Powers UKEF derives its powers from the '''''' (c. 67) and undertakes its activities in accordance with specific consent from
HM Treasury. The UK Government states that: UKEF'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. UKEF is required by the HM Government to operate slightly better than break even, by charging premiums from exporters at levels that match the perceived risks and costs in each case. It has three broad product types: • Guarantees on loans to buyers of UK goods and services outside the UK. Sometimes it will also fund these loans itself. • Guarantees on trade finance facilities (loans or contingent liability facilities e.g. performance bonds) extended by UK banks to exporting companies in the UK. • Insurance against the risk of non-payment for UK companies selling to buyers outside the UK. The highest value part of UKEF's activities is the first type:
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 upgrading of hospitals, airports, and power stations. Some of the projects UKEF backs go well beyond the £1 billion mark. As part of its
risk management process, UKEF has to make a judgement on the ability of a buyer or borrower (often a country) to meet its debt obligations. For country debt, department uses a "productive expenditure" test, undertaken in consultation with the
Foreign, Commonwealth and Development Office, 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. UKEF continues to check that the proposed borrowing is sustainable.
Support for smaller UK exporters In 1991, ECGD's 'short term' credit business was sold to Dutch insurer NCM Group in 1991, later becoming part of
Atradius in 2004. However, since 2011, due to the
2008 financial crisis, it re-entered the 'short term' market, with new products aimed at smaller UK exporters to help them access finance and trade credit insurance. It also introduced a network of Export Finance Managers specifically to support smaller UK exporters on the financial aspects of international trade. This business tends to be of lower value, but it supports a larger number of UK companies, typically small and medium businesses, which since 2015 have typically made up the majority of UKEF's customers. The
Small Business, Enterprise and Employment Act 2015 included provision for UKEF to support UK businesses involved in, and intending to engage in, exporting and exporting
supply chains, including "where there are complex contracting chains and financing arrangements or where exports are made via overseas subsidiaries or
joint venture companies", and with particular reference to exports of
intellectual property rights and other
intangibles. == Impact ==