The Korea Trade Insurance Corporation (K-Sure) is stepping in to alleviate the financial burden on domestic companies as they restructure their sales operations in response to the European Union's Carbon Border Adjustment Mechanism (CBAM). On August 13, K-Sure announced it will provide approximately 40 billion won in trade insurance to Samsung C&T's German subsidiary.
This support will utilize K-Sure's 'Short-Term Global Sales Insurance.' Financial institutions will purchase accounts receivable from Samsung C&T's German subsidiary on a non-recourse basis, allowing the subsidiary to use the cash obtained for working capital.
The non-recourse structure means that if the financial institution is unable to collect payment on the purchased accounts receivable, the exporting company will not face additional liability. K-Sure will compensate for the financial institution's risk of non-collection.
K-Sure's intervention comes as the CBAM is fully implemented this year, prompting changes in the sales structures of domestic companies in Europe.
European companies are shifting the burden of customs and carbon regulation compliance onto sellers, leading to an increase in domestic companies selling products through their overseas subsidiaries. As the role of these subsidiaries expands, securing working capital has emerged as a new financial challenge.
K-Sure plans to support local subsidiaries in securing necessary funds early by leveraging accounts receivable, thereby bolstering the local competitiveness of domestic companies in response to carbon regulations.
K-Sure President Jang Young-jin stated, "The changes in the global trade environment, such as European carbon regulations, require our companies to adapt their overseas business strategies. We will actively support them to resolve financial difficulties in a timely manner and maintain competitiveness in the global market."
This support will utilize K-Sure's 'Short-Term Global Sales Insurance.' Financial institutions will purchase accounts receivable from Samsung C&T's German subsidiary on a non-recourse basis, allowing the subsidiary to use the cash obtained for working capital.
The non-recourse structure means that if the financial institution is unable to collect payment on the purchased accounts receivable, the exporting company will not face additional liability. K-Sure will compensate for the financial institution's risk of non-collection.
K-Sure's intervention comes as the CBAM is fully implemented this year, prompting changes in the sales structures of domestic companies in Europe.
European companies are shifting the burden of customs and carbon regulation compliance onto sellers, leading to an increase in domestic companies selling products through their overseas subsidiaries. As the role of these subsidiaries expands, securing working capital has emerged as a new financial challenge.
K-Sure plans to support local subsidiaries in securing necessary funds early by leveraging accounts receivable, thereby bolstering the local competitiveness of domestic companies in response to carbon regulations.
K-Sure President Jang Young-jin stated, "The changes in the global trade environment, such as European carbon regulations, require our companies to adapt their overseas business strategies. We will actively support them to resolve financial difficulties in a timely manner and maintain competitiveness in the global market."
* This article has been translated by AI.
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