Source: EURLEX
Language: en
Format: md

*|*

# 52015DC0130

**ANNUAL REVIEW BY THE COMMISSION of Member States' Annual Activity Reports on Export Credits in the sense of Regulation (EU) No 1233/2011 /\* COM/2015/0130 final - 2015/ () \*/**

  

1. Introduction

Regulation (EU) No
1233/2011 of the European Parliament and of the Council of 16 November 2011 on
the application of certain guidelines in the field of officially supported
export credits and repealing Council Decisions 2001/76 EC and 2001/77/EC[1] foresees in its Annex I
that Member States shall make available to the Commission an Annual Activity
Report in order to step up transparency at Union's level. The Commission shall
produce an annual review for the European Parliament based on this information.

The present annual review covers the
calendar year 2013. As regards the scope of this exercise, it concerns export
credit activities in the sense of Regulation (EU) No 1233/2011, i.e.
"medium and long term" transactions with a repayment period of 2
years or more. This review does neither cover short term export credit
transactions[2]
nor activities carried out by certain Export Credit Agencies (ECAs) outside the
field of export credits (such as insurance of investments). It also has to be
noted that in the case of some Member States, the function of Export Credit
Agency is performed by an insurance company operating under a public mandate.
In such cases, the managing of the public export credit program is strictly
separated from the private sector activities (the latter are of course not
subject of the present review).

The Commission has taken note of the
Resolution adopted on 2 July 2013 by European Parliament on the first reporting
exercise under Regulation (EU) No 1233/2011[3].

Bearing in mind the recommendations
contained in this Resolution – such as the recommendation to the Council
Working Group on Export Credits and the Commission to consult with the European
External Action Service on further developing the reporting methodology – the
Commission has also turned the particular attention of Member States to this
Resolution in view of subsequent reporting exercises.

2. Annual Activity Reports received for
the calendar year 2013

Annual Activity Reports have been received
from the following Member States: Austria, Belgium, Bulgaria, Croatia, Czech
Republic, Denmark, Finland, France, Germany, Hungary, Italy, Luxemburg, the
Netherlands, Poland, Portugal, Romania, Slovenia, Slovak Republic, Spain,
Sweden, the United Kingdom.

Cyprus, Estonia, Greece, Ireland, Latvia,
Lithuania and Malta did not have active export credit programs in the sense of
Regulation (EU) No 1233/2011 during the reporting year.

Like in the previous reporting exercise,
Member States have used a similar template for their reporting ("checklist"
format). While some Member States have chosen to link their Annual Activity
Report with national level annual reports published for the same period, others
have opted to describe extensively their activities directly in the reporting
template.

3. Analysis of the Annual Activity
Reports

a) General and financial information

The applicable regulatory framework
(Regulation (EU) No 1233/2011) focuses on rules for export credit transactions
and programs, but leaves it to the individual Member State to decide whether to
run an export credit program or not, and in the affirmative case how to
organise its respective Export Credit Agency (“ECA”).

In some Member States, the ECA is a
government department or agency. In others, an insurance company performs this
function under a public mandate and under government supervision. It is not
uncommon for Member States offering different categories of export credit
support to have more than one ECA (e.g. one agency providing official support
in the form of guarantee or insurance-style "pure cover" and a second
one to provide interest rate style support). In 2013, 21 EU Member
States were running export credit programs in the sense of Regulation (EU) No
1233/2011. These programs were managed by a total of 29 different agencies and
government departments.

As regards the types of export credit
support offered by European ECAs, the most common form remains "pure
cover" (i.e. the export transaction in question is actually financed by a
credit from a commercial bank, for which the ECA provides a guarantee or
insurance-type cover). All 21 Member States providing export credits in the
sense of Regulation (EU) No 1233/2011 during the reporting period offer this
kind of support. 14 Member States also offer other forms of support covered by
Regulation (EU) No 1233/2011 and the OECD Arrangement on Officially Supported
Export Credits[4],
such as direct credit or financing (in which the financing is directly provided
by the ECA, not by a commercial bank)[5] , re-financing[6] or interest rate
support schemes[7].
Several Annual Activity Reports also explicitly mention project finance[8] or tied aid[9].

