On Monday 6 December, the European Commission adopted a revised Communication on short-term export-credit insurance, including some adjustments.
The Communication sets out rules to ensure that government support for export credits does not distort competition between private and public (or publicly supported) export-credit insurance providers. The objective of this text is also to ensure a level playing field for exporters from different Member States.
The revised Communication on short-term export-credit insurance will apply from 1 January 2022 (see EUROPE 12767/18).
Export credits allow foreign buyers of goods and services to defer payment. Deferred payments imply a credit risk for sellers against which they insure themselves (export-credit insurance).
In 2019, the European Commission launched an evaluation of the 2012 Communication on short-term export-credit insurance.
A number of targeted adjustments are planned. For example, the Communication modifies the eligibility criteria for small and medium-sized enterprises (SMEs) which, under certain circumstances, can benefit from public insurance. While under the previous rules this possibility existed for SMEs with an annual export turnover of up to €2 million, in the new revised Communication on short-term export-credit insurance this threshold is raised to €2.5 million.
Phasing out of the adjusted list of non-marketable risk countries. In March 2020, due to Covid-19, the European Commission identified a lack of private insurance capacity for short-term export credits in general and considered all commercial and political risks associated with exports to the countries listed in the Annex to the revised Communication on short-term export-credit insurance as temporarily ‘non-marketable’.
Accordingly, the European Commission has amended the Annex to make short-term export-credit insurance more widely available by temporarily allowing public insurers to intervene to provide insurance for exports to all countries. The amendment further expanded the flexibility introduced by the March 2020 State aid Temporary Framework to support the economy in the context of Covid-19.
The temporarily adjusted list of non-marketable risk countries has been extended in subsequent amendments to the Temporary Framework until the latest amendment on 18 November 2021.
Following strong feedback from the private sector in favour of a return to market normality, in this amended version of the temporary framework, the European Commission found that a long-term prolongation of the temporary removal would not be necessary. Therefore, the amended Temporary Framework envisages a prolongation of 3 months (from 31 December 2021 to 31 March 2022) to allow sufficient time for phasing out.
Link to the communication: https://bit.ly/3GmJ53p (Original version in French by Lionel Changeur)