The Berne Union represents a diverse group of public and private entities that are directly involved in international trade and foreign investment by providing financing and insurance to exporters and investors. The activities of Berne Union members are diversified across products, geographies, governance modes, and regulatory systems. In 2011, Berne Union members provided over $1.8 trillion in insurance coverage, representing more than 10% of total global trade. The Berne Union was formed in 1934 when private and state export credit insurers from France, Italy, Spain, and the United Kingdom met in Berne, Switzerland. As a result, the organization was named after the location of the first meeting, thus the name the Berne Union, although the organization has never been based in Berne. The Union was headquartered in Paris until the 1970s, when it was moved to London. Associated with the Berne Union is the Prague Club, which was established in 1993 by the Berne Union and the European Bank for Reconstruction and Development (EBRD) to support new and maturing export credit agencies that are setting up and developing export credit and investment insurance programs. Also named after the location where the first meeting was held, the Prague Club established an information exchange network for new agencies in Central and Eastern Europe that have not yet meet the entrance requirements for Berne Union members. When the Prague Club members have grown to the point where they can meet certain specified criteria, they can apply for full Berne Union membership. Membership in the Berne Union is open to new applicants but there are requirements that must be met to ensure that discussions among the members remain relevant and topical for as many members as possible. Membership requirements include Institutions applying for membership in the Berne Union should be underwriters actively conducting business in the areas of export credit financing and foreign investment as their core activity. Institutions must have been in operation in the field of export credit insurance or the insurance of outward investment for a period of at least three years. Institutions should meet certain thresholds for premium income or for the value of business covered. If the applicant is engaged in export credit insurance, its operations must include insurance of both commercial and political risks and it must underwrite political risks in a global and general sense. If the applicant is engaged in the insurance of outward investment, it must be providing direct insurance against the normal political risks, including expropriation and war, and issues associated with the transfer of funds. Applicants to the Berne Union are assigned observer status for two years, after which the membership of the Berne Union decides collectively if the applicant can become a full member. In the past five years, more than 10 new members have joined the Berne Union and 3 applicants are presently listed in the observer status. In 2007, the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) became the newest member of the Berne Union. The United States is represented within the Berne Union by two federal government agencies—the U.S. Export-Import Bank and the Overseas Private Investment Company —and five private sector corporations. The private-sector members are the American International Group insurance underwriters (AIG); the Chubb Corporation of Warren, New Jersey; the Foreign Credit Insurance Association Management Company, Inc. (FCIA); the Multilateral Investment Guarantee Agency (MIGA); and the Zurich Emerging Markets Solution. The Berne Union is led by a President, a Vice President, and a Management Committee. The President is elected each year and can be re-elected for one further year. The Vice President is elected each year and cannot be re-elected. The Management Committee consists of the President, the Vice President, Committee Chairs, and 12 representatives of member organizations. The standing committees represent three areas of specialization within the credit industry: short-term credit insurance represented by the Short Term (ST) Committee, medium- and long-term credit insurance and lending represented by the Medium Long Term (MLT) Committee, and investment insurance represented by the Investment (INV) Committee. Six of the members for the Management Committee represent the two largest organizations in each of the three committees. The remaining six members are elected on a rotating basis for a two-year term. To support the Berne Union leadership, the Berne Union has a staff of five people, known as the Secretariat, located in London. These five staff members are responsible for coordinating all Berne Union and Prague Club activities and for providing ways for the members to participate. In particular, the Secretariat is responsible for maintaining external relations and for promoting the Berne Union and its members within the export credit and insurance industry as a whole by supporting opportunities for members to meet and discuss professional matters and to exchange views and experiences. This interchange of information is achieved through three methods, annual general meetings and Committee meetings, annual seminars and workshops, and an intranet among the Berne Union members. Annual general meetings are hosted by a Berne Union member on a rotating basis and take place over four or five days. Discussions at these meetings reflect broad aspects of international trade, international finance, and