It is always difficult to compare national
export credit programs with each other: Firstly, Member States have – within
the general export credit types mentioned in the previous paragraph – developed
a great diversity of financial products, secondly the impact of an export
credit program obviously also depends on the characteristics of the national
economy and on the capacities of the private financial sector. Under this
reserve, a comparison of the aggregate nominal risk exposure on 31 December
2013 provides at least a general idea of the size of the biggest “pure cover”
type export credit schemes:

The biggest European “pure cover” export credit schemes in 2013 (in billion Euro)

Germany || 87.7

France || 61.2

Sweden || 34.9

Italy || 21.6

United Kingdom[10] || 20.6

Finland || 11.0

Netherlands || 9.4

Spain || 8.5

Taking into account that there are specific
financing conditions prevailing in certain industrial sectors – e.g. aircraft
and shipbuilding – several Member States have also developed sector-specific
export credit products. As already mentioned above, European Export Credit
Agencies are active in a broad range of areas beyond the scope of the reporting
under Regulation (EU) No 1233/2011. The latter essentially covers medium and
long term export credit activities (as defined by the OECD Arrangement on
Officially Supported Export Credits). However, many European ECAs are also
offering such products as short term export credits and letter of credit
guarantees, manufacturing risk guarantees or investment insurance products. It
is useful to keep this in mind when assessing the wider economic role of ECAs.

Detailed information may be found in
Sections II and IV of the reporting template used for the Annual Activity
Reports, as well as in the general annual reports to which several Member
States explicitly refer.

In overall conclusion, the Annual Activity
Reports provide relevant financial information on the export credit programs in
2013. It however has to be stressed that according to Regulation (EU) No
1233/2011, this reporting is done in accordance with the respective Member
State's national legislative framework. This results in some differences in
presentation. That being said, the Commission has no specific observations on
the financial aspects of the Annual Activity Reports[11].

The Annual Activity Reports of the Czech
Republic, the Slovak Republic, and the United Kingdom specify contingent
liabilities in reference to Paragraph 1/last phrase of Annex 1 of Regulation
(EU) No 1233/2011..

b) Treatment of "environmental
risks, which can carry other relevant risks"

According to Paragraph 2 of Annex I of
Regulation (EU) No 1233/2011
Member States in their Annual Activity Reports “shall describe how
environmental risks, which can carry other relevant risks, are taken into
account in the officially supported export credit activities of their
ECAs."

19 Annual Activity Reports explicitly refer
to this provision. While Paragraph 2 of Annex I only mentions environmental
risks, several Member States[12]
explicitly refer to social impacts as well. Individual Member States in
treating Paragraph 2 of Annex I also mention human rights[13], fundamental labour
standards[14],
anti-bribery[15]
or general impact on development[16]
. The relevant processes of evaluating the risks in question typically aim at a
clear decision whether a given project is eligible for export credit support or
not (i.e. if the risks involved are disproportionate, no cover is provided). In
case of risks that are considered acceptable, export credit support is
typically connected with specific conditions, usually aiming at the enforcement
of mitigation measures and compliance with standards. An explicit reference to
such conditional cover may be found in the reports of Belgium, Denmark,
Hungary, Italy, Luxemburg, Poland, Portugal, Romania, the Slovenia and Spain.

Many Member States refer to the procedures
contained in the OECD Recommendation on Common Approaches for Officially Supported
Export Credits and Environmental and Social Due Diligence (the “Common
Approaches”)[17].

As regards Member States with several ECAs,
some have established a complementarity between the evaluation processes of
their respective agencies (such as Italy[18]
and the Czech Republic[19]).

c) Other
information contained in the Annual Activity Reports

In addition to the information already
mentioned in sections 3a) and b) above, the 21 Annual Activity Reports also
show that Member States in general have policies on export credits and
environment, anti-bribery and sustainable lending practices concerning low
income countries. The three relevant OECD Recommendations[20] play a major – but not
exclusive – role. Even Member States which are not OECD Members apply these instruments
or intend in principle to do so[21].

