Govt eyes trade insurance coverage of COVID-linked losses

TOKYO (Jiji Press) — The government is planning to provide trade insurance coverage of Japanese companies’ overseas losses linked to the COVID-19 pandemic, Jiji Press learned Wednesday.

The government aims to submit a related bill to revise the trade insurance law during the ongoing parliamentary session in mid-February and put the revised law into force at an early date this year, informed sources said.

The envisioned measure is expected to cover additional costs at Japanese businesses overseas amid the pandemic, including those caused by lockdowns.

The costs are expected to include payments to workers over halts in plant construction projects, the sources said.

The ceiling for insurance payouts and other details will be decided later.

The existing law limits trade insurance payouts to those covering losses incurred due to war, revolution or insurrection outside Japan.

The planned bill will also call for lifting the ban on investment by the government-backed Nippon Export and Investment Insurance, or NEXI, in international financial institutions, with a view to securing opportunities for Japanese companies to grow.

Specifically, the government eyes NEXI investment in a trade insurance organization in the African region to collect local information and support collaboration between Japanese companies and their partners there.

Initially, the government planned to submit the bill during last year’s ordinary parliamentary session. It dropped the plan, however, after inappropriate investment practices by NEXI were revealed.

It came to light that NEXI had possessed bonds issued by foreign companies in violation of ministry ordinances. The organization later compiled measures to prevent any recurrence of the misconduct, including by conducting a thorough internal audit.

Finding that NEXI is implementing the preventive measures properly, the government has concluded that it can now submit the bill, the sources said.