TRANSFER RESTRICTION Covered Risk Clause Samples
A Transfer Restriction clause limits or prohibits the ability of a party to transfer its rights or obligations under an agreement to another party. In practice, this means that a party cannot assign, sell, or otherwise transfer its interest in the contract without meeting certain conditions, such as obtaining prior written consent from the other party. This clause is commonly used to maintain control over who is involved in the contract and to prevent unwanted third parties from assuming contractual rights or obligations, thereby reducing the risk of dealing with unknown or unapproved entities.
TRANSFER RESTRICTION
Covered Risk. 3.1 The guarantee against Transfer Restriction shall cover a Loss due to any action or inaction by the Host Government, or pursuant to such action or inaction by the Host Government by entities authorized under the laws of the Host Country to engage in foreign exchange transactions, which prevents, directly or indirectly, both the Guarantee Holder and the Project Enterprise from legally:
(a) converting into the Guarantee Currency the Local Currency held to make a Scheduled Payment, including the denial of such conversion in an exchange rate category at least as favorable as that used to determine the Reference Rate of Exchange; or
(b) transferring outside of the Host Country the Guarantee Currency constituting a Scheduled Payment; provided that the Guarantee Holder or the Project Enterprise, or both, as required:
TRANSFER RESTRICTION
Covered Risk. 3.1 The guarantee against Transfer Restriction shall cover a Loss due to any action or inaction by the Host Government, or pursuant to such action or inaction by the Host Government by entities authorized under the laws of the Host Country to engage in foreign exchange transactions, which prevents, directly or indirectly, both the Guarantee Holder and the Project Enterprise from legally:
(a) converting into the Guarantee Currency the Local Currency held to make payment of Guaranteed Reimbursement Amounts, including the denial of such conversion in an exchange rate category at least as favorable as that used to determine the Reference Rate of Exchange; or
(b) transferring outside of the Host Country the Guarantee Currency constituting Guaranteed Reimbursement Amounts; provided that the Guarantee Holder or the Project Enterprise, or both, as required:
TRANSFER RESTRICTION
Covered Risk. 3.1 The guarantee against Transfer Restriction shall cover a Loss due to any action or inaction by the Host Government, or pursuant to such action or inaction by the Host Government by entities authorized under the laws of the Host Country to engage in foreign exchange transactions, which prevents, directly or indirectly, both the Guarantee Holder and the Project Enterprise from legally:
(a) converting into the Guarantee Currency the Local Currency constituting:
(i) dividends, profits or other monetary benefits derived from the Guaranteed Investment;
(ii) proceeds from the disposal of, or other return of, the Guaranteed Investment; or
(iii) a return on the Guaranteed Investment; including the denial of such conversion in an exchange rate category at least as favorable as that used to determine the Reference Rate of Exchange; or
(b) transferring outside of the Host Country the Guarantee Currency constituting a return of, or a return on, the Guaranteed Investment; provided that the Guarantee Holder or the Project Enterprise, or both, as required:
(x) has during the applicable Waiting Period continuously applied for and failed to convert the Local Currency or to transfer the Guarantee Currency through all mechanisms permitted in accordance with the relevant laws, regulations and procedures of the Host Country; and
(y) had on the Effective Date the legal right within the Host Country to convert the Local Currency and transfer the Guarantee Currency.
3.2 A Loss due to the deprivation by the Host Government of the use and control of funds constituting dividends, profits or other monetary benefits derived from the Guaranteed Investment shall only be covered under Subsection 4.1(b).