No C 101/2 Official  Journal  of the European  Communities 26. 4. 78 
II 
(Preparatory  Acts) 
ECONOMIC  AND  SOCIAL  COMMITTEE 
Opinion  on the  proposal  for a Council  Directive  relating  to common  principles  to be 
adopted  in export  credit  insurance  systems  for medium  and  long-term  transactions  with 
public  and  private  buyers 
The opinion  of the Committee  does  not relate  to any  published  text. 
A. LEGAL  BASIS  FOR  THE  OPINION 
At its 151st  plenary  session  held  on 27 September  1977  the  Committee,  acting  on a 
proposal  from  its Bureau,  decided  to deliver  an opinion  on the abovementioned  subject 
on its own  initiative. 
B. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  drew  up its opinion  at its 156th  plenary  session 
held in Brussels  on 1 and  2 March  1978. 
The opinion  is published  below: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to the fourth  paragraph  of Article  20 
of the Rules  of Procedure, 
Having  regard  to its decision  on 27 September  1977, 
following  a proposal  from  the  Bureau,  to deliver 
an own-initiative  opinion  on  the  proposal  for  a 
Council  Directive  relating  to common  principles  to 
be adopted  in export  credit  insurance  systems  for 
medium  and  long-term  transactions  with  public  and 
private  buyers, 
Having  regard  to its decision  of that  date  instructing 
the Section  for  Industry,  Commerce,  Crafts  and 
Services  to prepare  its work  on the matter, 
Having  regard  to the  opinion  issued  by the  Section 
for Industry,  Commerce,  Crafts  and  Services  at its 
meeting  on 8 February  1978, Having  regard  to the  report  submitted  by  the 
rapporteur,  Mr Miller, 
Having  regard  to its discussions  at its 156th  plenary 
session  held  on 1 and  2 March  1978  (meeting  of 
1 March  1978), 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
unanimously: 
I. GENERAL  COMMENTS 
1.1. The  Committee  welcomes  the  Commission's 
moves  towards  harmonization  of  export  credit 
insurance  within  the  Community,  given  the  likely 
effects  on eliminating  obstacles  to the  free  play  of 
26. 4. 78 Official  Journal  of the European  Communities No C 101/3 
competition.  At the same  time,  however,  it feels  that 
the present  proposals  should  only  be regarded  as a 
step towards  harmonization,  which  will  provide  the 
most  favourable  conditions  for Community  exports. 
Above  all, it is essential  that  the conditions  applicable 
to Community  exporters  are at least  as favourable  as 
those  which  apply  to the  exporters  of the  principal 
third  countries  regarding  facilities  made  available  by 
their  credit  insurance  systems  and  the  conditions  of 
financing  based  on the guarantees  which  these  systems 
provide.  The  Committee  would  make  the  further 
observation  that  any  attempt  at  further 
harmonization  is in danger  of being  ineffective 
without  a harmonization  of premiums,  of methods  of 
paying  such  premiums,  and  of insured  percentages 
and without  adoption  of a uniform  classification  of 
insured  importing  countries.  It notes  the  Commis-
sion's  intention  to continue  its efforts  to arrive  at such 
a harmonized  system.  It would  point  out  however 
that distortion  of competition  may  be caused  not only 
by differences  between  national  credit  insurance 
practices,  but  also  by different  levels  of national 
inflation  and  economic  or other  factors  causing  these 
differences.  In any  case,  the Committee  believes  that 
harmonization  should  be limited  only  to what  is 
necessary  to  ensure  fair  competition  between 
exporters  and  should  be based  on the best  features  of 
each  of the national  schemes. 
1.2. The  Committee  notes  the  Commission's 
intention  to set  up  an Advisory  Committee  for 
Export  Credit  Insurance,  to which  shall  be entrusted 
the tasks  of the  uniform  application  of the  present 
Directive.  The  function  of this  Committee  is 
essentially  a consultative  one  and  the references  to it 
are imprecise  and  leave  it to the  Commission  to 
consult  it when  it considers  it necessary.  The 
Committee  is of the opinion  that  the Committee  must 
be consulted  on any  problem  relating  to the uniform 
application  of the Directive. 
As to the  composition  of the  Committee,  the 
Committee  realizes  that  membership  will  depend  to a 
certain  extent  on the structure  of the credit  insurance 
industry  in each  Member  State,  but in its opinion  it is 
highly  desirable  that  representatives  of  the 
professional  areas  involved,  in particular  the insured, 
should  be represented  on the Committee. 
