HONG KONG EXPORT CREDIT INSURANCE CORPORATION ORDINANCE

HONG KONG EXPORT CREDIT INSURANCE CORPORATION ORDINANCE

LAWS OF HONG KONG

HONG KONG EXPORT CREDIT INSURANCE

CORPORATION ORDINANCE

CHAPTER 1115





CHAPTER 1115

HONG KONG EXPORT CREDIT INSURANCE
CORPORATION ORDINANCE

ARRANGEMENT OF SECTIONS

Section .................................Page

PART I

PRELIMNARY

1. Short title......................... ... ... ... ... ... ... ... ... ... 3

2. Interpretation ... ... ... ... ... ... ... ... ... ... ... ... ... ... 3

PARTII

ESTABLISHMENT, CONSTITUTION, INCORPORATION
AND BUSINESS OF THE CORPORATION

3......................Establishment of the Corporation ... ... ... ... ... ... ... ... 3

4. Official seal and authentication thereof, and instruments executed thereunder 4

5...................................Certain contracts and instruments not required to be under seal ... ... 4

6...................Appointment of Commissioner ... ... ... ... ... ... ... ... ... 4

7........................Delegation of powers by the Corporation ... ... ... ... ... ... ... 4

8...............Acting Commissioner ...... ... ... ... ... ... ... ... ... ... ... 4
9...............Business of the Corporation ... ... ... ... ... ... ... ... ... 5

9A................................Power of Corporation to enter into re-insurance agreement ... ... ... 5

9B.........Guarantees ....................... ... ... ... ... ... ... ... ... 5

PART III

ADVISORY BOARD

10...................Advisory Board establishment ... ... ... ... ... ... ... ... ... 5

PART IV

POLICY OF ME CORPORATION

11.......Policy ............................... ... ... ... ... ... ... ... ... 6

12............................Approval of policy in respect of certain matters ... ... ... ... ... 6

13..............Extent of indemnity ........... ... ... ... ... ... ... ... ... ... 7

PART V

POWERS OF THE CORPORATION

14..............Powers of the Corporation ..... ... ... ... ... ... ... ... ... ... 8
15..............Provident fund scheme ......... ... ... ... ... ... ... ... ... ... 8





Section Page
PART VI

STAFF

16. Appointment of officers ... ... ... ... . ... ... ... ... ... ... 8
17. Terms and conditions of employment ... ... ... ... ... ... ... ... 8

PART VII

FINANCE

18. Corporation indemnified ... ... ... ... ... ... ... ... ... ... ... 8
19. Capital ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 9
20. Loans ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 9
21. Bank account ... ... ... ... ... ... ... ... ... ... ... ... ... ... 9
22. Application of moneys ... ... ... ... ... ... ... ... ... ... ... ... 9
23. Maximum liability ... ... ... ... ... ... ... ... ... ... ... ... ... 9
24. Accounts ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 9
25. Auditors ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 10
26. Access by the Director of Audit ... ... ... . ... ... ... ... ... ... ... 10
27. Exemption from taxation and stamp duties ... ... ... ... ... ... ... 10
28. Annual report ... ... ... ... ... ... ... ... ... ... ... ... ... 10

PART VIII

MISCELLANEOU
S

29. Power of Governor to give directions to the Financial Secretary and the

Corporation .............................. ... ... ... ... ... ... 10

30. Validity of insurance contracts and guarantees ... ... ... ... ... ... 11

31........Secrecy ............................. ... ... ... ... ... ... ... ... 11

32............False statements ................ ... ... ... ... ... ... ... ... ... 11

First Schedule ................................. ... ... ... ... ... ... ... ... 11

Second Schedule...................... ... ... ... ... ... ... ... ... ... ...
12





CHAPTER 1115

HONG KONG EXPORT CREDIT INSURANCE

CORPORATION

To provide for the establishment of the Hong Kong Export Credit
Insurance Corporation, and to define its powers and functions.

