An international agreement providing a framework for the provision of
export credit guarantees. An export credit guarantee ensures that an exporter receives payment for goods shipped overseas in the event that the customer
defaults, reducing the
risk to the exporter's business and allowing it to keep its
prices competitive. The guarantee is usually provided by a government or quasi-government agency.
The Arrangement is intended to prevent a situation in which different countries use their export credit guarantees to attract business to the detriment of other countries. In other words, the Arrangement seeks to ensure that exports are sold on the basis of their quality rather than because an export credit guarantee offers unfairly favorable terms. The Arrangement is not binding in itself, but has been adopted by most
OECD countries.