1.3. The  Committee  would  point  to  the 
disequilibrium  that  seems  to emerge  between  the 
relative  obligations  of the insurer  and  the insured.  It 
notes  that,  in various  parts  of the  proposal,  the 
obligations  of the  insured  are always  spelled  out  in 
an obligatory  fashion,  whereas  the obligations  of the 
insurer  are often  left vague  (e.g.  Annex  I (IV)  (2) (a) 
and Annex  III (VI)  (3)).  The  Committee  asks  that  this 
disequilibrium  be corrected. 1.4. The  Committee  notes  that  the proposal  does 
not cover  some  fields  of credit  insurance  such  as 
exchange  rate  risks  and  claims  under  adjustable  price 
clauses.  It calls  upon  the  Commission  to study  the 
possibility  of subsequently  making  proposals  to 
harmonize  the provisions  in these  areas,  so that  the 
system  adopted  in one  country  does  not  distort 
competition  between  European  exporters. 
1.5. The  Committee  suggests  that  before  the 
Council  adopts  this  draft  Directive,  it notes  the 
developments  in the  practice  of credit  insurance 
which  have  occurred  since  the Directive  was  drafted. 
For instance,  the  95  % maximum  mentioned  in 
Annex  II is now  out of line  with  some  methods  used, 
as is the minimum  four  months  for payment  of the 
loss. 
II. SPECIFIC  COMMENTS 
2.1. Preamble 
2.1.1.  The  Committee  feels  that  in the  third 
'whereas'  the  words  'may  give  rise  to distortion  in' 
should  be deleted  and  replaced  by 'are  obstacles  to 
the free  play  of. 
2.2. Articles  3, 4 and  S 
2.2.1.  The  Committee  would  refer  to  its 
comments  in 1.2 above. 
2.3. Annex  I 
2.3.1.  Sections  II and  III 'Scope  of the guarantee  and 
events  constituting  a cause  of  loss  and 
qualifying  period  for claims' 
The Committee  notes  that  Sections  A, C, D, E, G and 
H of Section  III refer  to '.. . months  after  the due 
date of a sum  remaining  unpaid'.  This  is clearly 
inappropriate  to the manufacturing  risk,  where  there 
will not  normally  be any  'sum  remaining  unpaid'. 
The Committee,  therefore,  recommends  that  the 
distinctions  made  in  Section  II between  the 
manufacturing  and  credit  risks  should  be extended 
into Section  III. 
2.3.2.  Section  III (C) 
The Committee  would  like  to see the interval  before 
the loss  is established  reduced  to three  months  and 
payment  by the  insurer  30 days  thereafter,  at the 
latest. 
2.3.3.  Section  III (E) 
The Committee  suggests  that  this  provision  should 
also be applied  where  the buyer  is public. 
No C 101/4 Official  Journal  of the European  Communities 26. 4. 78 
2.3.4.  Section  III (H) 
The Committee  would  like  to see a clearer  definition 
of the expression  'international  affairs'  and feels  that 
the loss  should  also  be related  to 'internal'  measures 
or decisions  of a government. 
2.3.5.  Section  IV 'Effective  date  and  extent  of the 
guarantee' 
1. Effective  date 
The Committee  feels  that  the  guarantee  of the 
manufacturing  risk should  be applied  retrospectively, 
to cover  costs  arising  between  the date  the contract 
came  into  force  and  the  date  when  all conditions 
precedent  to liability  laid  down  by the insurer  have 
been  fulfilled. 
As far as the credit  risk  is concerned,  the Committee 
would  suggest  the deletion  of the word  'all'  in the 
second  line.  It feels  the existing  wording  might  be 
extended  to 'technical  obligations',  which  would  be 
unjustifiable.  The  Committee  feels  the credit  risk 
should  become  effective  once  the  exporter  has 
fulfilled  his obligations  in such  a way  that  he has the 
right  to receive  payment  from  the buyer. 
2.3.6.  Section  V 'Indemnities:  General  principles  (b)' 
In the first  indent,  the Committee  would  prefer  to see 
the words  'to the satisfaction  of the insurer'  deleted. 
This is in line  with  the Committee's  comments  in 1.3 
above. 
In the  second  indent,  the Committee  suggests  the 
addition  of the words  'at the time  the contract  was 
signed'  after  'apply'  in the  fourth  line.  Otherwise, 
should  there  by any  subsequent  change  in the law, 
there  might  be a conflict  with  Section  III (D). 
2.3.7.  Section  V 'Indemnities' 
The Committee  suggests  that  after  paragraph  (c) of 
'General  principles'  an additional  indent  be inserted 
to the  effect  that  uniform  criteria  should  be laid 
down  relating  to the  time  limits  within  which 
indemnity  payments  by insurers  are  settled  and 
advances  paid  on expected  losses. 