[23rd December 1966.1

PART I

PRELIMINARY

1. This Ordinance may be cited as the Hong Kong Export Credit
Insurance Corporation Ordinance.

2. In this Ordinance, unless the context otherwise requires

'Advisory Board' means the Advisory Board established by section
10;

,,auditors' means the auditors appointed under section 25;

'Commissioner' means the Commissioner of the Hong Kong Export
Credit Insurance Corporation appointed under section 6;

'Corporation' means the Hong Kong Export Credit Insurance
Corporation established by section 3;

'financial year' means the period commencing on the 1st April in any
year and ending on the 31st March in the year following, except
that the period from the commencement of this Ordinance to the
31st March 1967 shall be deemed to be a financial year;

'trade with countries outside Hong Kong- includes any transaction
(including a transaction for the rendering of a service) involving a
consideration in money or money's worth accruing from a person in
the course of carrying on business or other activities outside Hong
Kong to a person carrying on business in Hong Kong or to a
company carrying on business or other activities outside Hong
Kong which is directly or indirectly controlled by a company
carrying on business or other activities in Hong Kong.

PARTII

ESTABLISHMENT, CONSTITUTION, INCORPORATION
AND

BUSINESS OF THE
CORPORATION

3. (1) There is hereby established a corporation to be called the
Hong Kong Export Credit Insurance Corporation which shall, in that
name, be a body corporate with perpetual succession and shall be
capable of suing and being sued, and subject to this Ordin





ance of doing and suffering all such other acts and things as bodies
corporate may lawfully do and suffer.

(2) The powers, functions and duties of the Corporation under this
Ordinance may be exercised or performed in its name and on its behalf
by the person for the time being performing the duties of the office of
Commissioner.

4. (1) The Corporation shall have and may use a common seal, the
affixing of which shall be authenticated by the signature of the
Commissioner.

(2) Any instrument purporting to be an instrument duly executed
under the seal of the Corporation shall be received in evidence and
shall, unless the contrary is proved, be deemed to be an instrument so
executed.

5. Any contract or instrument which, if entered into or executed by
a person not being a body corporate, would not be required to be under
seal may be entered into, signed or executed on behalf of the
Corporation by any person generally or specially authorized for that
purpose by the Corporation.

6. (1) The Governor may appoint a Commissioner of the Hong Kong
Export Credit Insurance Corporation, who may be a public officer
seconded for the purpose, on such terms and conditions as he may
think fit.

(2) The appointment of any person to be the Commissioner, and the
termination of his appointment, shall be notified in the Gazette.

7. The Corporation may delegate any officer of the Corporation, or
the person for the time being holding any office of the Corporation
designated by it, to exercise such of its powers, except this power of
delegation, or perform such of its functions and duties on its behalf as it
may consider necessary.

8. (1) If the office of Commissioner is vacant at any time or in the
event of the absence from duty of the Commissioner, the Governor may
appoint a person, who may be a public officer seconded for the purpose,
to act as Commissioner on such terms and conditions as he may think
fit.

(2) A person appointed to act as Commissioner by reason of a
vacancy in the office of Commissioner shall hold office during the
pleasure of the Governor, but shall not in any event continue in office
for more than 1 year from the date of his appointment.

(3) A person appointed to act as Commissioner in the event of the
absence from duty of, the Commissioner shall hold office during that
absence, but his appointment may at any time be terminated by the
Governor.





9. (1) The Corporation may, subject to the provisions of this
Ordinance, carry on the business of insurance, being insurance under
the contracts of insurance specified in subsection (2), and the business
of giving guarantees under section 9B. (Amended, 8 of 1974,s.2)

(2) The contracts of insurance which the Corporation may enter
into under this section are contracts of insurance with, or for the benefit
of, persons carrying on business in Hong Kong, being contracts of
insurance against risk of monetary loss or other monetary detriment
attributable to circumstances outside the control of the person suffering
the loss or detriment and resulting from failure to receive payment in
connexion with, or otherwise arising out of, acts or transactions in the
course of, or for the purpose of, trade with countries outside Hong
Kong.

