Expanded cover of Dutch ECA for Indonesia used for military exports

In the last ‘What’s New’ of August 2008 a news release of the Dutch Ministry of Finance was published, reporting that it had successfully hedged a total € 210 million of the export credit risks of the Netherlands in Indonesia through credit default swaps (CDS's). In this way the Netherlands ECA Atradius DSB became able to facilitate additional Dutch exports. Because of Atradius DSB cover for the export of 4 military navy vessels to Indonesia with a value of about €1 billion some years ago, [the legal cover ceiling for Dutch export credit support to Indonesia is only €1.5 billion] many regular Dutch exporters complained in the past about not being able to get ECA cover for their exports to Indonesia.

Early this month the signing of a new insurance policy for a Dutch export to Indonesia was reported on the website of Atradius DSB. However, contrary to expectations, it refers again to the supply to the Indonesia Ministry of Defence of additional goods for the mentioned 4 new Dutch military navy vessels that already were insured by Atradius DSB for an amount of €1 billion. This supplementary transaction covers a maximum damage of €48,663,900 for the export by Thales Nederland BV of radar detectors, an electronic measuring terminal, a “decoyer”, an under-water telephone, an instrument to assess the salinity of water and a jammer. It also includes assistance with the assembly and integration of these goods.

Since 2002, Atradius DSB insured in total 6 Dutch export transactions with a military nature, and only one civilian export transaction.