2.3.8.  Section  V 
2. Calculation  of loss  for credit  risk 
(b) The  Committee  feels  the  wording  would  be 
clearer  if the  word  'and'  were  inserted  both before  (b) and  before  the second  indent.  It also 
feels  that  the expression  'any  expenses  saved  by 
the insured'  should  be spelled  out and  that  the 
rate of exchange  ruling  at the date  of loss  should 
apply  rather  than  that  applying  at the date  of 
signing  the  contract.  This  remark  about  the 
exchange  rate  to be used  applies  also  to Annexes 
III (V) and IV (IV). 
2.3.9.  Section  VI 'Premium' 
The Committee  takes  the view  that,  if the insured  can 
prove  the  guarantee  has  not  come  into  effect  in 
accordance  with  Section  IV, then  he should  be entit-
led to a refund  of premium  less  expenses  incurred. 
The same  should  apply  to Annexes  III (VI)  and  IV 
(VI). 
On the question  of harmonization  of premiums,  the 
Committee  refers  to its comments  in 1.1 above. 
2.4. Annex  II 
2.4.1.  Section  II 'Indemnities:  General  principles' 
On the grounds  that  harmonization  should  be on the 
basis  of the best  current  practice,  the Committee  feels 
that the maximum  amount  payable  in respect  of the 
calling  of a bond  should  be 100  % of the amount 
guaranteed  and  also  that  reference  to the minimum  of 
four months  should  be deleted. 
2.5. Annex  III 
2.5.1.  Section  I 'Common  principles  to be applied  to 
the direct  guarantee  to banks' 
The Committee  considers  that  the  word  'buyer' 
should  be replaced  by the word  'debtor'. 
2.5.2.  Section  III 'Extent  of the guarantee' 
4. The  Committee  queries  the  reasons  for  the 
minimum  period  of three  months.  It would  also 
prefer  the  word  'qualifying'  to be replaced  by 
'payment'. 
2.5.3.  Section  IV 'Effective  date  of the guarantee' 
The Committee  feels  that  this  should  be reworded  as 
follows: 
'The direct  guarantee  may  become  effective  as 
soon  as the bank  is advised  by the exporter  that: 
26. 4. 78 Official  Journal  of the European  Communities No C 101/5 
— the  goods  have  been  dispatched,  or 
— the  goods  have  been  dispatched  and 
Furthermore,  the  words  'as  soon  as'  in the  third 
indent  should  be deleted. 
2.5.4.  Section  V 'Principles  of indemnification' 
The Committee  suggests  this  should  read  'if the  loss 
is due  to lack  of due  diligence  by the bank 
2.5.5.  Section  VII  'Premium' 
The Committee  understands  that  it is not  always  the 
exporter  who  is liable  to pay  the  premium  and  it 
suggests,  therefore,  that  the wording  should  be: 
'The  giving  of a direct  guarantee  to the bank  shall 
be based  on payment  of a premium.' 
2.6. Annex  IV 
2.6.1.  Section  I 'Common  principles  to be applied  to 
the financial  guarantee' 
1. The  Committee  is of the  opinion  that  some 
general  provision  should  be made  in Annex  IV (I) 
about  the  desirability  of  harmonizing  insured 
percentages. 
2. The  Committee  also  considers  it should  be 
possible  to choose  a bank  not  established  in the 
country  of the  credit  insurer  or of the  institution 
which  has  given  the guarantee. 2.6.2.  Section  I 
2. The  Committee  suggests,  for the sake  of clarity, 
that the following  words  should  be added  at the end 
of the  sentence  'and  payable  under  the  loan 
agreement'. 
2.6.3.  Section  II 'Extent  of the guarantee' 
3. The  Committee  suggests  that  an  alternative 
translation  in French  and  German  is needed  for  the 
word  'losses'  in the English  version. 
2.6.4.  Section  VI 'Premium' 
The comments  made  in 2.5.5  above  apply  equally 
here. 
2.7. Annex  V 
2.7.1.  Section  A 
The Committee  fears  that  the  Commission's 
definition  of 'public  buyer'  may  be  interpreted 
differently  by the credit  insurers.  It would  like  to see 
fresh  attempts  made  at the  instigation  of  the 
Commission  to resolve  this  problem  and  would  also 
like to  see  a more  detailed  definition  of  the 
expressions  'State-trading  corporations'  and  'public-
corporations'  in subparagraph  (b). 
Conclusion 
Subject  to these  general  and  specific  comments  the 
Committee  approves  the  Commission's  draft 
Directive. 
Done  at Brussels,  1 March  1978. 
The Chairman 
of the Economic  and  Social  Committee 
Basil  de FERRANTI