(3) The Corporation shall not enter into contracts of insurance
against risks that are normally insured with commercial insurers.

(4) The Corporation shall pursue a policy directed towards
securing revenue sufficient to meet all its expenditure properly
chargeable to revenue account.

9A. The Corporation may enter into an agreement with any person
whereby such person undertakes to insure the Corporation against all
or any of the liability of the Corporation under a contract of insurance
entered into under section 9 either before or after the commencement of
the Hong Kong Export Credit Insurance Corporation (Amendment)
Ordinance 1970. (Added, 58 of 1970, s. 2)

9B. Where-

(a)the Corporation has entered into, or proposes to enter into, a
contract of insurance under section 9 with, or for the benefit
of, any person; and

(b)another person has advanced, or proposes to advance,
moneys to the first-mentioned person for the purpose of
financing, in whole or in part, the acts and transactions, which
are the subject matter of the contract of insurance,

the Corporation may guarantee to that other person the re-payment
of the whole or any part of the moneys advanced or to be advanced
by him and the payment of the whole or any part of any interest or
other charges that may become payable to him in respect of those
moneys. (Added, 8 of 1974, s. 3)

PART III

ADVISORY BO~

10. (1) There is hereby established an Advisory Board to advise
the Corporation in the conduct of its business under this Ordinance.





(2) The Advisory Board shall consist of-

(a)the Director of Commerce and Industry or his representative;

(b)the Executive Director, Hong Kong Trade Development
Council, or his representative; and

(c) not more than 10 other members.

(3) The members of the Advisory Board, other than the Director
of Commerce and Industry and the Executive Director, Hong
Kong Trade Development Council-

(a)shall be appointed by the Governor for a term not exceeding 3
years at a time; and

(b)shall upon appointment take an oath before a justice of the
peace in the form prescribed in the First Schedule.

(4) If a member of the Advisory Board has any pecuniary interest,
direct or indirect, in any contract or proposed contract or other matter,
and is present at a meeting of the Board at which the contract or other
matter is the subject of consideration, he shall, as soon as practicable
after the commencement of the meeting of the Board, disclose to the
Board the fact and the nature of his interest.

(5) The Corporation shall not be bound by the advice of the
Advisory Board.

PART IV

POLICY OF THE CORPORATION

11. The Corporation shall keep the Financial Secretary informed of
the decisions of the Corporation insofar as they relate to matters of
policy in relation to the conduct of its business.

1

12. (1) The policy pursued by the Corporation with respect to any
of the following matters, namely

(a)the classes of contracts of insurance into which the
Corporation will enter;

(b)the nature and extent of the risks that may be covered under
contracts of insurance entered into by the Corporation;

(c)the undertaking king of liabilities in relation to trade with
particular countries;

(d)the organization of the finances of the Corporation and the
determination of the use to which any surpluses acquired by
the Corporation are to be put;

(e)the determination of the total amount of the capital and
reserves required by the Corporation taking into account the
sums at risk under contracts of insurance entered into by the
Corporation; and

(f) the giving of guarantees, (Added, 8 of 1974, s. 4)





shall be subject to the approval of the Financial Secretary:

Provided that nothing in this subsection shall prevent the
Corporation, when it considers an immediate decision is required, from
pursuing a policy which has not been- approved by the Financial
Secretary if it seeks his approval of such policy at the first available
opportunity.