Many Member States in their reports state
that in particular the "Common Approaches" are applied beyond the
scope defined by the OECD[22].
In addition, in many cases relevant instruments and practices have been developed
related to the policy areas concerned, which aim at going beyond the content of
the OECD Recommendations[23].
In several cases, the ECAs in question have developed relevant instruments
themselves (e.g. a Corporate Social Responsibility policy or an ethics code)[24].

Like in the previous reporting exercise,
many Member States stress the special importance of human rights. Practically
all reports continue to reflect support for the developing of a human rights’
dimension under the new Common Approaches. For several Member States, human
rights considerations have a distinct status within their project assessment[25] In some cases, the
topic is directly linked with labour rights/rights of employees[26].

Quite a few Member States also dedicate
specific importance to anti-bribery and anti-corruption policies[27]. A broad range of
instruments (e.g. national legislation, domestic good practices, international
instruments) are in use.

Other Member States' policies linked to
export credit activities include transparency (openness and confidentiality
policy), dialogue with stakeholders civil society, contribution to sustainable
development, corporate social responsibility (either in the form of a CSR
policy for the ECA itself or by promoting efforts of exporters in this field),
and the promotion of respect of the OECD Guidelines for multinational
enterprises.

During the reporting period, Germany has
decided to stop granting export credits for supplies and services intended for
nuclear facilities (new and existing ones). Only in certain exceptional cases
(e.g. supplies and services improving the safety of existing facilities,
decommissioning of nuclear facilities, supplies and services for research and
medical facilities) will export credit coverage still be available in the future.

d) Compliance of ECAs with Union
objectives and obligations

According to Paragraph 3 of Annex I “the
Commission shall produce an annual review for the European Parliament based on
this information, including an evaluation regarding the compliance of ECAs with
Union objectives and obligations”.

The Treaty on the European Union (TEU)
enumerates the general objectives of the Union in its Article 3 and the
principles and objectives of the Union's External Action in its Article 21.

As regards the EU's common commercial
policy, reference to the principles and objectives of the Union's external
action is made in Article 206 and in the first paragraph of Article 207 of the
Treaty on the Functioning of the European Union, which read:

Article
206:

By establishing a
customs union in accordance with Articles 28 to 32, the Union shall contribute,
in the common interest, to the harmonious development of world trade, the
progressive abolition of restrictions on international trade and on foreign
direct investment, and the lowering of customs and other barriers.

Article 207:

The
common commercial policy shall be based on uniform principles, particularly
with regard to changes in tariff rates, the conclusion of tariff and trade
agreements relating to trade in goods and services, and the commercial aspects
of intellectual property, foreign direct investment, the achievement of
uniformity in measures of liberalisation, export policy and measures to protect trade such as those to be taken in the
event of dumping or subsidies. The common commercial policy shall be conducted
in the context of the principles and objectives of the Union’s external action.

The European Commission takes note that
Member States with export credit activities in the sense of EU Regulation
1233/2011 have established policies to accompany the management of their export
credit programs that are in line with the EU’s objectives. The export
credit-specific Policy Recommendations developed in the OECD - the only
international organisation to have developed specialised rules for this policy
area so far – are in common use, but the activities of Member States go beyond
this level.

Leaving aside the specific case of
Germany’s exit from providing export credits for the nuclear sector, there have
overall been no radical changes in the policies accompanying Member States’
export credit programs since the last reporting exercise, an observation which
is not supposed to imply that no progress would have been made at all.

Bearing in mind a recommendation contained
in the above-mentioned Resolution by the European Parliament of July 2013 on
guidance for future reporting exercises, the Commission already in the previous
Annual Review had issued a recommendation to notably use the work of
international monitoring institutions (including the UN) as guidance in further
policy developing. Member States’ reports, to a different degree, already use
such international instruments as references and the Commission encourages
further work in this direction. Further dialogue with the European External
Action Service when it comes to human rights policies would also be crucial.

