1. OECD Consensus

Organisation for Economic Co-operation and Development – The OECD Consensus is an international agreement of the OECD that came into being in 1978. Its purpose is to maintain fair competition among exporting countries that are OECD Consensus Participants. The Agreement is orientated towards the limitation of both minimum interest rates for the financing of export transactions and minimum premium rates for insurance.

2. Exporter

A Croatian company or a crafts business, which has signed an export contract with a foreign legal entity.

3. Export Contract

A contract between a Croatian company or a crafts business as one party and a foreign legal entity as the other, under which the Croatian party’s liability relates predominantly to producing and/or delivering goods and /or rendering services to a foreign buyer.

4. Insurance Policy

A written document issued by an insurer as evidence of the concluded insurance contract.

5. Political Risks

War or events similar to war, rebellion or revolution, government measures limiting, preventing or restricting remittances for a period of time exceeding 3 months; insured party’s inability to fulfil its obligations due to other political events – this definition includes any loss incurred in the course of production with respect to a foreign debtor or its guarantor as a public law entity.

6. Commercial Risks

Non-payment or non-fulfilment of an obligation by a foreign debtor: insolvency, bankruptcy or enforcement proceedings relating to the property of the foreign debtor, inability of the insured party or its representatives to honour a loan agreement due to circumstances that are beyond control of the insured party or its representatives and that occurred abroad.

7. Export Contract Value

The value of the exported goods or services, which is to be paid by the buyer (not including local costs and interest).

8. Local Costs

Expenses for the goods or services in the buyer’s country that are necessary for honouring the export contract.

9. Commercial Interest Reference Rates

The rates determined by the OECD Agreement as minimum commercial interest reference rates that are published periodically (for a period of one month); the rates are calculated on the basis of interest rate developments in the government bond market in basic currencies (USD, GBP, EUR, etc.) and on the basis of loan terms; they are obligatorily used when financing exports with state support; information about CIRR rates can be obtained on the web site: www.oecd.org, or by contacting HBOR.

10. Country Risk Classification

The classification is based on the OECD Classification in effect from 24th July 2002. More information can be obtained on the web site http://www.oecd.org.

11. Side Agreement

HBOR concludes a separate agreement with an exporter, which regulates their mutual rights and obligations as well as the issue of retention. Retention is the share of the exporter and/or the insured party in the loss, i.e. the portion of the loan not covered by the insurance policy, which generally ranges from 5 to 20%.

12. Buyer Credit

A special purpose loan agreement or a loan agreement for financing an export contract between a bank or a company (a lender or a creditor) as one party and a foreign bank or any other legal entity guaranteed by the bank or by a public law entity (a borrower or a debtor) as the other party, under which the foreign debtor’s primary liability relates to the payment of interest and repayment of the principal debt to the lender or creditor.