(2) Nothing in subsection (1) shall be construed as-

(a)requiring the approval of the Financial Secretary to the
entering by the Corporation into a particular contract of
insurance or the giving by the Corporation of a particular
guarantee; or

(b)empowering the Financial Secretary to determine that the
Corporation shall or shall not enter into a particular contract of
insurance or give a particular guarantee,

but the Corporation shall not enter into a particular contract of
insurance or give a particular guarantee unless the contract or guarantee
is in accordance with the policy approved by the Financial Secretary.
(Replaced, 8 of 1974, s. 4)

(3) In this section-

'surplus' means those balances which the Corporation has in hand at
the end of any financial year and which are not required to meet

(a)payments at that time due to be made as a result of claims
under examination in respect of contracts of insurance entered
into by the Corporation;

(b)payments due to be made in respect of the operating expenses
of the Corporation;

(c)provision for expenditure on capital items, on replacements of
fixed assets and on amortization payments incurred by the
Corporation;

(d)such sums as in the opinion of the Corporation may be
required to cover the unexpired risks on contracts of insurance
entered into by the Corporation; and

(e) any other liabilities.

13. (1) A contract of insurance entered into by the Corporation
shall specify a percentage as the percentage of the amount of the loss,
as defined in the contract, to which the indemnity under the contract
extends.

(2) The maximum percentage so specified in any contract of
insurance shall not exceed 85 cent or such other maximum percentage as
may be prescribed by the Legislative Council by resolution.





PART V

POWERS OF THE CORPORATION

14. The Corporation may do, within the Colony or elsewhere, all
things necessary or convenient to be done for and in connexion with, or
incidental to, the carrying on of its business and, in particular, may

(a)acquire, hold and dispose of immovable or movable property;

(b) enter into any contract; and

(e)pay to the Government out of surpluses held by the
Corporation such sums as may be determined pursuant to the
policy approved in this respect by the Financial Secretary
under section 12(1).

15. The Corporation may, with the approval of the Governor,
establish, manage and control, or enter into an arrangement with an
insurance company or association for the establishment, management
and control by such company or association, either alone or jointly with
the Corporation, of a provident fund scheme for the benefit of the
Commissioner and any of the officers of the Corporation, or of any
specified class of officer of the Corporation, and if so required by rules
governing such scheme may make contributions thereto in accordance
with such rules.

PART VI

STAFF

16. Subject to the provisions of section 17, the Corporation may
appoint such officers as it thinks necessary.

17. (1) The terms and conditions of employment of officers
appointed by the Corporation shall be such as are determined by the
Corporation with the approval of the Financial Secretary.

(2) The appointment by the Corporation of an officer whose salary
exceeds $85,000 per year shall be subject to the approval of the Governor.
(Amended, 8 of 1974, s. 5)

PART VII

FINANCE

18. The Government shall guarantee the payment of all moneys due
by the Corporation, but nothing in this section shall authorize a creditor
or other person claiming against the Corporation to sue the Government
in respect of his claim.





19. The Financial Secretary may pay to the Corporation from the
general revenue of the Colony or the Development Loan Fund, in such
amounts and at such times as he determines, sums of money not
exceeding in the aggregate 520,000,000, and the capital of the
Corporation shall consist of the amounts so paid to the Corporation.
(Amended, 8 of 1974, s. 6)

20. (1) The Financial Secretary may, out of moneys appropriated by
the Legislative Council for the purposes of this Ordinance, make
advances to the Corporation of such amounts, and upon such terms
and conditions with respect to repayment, payment of interest and
otherwise, as the Financial Secretary may determine.

(2) The Corporation may borrow or otherwise raise money on such
security as may be necessary, and, for that purpose, charge all or any
part of the property of the Corporation, but without the prior approval
of the Financial Secretary no sum shall be borrowed or otherwise raised
under this subsection which itself or together with all other sums
previously borrowed or otherwise raised under this subsection and still
outstanding exceeds or in the aggregate exceed 5 per cent of the capital
and reserves of the Corporation.

21. (1) The Corporation shall open and maintain an account with
such bank as the Financial Secretary may approve.

(2) The Corporation shall pay all moneys received by it into such
an account as is referred to in subsection (1).

