19.12.2012   

EN

Official Journal of the European Union

C 392/1

1.

Export subsidies can adversely affect competition in the marketplace among potential rival suppliers of goods and services. That is why the Commission, as the guardian of competition under the Treaty, has always strongly condemned export aid for intra-Union trade and for exports outside the Union. To prevent Member States’ support for export-credit insurance from distorting competition, its assessment under Union State aid rules needs to be clarified.

2.

The Commission has used its power to regulate State aid in the area of short-term export-credit insurance to address actual or potential distortions of competition in the internal market, not only among exporters in different Member States (in trade within and outside the Union), but also among export-credit insurers operating in the Union. In 1997, the Commission laid down the principles for State intervention in its Communication to the Member States pursuant to Article 93(1) of the EC Treaty applying Articles 92 and 93 of the Treaty to short-term export-credit insurance (1) (‘the 1997 Communication’). The 1997 Communication was to be applied for a period of five years from 1 January 1998. It was subsequently amended and its period of application was prolonged in 2001 (2), 2004 (3), 2005 (4) and 2010 (5). It now applies until 31 December 2012.

3.

Experience gained in applying the 1997 Communication, in particular during the financial crisis between 2009 and 2011, suggests that the Commission’s policy in this area should be reviewed.

4.

The rules set out in this Communication will help to ensure that State aid does not distort competition among private and public or publicly supported export-credit insurers and to create a level-playing field among exporters.

5.

It aims to give Member States more detailed guidance about the principles on which the Commission intends to base its interpretation of Articles 107 and 108 of the Treaty and their application to short-term export-credit insurance. It should make the Commission’s policy in this area as transparent as possible and ensure predictability and equal treatment. To that end, it lays down a set of conditions that must be fulfilled when State insurers wish to enter the short-term export- credit insurance market for marketable risks.

6.

Risks that are in principle non-marketable are outside the scope of this Communication.

7.

Section 2 describes the scope of this Communication and the definitions used in it. Section 3 deals with the applicability of Article 107(1) of the Treaty and the general prohibition of State aid for the export-credit insurance of marketable risks. Finally, Section 4 provides for some exceptions from the definition of marketable risks and specifies the conditions for State intervention in the insurance of temporarily non-marketable risks.

8.

The Commission will apply the principles set out in this Communication only to export-credit insurance with a risk period of less than two years. All other export finance instruments are excluded from the scope of this Communication.

9.

For the purposes of this Communication the following definitions will apply:

10.

Article 107(1) of the Treaty states that ‘any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market’.

11.

If export-credit insurance is provided by State insurers, it involves State resources. The involvement of the State may give the insurers and/or the exporters a selective advantage and could thereby distort or threaten to distort competition and affect trade between Member States. The following principles are designed to provide guidance on how such measures will be assessed under State aid rules.

12.

If State insurers have certain advantages compared to private credit insurers, State aid may be involved. The advantages can take different forms and might include, for example:

13.

The advantages for State insurers listed in point 12 with regard to marketable risks affect intra-Union trade in credit insurance services. They lead to variations in the insurance cover available for marketable risks in different Member States. This distorts competition among insurers in different Member States and has secondary effects on intra-Union trade regardless of whether intra-Union exports or exports outside the Union are concerned (7). It is necessary to define the conditions under which State insurers can operate if they have such advantages compared to private credit insurers, in order to ensure they do not benefit from State aid. This requires that they should not be able to insure marketable risks.

14.

Advantages for State insurers are also sometimes passed on to exporters, at least in part. Such advantages may distort competition and trade and constitute State aid within the meaning of Article 107(1) of the Treaty. However, if the conditions for the provision of export-credit insurance for marketable risks, as set out in section 4.3 of this Communication, are fulfilled, the Commission will consider that no undue advantage has been passed on to exporters.

15.

As stated in point 13, if State insurers have any advantages compared to private credit insurers, as described in point 12, they must not insure marketable risks. If State insurers or their subsidiaries wish to insure marketable risks, it must be ensured that in so doing, they do not directly or indirectly benefit from State aid. To this end, they must have a certain amount of own funds (a solvency margin, including a guarantee fund) and technical provisions (an equalisation reserve) and must have obtained the required authorisation in accordance with Directive 73/239/EEC. They must also at least keep a separate administration account and separate accounts for their insurance of marketable risks and non-marketable risks for the account of or guaranteed by the State, to show that they do not receive State aid for their insurance of marketable risks. The accounts for businesses insured on the insurer’s own account should comply with Council Directive 91/674/EEC of 19 December 1991 on the annual accounts and consolidated accounts of insurance undertakings (8).

16.

Member States providing reinsurance cover to an export-credit insurer by way of participation or involvement in private sector reinsurance treaties covering marketable and non-marketable risks, must be able to demonstrate that the arrangements do not involve State aid as referred to in point 12(f).

17.

State insurers may provide export-credit insurance for temporarily non-marketable risks, subject to the conditions set out in this Communication.

18.

Notwithstanding the definition of marketable risks, certain commercial and political risks on buyers established in the countries listed in the Annex, are considered temporarily non-marketable in the following cases:

19.

To minimise distortions of competition in the internal market, risks which are considered temporarily non-marketable in accordance with point 18 can be covered by State insurers, provided they fulfil the conditions in section 4.3.

20.

The quality of cover offered by State insurers must be consistent with market standards. In particular, only economically justified risks, that is to say, risks that are acceptable on the basis of sound underwriting principles, can be covered. The maximum percentage of cover must be 95 % for commercial risks and political risks and the claims waiting period must be a minimum of 90 days.