developments in specific industry sectors. In particular, member discussions focus on developing and promoting the best available practices in the fields of international trade finance and foreign investment insurance. Recently, the members focused their attention on such issues as the impact of the global credit crunch and the effect it is having on global trade; the dynamic expansion of the Indian economy and the growing demand for credit insurance; and trends in social and corporate responsibility, green initiatives in project finance, and the expanding capacity for local currency finance. The Berne Union has developed long-standing relationships with the leading international and regional financial institutions in the credit and investment insurance industry. For instance, the Union has developed strong ties with such groups as the Organization for Economic Cooperation and Development (OECD), the International Monetary Fund (IMF), and the World Bank group, and has worked closely with these organizations to promote international financial stability and broad-based economic growth. The Berne Union is also in regular contact with such regional development banks as the European Bank of Reconstruction and Development (EBRD) and the Asian Development Bank, as agencies from both regions are active members of the Prague Club. The Berne Union has close relationships with the other major credit insurance associations including the International Credit Insurance and Surety Association (ICISA) and the Pan-American Surety Association (PASA). According to Berne Union President Johan Schrijver, the financial crisis has presented suppliers of exports and export insurance with severe challenges as liquidity has been tight and the volume of global trade fell sharply. In addition, risk concerns have shifted from focusing primarily on developing countries to developed economies and the sovereign debt crisis in Europe and the political instability in the Middle East. Berne Union members expect the rate of economic growth to slow down in 2012, which could place pressure on official export credit agencies to provide additional support. According to Johan Schrijver, Berne Union members "continue to express serious concerns about the ability of banks to fund trade and investment given the proposed regulatory changes and the on-going funding challenges that banks are facing. Any further deterioration in bank capacity for trade and export finance could have serious consequences for global trade and economic recovery." Berne Union members have participated in conferences and other forums where they have encouraged the continued availability of export credits and trade and investment insurance to support the positive effects of global trade and investment. At the same time, Berne Union members continue to support practices that emphasize ethical practices in international trade. Berne Union members have adopted operational guidelines in the three major business areas to support best practices among all of the members. Denmark's Eksport Kredit Fonden (EKF) adopted a set of principles known as the Equator Principles that comprise a voluntary set of guidelines associated with project finance that are based on the environmental and social procedures developed by the World Bank's International Finance Corporation and that have been adopted by various international banks. Berne Union members have also met with business leader throughout Asia to overcome concerns about doing business in Asia, particularly in China. Some members argue that there is a lack of available information concerning the nature and performance capability of many of the firms in China that are involved in trade or investment transactions with Berne Union members. The rapid growth of joint ventures with Chinese firms has created confusion at times for some of the public-sector Berne Union members, because many of them are charged by their respective governments with participating in transactions that support economic activity in their home countries. As a result of this confusion, membership in the Berne Union is growing fastest among firms from the private sector where those firms are not charged with promoting national content. Another key issue for Berne Union members is insurance against terrorist risks and how such risks should be defined and whether they should be included as a part of investment insurance. In November 2006, the Berne Union members adopted a set of 10 Guiding Principles, which represents a set of best practices commitments for Berne Union members to operate "in a professional manner that is financially responsible, respectful of the environment and which demonstrates high ethical values." In brief terms, the 10 Principles are commitments to: 1. Conduct business in a manner that contributes to the stability and expansion of global trade and investment in accordance with applicable laws and relevant international agreements. 2. Carefully review and manage the risks that are undertaken. 3. Promote export credit and investment insurance terms that reflect sound business practices. 4. Generate adequate revenues to sustain long-term operations that are reflective of the risks that are undertaken. 5. Manage claims and recoveries in a professional manner, while recognizing the rights of insurers and obligors. 6. Be sensitive about environmental issues and take such issues into account in the conduct of business. 7. Support international efforts to combat corruption and money laundering. 8.