22. (1) Save as otherwise provided by this Ordinance, the moneys
of the Corporation shall be applied only

(a)in payment or discharge of the expenses, charges and
liabilities incurred or undertaken by the Corporation in the
exercise of its powers or the performance of its functions and
duties under this Ordinance; and

(b)in payment of the remuneration and allowances of the
Commissioner.

(2) Moneys of the Corporation not immediately required for the
purposes of the Corporation may be invested on deposit with any bank
or in such other manner as the Financial Secretary may direct.

23. The contingent liability of the Corporation under contracts
of insurance shall not at any time exceed the sum of one thousand
seven hundred and fifty million dollars or such other sum as may
be determined by the Legislative Council by resolution.
(Amended, L.N. 135/67, L.N. 19/69, L.N. 75/71, L.N. 209/73 and L.N.
210/74)

24. (1) The Corporation shall keep proper accounts of all income
and expenditure and shall maintain proper and adequate records
thereof.





(2) As soon as may be convenient after the end of each financial
year, the Corporation shall cause to be drawn up, in such form as the
Financial Secretary may approve, a statement of its income and
expenditure during such financial year and a statement of the assets and
liabilities of the Corporation on the last day thereof.

25. (1) The Corporation shall with the approval of the Financial
Secretary appoint auditors, who shall be entitled at any time to have
access to all accounts, records and documents of the Corporation and
to require such information and explanation thereon as they may think
fit.

(2) The auditors shall audit the statements drawn up under section
24(2) as soon as possible and shall make a report thereon to the
Corporation.

26. The Director of Audit and any public officer authorized by him
shall be entitled at all reasonable times to full and free access to all
accounts, records and documents of the Corporation relating directly or
indirectly to the receipt or payment of moneys by the Corporation or to
the acquisition custody or disposal of assets of the Corporation.

27. (1) The profits of the Corporation shall not be subject to
taxation.

(2) Notwithstanding the provisions of the Stamp Ordinance, the
Corporation shall not be liable to pay stamp duty in excess of $5 in
respect of any instrument or document executed by or on behalf of the
Corporation.

28. (1) The Corporation shall, within a period of 6 months, or within
such longer period as the Governor may determine, after the end of each
financial year, furnish to the Governor a report of its operations during
that financial year, copies of the financial statements in respect of that
year drawn up under section 24(2) and a copy of the auditors' report on
those statements.

(2) The Governor shall cause to be laid on the table of the
Legislative Council the reports and financial statements furnished to him
pursuant to subsection (1).

PART VIII

MISCELLANEOUS

29. (1) The Governor may give to the Financial Secretary and the
Corporation such directions as he thinks fit with respect to the exercise
or performance of their respective powers, functions and duties under
this Ordinance, either generally or in any particular case.

(2) The Financial Secretary and.the Corporation shall, in the
exercise or performance of their respective powers, functions and





duties under this Ordinance, comply with any directions given by the
Governor under subsection (1).

30. Without prejudice to the duty of the Corporation to comply
with the provisions of this Ordinance, a contract of insurance entered
into, or a guarantee given, by the Corporation shall not be invalidated
by reason of a contravention by the Corporation of any provision

of this Ordinance. (Amended, 8 of 1974, s. 7)

31. (1) The Commissioner and such other officers of the
Corporation as the Corporation may require shall, before entering on the
performance of their duties, take an oath before a justice of the peace in
the form prescribed in the Second Schedule.

(2) Any person who in the performance of his functions or duty, or
in the course of his employment, under or in connexion with the
provisions of this Ordinance has acquired, or has access to, information
relating to the affairs of any person shall not, except in performance of
his functions or duty, or in the course of his employment, under or in
connexion with the provisions of this Ordinance, communicate or make
available that information to any other person.

(3) Any person who contravenes the provisions of subsection (2)
shall be guilty of an offence and shall be liable on conviction to a fine of
$ 10,000 and to imprisonment for 2 years.

