12 June 2012

State Aid: Commission approves Finnish short-term export credit insurance scheme

The EC has found a Finnish short-term export credit insurance scheme to be in line with EU state aid rules, as it is limited to insurance cover that is currently not available on the private market, while the rates charged remain in line with the pricing of similar risks by private players.

Commission Vice President in charge of competition policy, Joaquín Almunia, said: "The export credit insurance scheme gives Finland an effective means to support firms, including SMEs, in areas where the market is currently not offering insurance cover while providing safeguards to limit distortions of competition".

Under the notified scheme, the Finnish state agency, Finnvera plc, would provide short-term export-credit insurance coverage to companies established in Finland, which are confronted with a temporary unavailability of cover in the private market. Cover would be available only for financially sound transactions.

Two categories of risks are currently inadequately covered by private insurers: firstly, risk cover for exporting SME with a total annual export turnover of maximum €2 million, and secondly, single risk cover in cases where the risk is associated to a single export transaction which is not covered under a portfolio insurance from private insurers or in cases where the cover is or includes pre-credit risk.

Finnvera will only intervene in areas where the private sector does not have the capacity to offer customary credit risk cover. Therefore, exporters can apply for export-credit insurance from Finnvera only if a private insurer has denied cover.

The premium rates charged under the scheme can therefore be considered to be aligned, as far as possible, with the rates charged by private export-credit insurers for the same type of risk.

The Commission therefore concluded that the measure complies with the conditions laid down in its Communication on short-term export-credit insurance and has authorised the measure until 31 December, 2012.

Press release

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