21.

Sound underwriting principles must always be applied to the assessment of risks. Accordingly, the risk of financially unsound transactions must not be eligible for cover under publicly supported schemes. With regard to such principles, risk acceptance criteria must be explicit. If a business relationship already exists, exporters must have a positive trading and/or payment experience. Buyers must have a clean claims record, the probability of the buyers’ default must be acceptable and their internal and/or external financial ratings must also be acceptable.

22.

Risk-carrying in the export-credit insurance contract must be remunerated by an adequate premium. To minimise the crowding out of private credit insurers, average premiums under publicly supported schemes must be higher than the average premiums charged by private credit insurers for similar risks. This requirement ensures the phasing out of State intervention, because the higher premium will ensure that exporters return to private credit insurers as soon as market conditions allow them to do so and the risk becomes marketable again.

23.

Pricing is considered adequate if the minimum premium (10) (‘safe-harbour premium’) for the relevant buyers’ risk category (11) as set out in the following table is charged. The safe-harbour premium applies unless Member States provide evidence that these rates are inadequate for the risk in question. For a whole turnover policy, the risk category must correspond to the average risk of buyers covered by the policy.

24.

For co-insurance, quota share and top-up cover, pricing is considered adequate only if the premium charged is at least 30 % higher than the premium for the (original) cover provided by a private credit insurer.

25.

An administration fee must be added to the risk premium regardless of the term of the contract in order for pricing to be considered adequate.

26.

Member States must publish the schemes put in place for risks which are considered temporarily non-marketable in accordance with point 18 on the websites of State insurers, specifying all applicable conditions.

27.

They must submit annual reports to the Commission on risks which are considered temporarily non-marketable in accordance with point 18 and are covered by State insurers. They must do so at the latest on 31 July of the year following the intervention.

28.

The report must contain information on use of each scheme, including in particular the total volume of credit limits granted, turnover insured, premiums charged, claims registered and paid, amounts recovered and the administrative costs of the scheme. The Commission will publish the reports on its website.

29.

The risks specified in point 18(a) can be covered by State insurers, subject to the conditions in section 4.3. The Commission does not have to be notified in such cases.

30.

The risks specified in point 18(b), (c) and (d) can be covered by State insurers, subject to the conditions in section 4.3 and following notification to and approval by the Commission.

31.

Failure to fulfil any one of the conditions set out in Section 4.3 does not mean that the export-credit insurance or insurance scheme is automatically prohibited. If a Member States wishes to deviate from any of the conditions or if there is any doubt about whether a planned export-credit insurance scheme fulfils the conditions set out in this Communication, the Member State must notify the scheme to the Commission.

32.

Analysis under State aid rules does not prejudge the compatibility of a given measure with other Treaty provisions.

33.

When determining whether the lack of sufficient private capacity justifies the temporary removal of a country from the list of marketable risk countries, as referred to in point 18(a), the Commission will take the following factors into account, in order of priority:

34.

When market capacity becomes insufficient to cover all economically justifiable risks, the Commission may revise the list of marketable risk countries at the written request of at least three Member States or on its own initiative.

35.

If the Commission intends to modify the list of marketable risk countries in the Annex, it will consult and seek information from Member States, private credit insurers and interested parties. The consultation and the type of information sought will be announced on the Commission's website. The consultation period will usually not be longer than 20 working days. When, on the basis of the information gathered, the Commission decides to modify the list of marketable risk countries, it will inform Member States in writing and announce the decision on its website.

36.

The temporary removal of a country from the list of marketable risk countries will be valid for no less than 12 months. Insurance policies relating to the temporarily removed country which are signed during that period may be valid for a maximum of 180 days after the date on which the temporary removal ceases. New insurance policies may not be signed after that date. Three months before the temporary removal ceases, the Commission will consider whether to prolong the removal of the country concerned from the list. If the Commission determines that market capacity is still insufficient to cover all economically justifiable risks, taking into account the factors set out in point 33, it may prolong the temporary removal of the country from the list, in accordance with point 35.

37.

The evidence currently available to the Commission suggests that there is a market gap as regards the risks specified in point 18(b) and (c) and that those risks are therefore non-marketable. It must be borne in mind, however, that the lack of cover does not exist in every Member State and that the situation could change over time, as the private sector might become interested in this segment of the market. State intervention should only be allowed for risks which the market would otherwise not cover.

38.

For these reasons, if a Member State wants to cover the risks specified in point 18(b) or (c), it must make a notification to the Commission pursuant to Article 108(3) of the Treaty and demonstrate in its notification that it has contacted the main credit insurers and brokers in that Member State (17) and given them an opportunity to provide evidence that cover for the risks concerned is available there. If the credit insurers concerned do not give the Member State or the Commission information about the conditions of cover and insured volumes for the type of risks the Member State wants to cover within 30 days of receiving a request from the Member State to do so, or if the information provided does not demonstrate that cover for the risks concerned is available in that Member State, the Commission will consider the risks temporarily non-marketable.

39.

As regards the risks specified in point 18(d), the Member State concerned must, in its notification to the Commission pursuant to Article 108(3) of the Treaty, demonstrate that cover is unavailable for exporters in that particular Member State due to a supply shock in the private insurance market, in particular the withdrawal of a major credit insurer from the Member State concerned, reduced capacity or a limited range of products compared to other Member States.

40.

The Commission will apply the principles in this Communication from 1 January 2013 until 31 December 2018, except for point 18(a) and section 5.2, which will be applied from the date of adoption of this Communication.