With immediate effect, the EU makes state support possible for exports at short credit terms within the EU and to selected OECD countries
30. March 2020
- The exemption will be in force until 31.12.2020
- An important contribution to supporting the exporting industry
- The Federal Government and its mandatary (Euler Hermes) stand ready to assist
With immediate effect, export transactions at short credit terms (credit periods of up to 24 months) within the EU as well as to selected OECD member states can be supported with state export credit guarantees. On 27 March 2020, the EU Commission granted an exemption to this effect.
The extended cover facilities will initially be granted for a limited period of time until 31.12.2020. They are available for all 27 EU member states as well as Australia, Iceland, Japan, Canada, New Zealand, Norway, Switzerland, the United States and the United Kingdom.
The Federal Government, which, during the past few days, worked hard for the exemption now announced, will swiftly implement it in favour of the German export industry.
The Federal Government and its mandatary Euler Hermes expect increased demand in particular under Wholeturnover Policies (APG) and Wholeturnover Policies light (APG light). With a Wholeturnover Policy or its “little sister” Wholeturnover Policy light, exporters who repeatedly supply goods and/or services to several buyers in different countries can protect themselves against bad debt losses.
Transactions offered for cover are examined individually and included in the policy provided that the foreign buyer’s creditworthiness is adequate. The obligation to offer all business for cover does not apply to the countries listed above.
State export credit cover is normally only available in market segments where private credit insurers do not offer sufficient credit insurance facilities (principle of subsidiarity: private sector rather than public sector). Coverage of exports at short credit terms within the EU and the other countries listed above is usually considered as “marketable”, i.e. it is the task of the private insurance industry. Now, the European Commission has classified such business as temporarily no longer marketable and consequently allows cover under state export credit guarantees.
Besides, our business consultants will assist you if you have any questions regarding applying for Hermes Cover. They can be contacted under our service hotline +49 40 88 34 90 00.
Since 1949, Export Credit Guarantees of the Federal Republic of Germany (Hermes Cover) have been an important instrument of state export promotion in Germany. They protect short, medium and long-term export receivables against bad debt losses. At 11.6 billion euros (2019), short-term cover accounts for more than half of the total cover volume. In the short-term business, wholeturnover and revolving policies, in turn, are the most important forms of cover.