The European Parliament has called upon the
Commission for a statement on whether Member States comply with Union
objectives and obligations; the European Commission considers that Member
States that have provided relevant information on the matter have overall
complied Articles 3 and 21 TEU. Of course, the European institutions may like
to set themselves jointly more ambitious political targets. The Commission
stands ready to facilitate and promote a relevant inter-institutional dialogue
in this regard.

As regards compliance with international
obligations and obligations under EU competition law, there have been no
disputes at WTO level involving European export credit programs during the
reporting period. No complaints concerning potential infringements of EU law
involving export credit agencies were received by the European Commission in
2013.

[1]       OJ
L 326, 8.12.2011, p. 45.

[2]       To
such transactions, the Communication of the Commission pursuant to Article
93(1) of the EC Treaty applying Articles 92 and 93 of the Treaty to short-term
export-credit insurance, applies.

[3]       European
Parliament resolution of 2 July 2013 on the first annual report from the
Commission to the European Parliament on the activities of Member States’
Export Credit Agencies (2012/2320 (INI)

[4]       The
OECD Arrangement on Officially Supported Export Credits forms an annexe to the
Regulation,

[5]       Bulgaria,
Czech Republic, Denmark, Finland, Hungary, Poland, Slovakia, Spain and United
Kingdom.

[6]       Slovakia
and Sweden

[7]       Finland,
France, Germany, Italy, Poland, Slovakia and Spain

[8]       Denmark,
Germany, Netherlands and Slovenia

[9]       Austria,
Denmark, Hungary, Poland and Spain

[10]     Measured as of 31 March 2014

[11]     According to Annex I, paragraph 1, the present reporting
process is without prejudice to the prerogatives of the Member States'
institutions exercising the supervision of the national export credit programs.

[12]     e.g. Belgium, Czech Republic, Denmark, France, Germany,
Netherlands, Slovak Republic, Slovenia and Sweden

[13]     Finland, Germany and Sweden,.

[14]     Finland and the Netherlands

[15]     the Netherlands

[16]     Belgium, Finland and Germany.

[17]     Belgium, Germany, Italy, the Netherlands, Luxemburg, Poland,
Portugal, Slovak Republic, Slovenia, Spain and the United Kingdom.

[18]     In the case of Italy, export transactions are often covered by
SACE (export credit guarantee) , but also may receive interest rate support
from SIMEST. In such cases,, SIMEST verifies that the underlying transaction
meets the requirements of the OECD Recommendation on Environmental and Social
Due Diligence, if any deeper analysis is requested, the relevant assessment by
SACE has to be passed satisfactorily.

[19]     Under the Czech export credit system, it is the normal case
that transactions by the Czech Export Bank (“CEB”) are also insured by the
Export Guarantee and Insurance Corporation (“EGAP”). The environmental and
social risk assessment of a project is normally done by EGAP. In the
exceptional cases where EGAP is not insuring a CEB transaction, the latter
assumes the responsibility for taking into all environmental and social risks
of the supported project.

[20]     1. OECD Recommendation on Common Approaches for Officially
Supported Export Credits and Environmental and Social Due Diligence (the
so-called “Common Approaches”) 2. OECD Recommendation on Bribery and
Officially Supported Export Credits. 3. The Principles and Guidelines to
Promote Sustainable Lending Practices in the provision of Official Export
Credits to Low-Income Countries

[21]     It is however obvious that the OECD’s Guidelines and Principles
on Sustainable Lending cannot be applied by export credit providers who are not
doing any lending to low income countries (as is the case for Romania).

[22]     Denmark, France, Italy and the Netherlands.

[23]     Austria,
Belgium, Bulgaria, Denmark, Finland, France, Germany. Netherlands, and Sweden.

[24]     Denmark,
Italy, Luxemburg, the Netherlands, Slovenia and Sweden.

[25]     Germany
and Sweden.

[26]     Denmark,
Netherlands and Sweden.

[27]     Bulgaria,
Croatia, Germany, Hungary Italy, Luxemburg, the Netherlands, Sweden and the
United Kingdom. The reports by Germany and Sweden
develop in particular on this topic.

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