definite sum of money. When a bill of exchange is involved in the business transaction, it expedient for the exporter to agree with the foreign buyer that the acceptor of the bill of exchange shall be the bank of the buyer instead of the buyer itself because this way the counterparty risk can be reduced without the involvement of an external actor.
The letter of credit (aka documentary credit) is a payment mechanism typically used in international trade of goods exported to remote regions when advance payment is not possible. Naturally, payment by the buyer on the purchase is the most favourable for the seller. However, this payment method is not the best interest of the buyer whose prime concern is to be able to view and check the quality of the purchased goods and make complaints, where applicable, before the payment.
The aim of the letter of credit (LOC) issued by financial institutions is to balance the conflicting interests. The letter of credit is subject to conditions, provides irrevocable payment guarantee and – among others – also defines the payment method of the transaction: immediate payment, deferred payment, acceptance of bills of exchange or negotiable letters of credit (i.e. by bank nominated by the issuing bank). Having requested the bank to issue the letter of credit; the buyer shall provide information, details of the transaction required for the bank to issue the LOC based on the terms and conditions of the foreign trade agreement; in the event of full compliance, the seller can draw the amount specified in the letter of credit. On the other hand, documentary credit is also beneficial for the seller as the risk of non-payment is reduced because it is not directly the buyer but their bank who makes a promise, thus the bank takes responsibility for payment.
To enhance the security of transactions, documentary credits are covered by international regulations, which were issued by the International Chamber of Commerce (ICC) in publication No. 600 (ICC Uniform Customs and Practice for Documentary Credits – UCP 600).
A bank guarantee is an assurance that a bank provides to a contract between two external parties, a buyer and a seller. The bank undertakes an irrevocable payment obligation in relation to the beneficiary of the guarantee and assumes liability for completion of the contract should the buyer default on their debt or obligation. Bank guarantees are generally used as collateral in the case of credit transactions. These include deferred payment transactions frequently applied in international trade when the buyer pays for the goods neither in advance, nor immediately but afterwards, thereby creating a business situation when the seller “quasi” grants credit because the buyer postpones the payment for the goods to a later date. In the field of international trade, acceptance of promise to pay secured by bank guarantees, is regarded the second most secure payment method after letters of credit/ documentary credits from the point of view of the seller. Naturally, a bank guarantee also has an expiry date that can be a few months but also several years in certain cases when required by the the maturity date of the credit secured by the guarantee.
Reinsurance is a type of cooperation between insurance companies. It is a practice whereby insurers transfer portions of their risk portfolios – and their premiums - to other parties, so that they can cover major projects by collateral that would not be possible based only on their own capital portfolio. In this case, the implementation and secure financing of the projects would be jeopardised. Several extremely costly projects may take place on the international level, the implementation of which may largely depend on the cooperation of export credit insurance companies, either in the form of reinsurance, or co-insurance. Cooperation may be required, for example in the case of major infrastructure projects, road, rail and power plant constructions or in the case of financing and insuring the building of expensive vehicles, ships or airplanes that require considerable resources from different countries and the combination of numerous internationally fragmented work stages in order to be able to succeed with the project.
The Hungarian EXIM classifies almost 174 countries and examines the risks. The purpose of the country risk rating is to disclose all the risks that can support the clients in making informed decisions about their potential international business activity.
EXIM’s country risk methodology consist of analysing hundreds of quantitative and qualitative economic indicators to provide the best understanding of the political, security, business environment, economic, commercial, financing and payment risks of the particular country.
EXIM’s country risk methodology classifies each country on a scale of 1 to 7. Each classification shows the risk level of the given relations; i.e. category “1” means relations with the lowest risks, countries in category “6” can be financed and insured on a case-by-case basis, while category “7” indicates relations with extremely high risks that cannot be financed and insured.
It should be noted that country limits established in relation with certain relations on the basis of the country risk classification do not function as dedicated credit limits; they only define the maximum amount of potential loans to certain countries.
For applicable list of countries classified by EXIM and detailed information materials on country risks, visit our website.
The Incoterms® rules are a globally-recognised set of standards defining the delivery parity in the field of trade for the sale of goods. “Incoterms®” is an acronym standing for International Commercial Terms. These rules are widely used in international commercial transactions and they are increasingly becoming a decisive factor in domestic commercial transactions.
Freight costs cannot be analysed without the adequate knowledge of the Incoterms rules. The purpose of the Incoterms is to provide a set of international rules for the interpretation of the most commonly used trade terms in foreign trade.
It is an international standard that defines the rights and obligations of the buyer and seller in the international transport of goods.
The Incoterms clauses define the following:
These standards used in international trade were established by the International Chamber of Commerce (“ICC”) in 1936. The Incoterms rules have been regularly amended and revised due to the development of trade; the latest (9th) edition is from 2020. Thus, the parties shall specify in the contract which Incoterm version has been agreed upon.
Factoring is typically a framework agreement between the factoring company and the company selling deferred accounts receivable that covers the following:
The factoring company
A significant percentage, usually 80% of the exporter’s short-term domestic or foreign accounts receivable is paid by the factoring company upfront. This financing option may be particularly useful for SME suppliers with limited financial resources as they receive money immediately instead of the usual 30, 60 or 90 day payment periods. Thus, the current assets financing of enterprises using factoring significantly improves, the production or service process can be relaunched with the help of the cash received from the factoring company and the factor that buys the receivables will effectively take over the debt collection process on its behalf to receive the money that is owed to them.