32. Any person who wilfully makes a statement which is false
or misleading in a material particular in or in connexion with an
application or proposal for insurance or a guarantee, or for the
purposes of a claim under a contract of insurance or a guarantee,
under this Ordinance shall be guilty of an offence and shall be liable
on conviction to a fine of $10,000 and to imprisonment for 2 years.
(Amended, 8 of 1974, s. 8)

FIRST SCHEDULE [s. 10.1

Oath or Affirmation of Secrecy

Advisory Board

I . ................................................................................................ do swear by
Almighty God (or do solemnly and sincerely affirm and declare) that 1 will not,
except in the performance of my functions as a member of the Advisory Board
established by the Hong Kong Export Credit Insurance Corporation Ordinance,
communicate or make available to another person any information relating to the
affairs of a person coming to my knowledge, or to which 1 have access, as a
member of the Advisory Board.

............(Signed)
In Hong Kong this day of

Before me . ........................................................................

Justice ofthe Peace.





SECOND SCHEDULE [s. 31.1

Oath or Affirmation of Secrecy

. ................................................................................................ do swear by
Almighty God (or do solemnly and sincerely affirm and declare) that I will not,
except in the performance of my functions or duty or in the course of my
employment under or in connexion with the Hong Kong Export Credit Insurance
Corporation Ordinance, communicate or make available to another person any
information relating to the affairs of a person coming to my knowledge, or to
which I have access, in the performance of my functions or duty or in the course of
my employment under or in connexion with the said Ordinance.

(Signed) ...................................................

In Hong Kong this day of

Before me . ........................................................................

Justice ofthe Peace.
Originally 38 of 1966. L.N. 135/67. L.N. 19/69. 58 of 1970. L.N. 75/71. L.N. 209/73. 8 of 1974. L.N. 210/74. Short title. Interpretation. Establishment of Corporation. Official seal and authentication thereof, and instruments executed thereunder. Certain contracts and instruments not required to be under seal. Appointment of Commissioner. Delegation of powers by the Corporation. Acting Commissioner. Business of the Corporation. Power of Corporation to enter into re-insurance agreement. (58 of 1970.) Guarantees. Advisory Board establishment. First Schedule. Policy. Approval of policy in respect of certain matters. Extent of indemnity. Powers of the Corporation. Provident fund scheme. Appointment of officers. Terms and conditions of employment. Corporation indemnified. Capital. Loans. Bank account. Application of moneys. Maximum liability. Accounts. Auditors. Access by the Director of Audit. Exemption from taxation, stamp duties. (Cap. 117.) Annual report. Power of Governor to give directions to the Financial Secretary and the Corporation. Validity of insurance contracts and guarantees. Secrecy. Second Schedule. False statements. (Cap. 1115.) (Cap. 1115.)

Originally 38 of 1966. L.N. 135/67. L.N. 19/69. 58 of 1970. L.N. 75/71. L.N. 209/73. 8 of 1974. L.N. 210/74. Short title. Interpretation. Establishment of Corporation. Official seal and authentication thereof, and instruments executed thereunder. Certain contracts and instruments not required to be under seal. Appointment of Commissioner. Delegation of powers by the Corporation. Acting Commissioner. Business of the Corporation. Power of Corporation to enter into re-insurance agreement. (58 of 1970.) Guarantees. Advisory Board establishment. First Schedule. Policy. Approval of policy in respect of certain matters. Extent of indemnity. Powers of the Corporation. Provident fund scheme. Appointment of officers. Terms and conditions of employment. Corporation indemnified. Capital. Loans. Bank account. Application of moneys. Maximum liability. Accounts. Auditors. Access by the Director of Audit. Exemption from taxation, stamp duties. (Cap. 117.) Annual report. Power of Governor to give directions to the Financial Secretary and the Corporation. Validity of insurance contracts and guarantees. Secrecy. Second Schedule. False statements. (Cap. 1115.) (Cap. 1115.)

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