The Financial Protocol between Israel and Vietnam has been signed on April 2008 for the amount of $150m and extended on November 2011 for the total amount of $250m.Aim: - Developing the economic relations between the two countries and promote Israeli export to Vietnam using an efficient financial structure.- Broadening of the financing possibilities for the Israeli exporters to Vietnam.

Financial Protocol with Vietnam

 The Players

Exporter (seller)Costumer (buyer)

Foreign bank Local bank

Insurance provider

Inter – Bank Credit Line

Cash

Insurance policy

RepaymentsRepayments

Shipments

LoanLoanLoanLoan

Exporter (seller)

Costumer (buyer)

Foreign bank Local bank

Inter – Bank Credit Line in the Framework of the Protocol

Individual Loan Agreement

Financial Protocol

Specific Commercial Contract

Fina

nce

Insurance

Framework Loan Agreement

Vietnamese Buyer

Lending bank

Israeli Exporter

Vietnamese

MOF

Guarantee

Repayment

How does it Work?

Israeli Exporter

Lending Bank

Vietnamese MOF

Disb

urse

Disb

urse

-men

ts-m

ents

Insuranc

Insurancee

Repayment of Repayment of the loanthe loan

Execution of DealExecution of Deal

Loan Loan AgreementAgreement

Loan Loan AgreemeAgreeme

ntnt

Vietnamese Buyer

Framework Agreements were signed between Israel banks and Vietnamese MOF.For each transaction a Specific Loan Agreement is signed.The exporter executes the deliveries to the buyer.Receipt of export documents by the buyer and request from Vietnamese MOF to set up the loan. The Israel bank finances the exporter and indebts the Vietnamese MOF.Ashra covers the Israeli bank against non-repayment of the loan guaranteed by Vietnamese MOF.

Description of loan procedure

Lending banks under the Protocol

Eligibility for Financing

Transaction AmountFinancing Option

Up to $25MlnOption A only ( 8 years)

Over $25MlnOption A (8) or B (10)

Credit Terms

Down Payment - 15% of transaction amount

Long Term Credit - 85% of transaction, Insured by Ashra:– Option A: 8 years Repayment Period:

• 16 semi-annual repayments commencing on 6th month• Floating Interest: Libor + 0.25% p.a.

– Option B: 10 years Repayment Period: • 20 semi-annual repayments commencing on 6th month• Floating Interest: Libor + 0.35% p.a.

Protocol Terms Min Israeli Content – 30%Min Israeli Goods and Services – 25%Max Profit & other expenses – 5%Goods – Made Entirely in Israel or Made In Israel = 100%, otherwise X%Services – above 75% = 100%, otherwise X%Declaration Form

Israeli exporter Israeli exporter / packager :

Must be Company register in Israel In each case we examine the:

ExperienceEquityPerformance ability

If needed:Ask for collateralindemnity letter Bank guaranty

Advantages of the Protocol

Well-structured and prepared process, supported by financing facilities

Enables the Israeli Exporters to offer long term credit with favorable terms to the Vietnamese Buyers

Long term credit with financing terms

Reduced risk mitigation premium

Possibility for down payment financing

Short timetable

Allows the Vietnamese Buyer to benefit from Israeli goods and technologies in different sectors such as medical and health care, agricultural development, education, water treatment, energy, etc.

Advantages of the Protocol

Type of projects

Water Treatment

Medical Device

Agriculture

Protocol Trends

Medical

Agriculture

Communication

Infrastructure

Education