New OECD country risk classification

The latest OECD country risk classification was published on 2nd February, 2024: https://www.oecd.org/trade/topics/export-credits/documents/cre-crc-current-english.pdf   

• The classification of 4 countries has been improved: Montenegro has moved from class 7 to class 6, Georgia from class 6 to class 5, Qatar from class 3 to class 2 and Oman from class 5 to class 4.
• Country risk classifications are one of the most fundamental building blocks of the Arrangement rules on minimum premium rates for credit risk. They are produced solely for the purpose of setting minimum premium rates for transactions supported according to the Arrangement, and are made public so that any country that is not an OECD Member or a Participant to the Arrangement may observe the rules of the Arrangement. Neither the Participants to the Arrangement, nor the OECD Secretariat, endorse nor encourage their use for any other purpose.
• Country risk includes transfer and convertibility risk (i.e. the risk that a government imposes capital or exchange controls that prevent companies or individuals from converting local currency into foreign currency and/or transferring funds to creditors outside the country) and force majeure risk (e.g. wars, expropriations, revolutions, civil unrest, floods, earthquakes, etc.).
• A group of country risk experts from export credit agencies (including Slovenia) meets several times a year to update country risk and its classification. These meetings are organised in such a way as to ensure that each country is reviewed whenever a significant change is observed, at least once a year. The list of country risk classifications is publicly available and published on the OECD website after each meeting, but the meetings themselves and the exchanges and discussions that take place are kept strictly confidential.
• Country risk is classified using a two-step methodology: a quantitative model ("Country Risk Assessment Model" - CRAM) and a qualitative assessment, provided by OECD country risk experts, which takes into account factors not included in the model. This may lead to an adjustment of the country score (upwards or downwards) compared to the CRAM results. Any adjustment must be agreed by the experts.
• The CMSR has its own methodology for assessing country risk, which takes into account both quantitative (the basics of the methodology are similar to the CRAM model) and qualitative aspects.