In the case of factoring, the buyer (debtor) or their future payment capacity pose a risk for the factor. This is the reason why the assessment of buyers, creditworthiness analyses of the receivables, the length of deferred payment and the amount of the own resources of the exporter all play a crucial role in the process and pricing of factoring.
The factoring service offered by EXIM means forfaiting, i.e. the purchase, without recourse, of bank-guaranteed receivables from export sales, transforming a deferred-payment transaction into a prompt-payment one, and thus relieving the exporter from the commercial, country (political and transfer), exchange rate, and collection risks arising from the receivable.
Payment schemes related to agreements, commodity exchange and services are of key importance in the field of international trade.
Exporters may obtain a significant competitive advantage over the other potential suppliers, i.e. their international competitors, by providing deferred payment instead of prepaid payment for their existing or new foreign partners. However, in these cases it is logical for them to raise the question whether the partner will definitely pay after the delivery or how the exporter will be able to manage the related risks.
Export receivables insurance provided by EXIM is aimed at solving this problem. The greatest benefit of this insurance is that EXIM takes over the exporter’s default risks related to the foreign partner, enabling the exporters to negotiate about an even 2-year deferred payment deadline - conferring a significant international competitive advantage - with their partners as they can be confident that they will receive the price of the delivered commodities or services in the end.
As this insurance allows the exporter to be covered against losses caused by the buyer’s economic situation as well as against country risks beyond the partner’s control, it is worth considering its usage both in the case of new partners and partners from countries with unstable political situation. Besides covering risks connected to export transactions with deferred payment, the insurance is also advantageous from the point of view of improving the liquidity of the exporters who can offer the secured claims for sale to EXIM whereby they can immediately obtain almost 100% of the price of the product delivered on deferred settlement terms.
Risk insurance limit is a calculated maximum risk limit that a financial institution is willing to undertake vis-à-vis a particular legal person. During the risk classification process the model takes into consideration the key financial data and figures of the particular foreign company in the previous years (e.g. turnover, EBITDA, debt ratio, etc.), the risk rating of the country where the foreign partner performs the economic activity, the characteristics of the transaction and other subjective factors that may have an impact on the return. The result is an amount that we call risk limit. EXIM can provide financing within this amount; i.e. EXIM can undertake the risk related to the company within the limit of this amount. It is important to emphasize that the risk limit per se does not mean automatic financing, it only provides for the possibility of financing. Another characterising feature of the risk limit is that its extent may change with the changing environment and its impact on the economic activity of the company.
Whether it is revenue generated in foreign currency or the related costs and financing, exchange rate volatility may have major influence on the economic actors’ performance, financial stability and the predictability of their operation. Thus, failing to address exchange rate exposure can be a serious risk factor.
Foreign currency risk primarily emerges in the life of an undertaking when the costs and revenues incur - either partially or entirely - in different currencies, or - although generated in HUF - they are realised at the prevailing exchange rate of a given, different currency. Therefore, currency risk is a risk resulting from the exchange rate volatility of the different currencies, and thus it has an outstanding role in the management practices of export and import companies.
In the light of the above, all undertakings concerned should deploy foreign exchange risk coverage as an essential financial planning instrument. One of the most commonly used methods to achieve this is the so-called forward contract that enables the purchase or sale of a certain foreign currency at an exchange rate which is predefined at the time of the conclusion of the forward contract in parallel with the application of future settlement (typically within the time period of maximum one year). This method to cover for fluctuations of the exchange rate provides security because the margin of the transaction can be fixed against the possible undesirable exchange-rate fluctuations. By applying this method, the company and the commercial bank can agree upon the details of a future conversion already in the present, such as the currency rate, the currency pair, the settlement day (fulfilment day), the direction of the conversion (purchase or sale) and the amount.
Manufacturing risk insurance covers the commercial and political risks incurring during the manufacturing period by insuring the production cost of the goods and services produced on the basis of the foreign trade contract. This type of insurance can be applied individually or as a supplemental insurance.
The insurance covers the risk of unjustified refusal of the buyer to receive the goods and also serves as a security for financing banks in case of export pre-financing
The subject of the insurance can be the production costs of the goods and services produced on the basis of the export trade contract, as follows:
The concept of export supply chain can be interpreted in different ways. In the narrower sense of the term, it means the group of independent undertakings that manufacture the export products or provide the services. Further simplifying this term, even a single undertaking can include the entire supply chain as a coordinated, concerted set of logistics processes within the company, i.e. an integrated logistics system.
In the broader sense of the term, all actors that cooperate in the process of acquisition, manufacturing and delivery of the product (goods or services) to the buyer can be regarded as members of the export supply chain, from raw material suppliers through manufacturers of semi-finished and finished products, logistics service providers, wholesalers and retailers to consumers/users, including their financers.
The whole export supply chain involves all participants of the given vertical relations system from the first supplier to the final customer ensuring the flow of products, services and funds and the two-way flow of information.
EXIM considers all domestic economic entities eligible for funding as members of the export supply chain that perform transport of goods or provision of services for the exporter aimed at exporting Hungarian products or services or required to fulfil their obligations under the contract.