The European Commission has launched today a targeted public consultation inviting all interested parties to comment on a proposed revision of the Short-term export credit insurance Communication (STEC). Interested parties can respond to the consultation over a period of nine weeks, until 23 September 2021.
Export credits enable foreign buyers of goods and services to defer payment. The payment deferral implies credit risk for the sellers, against which they insure themselves (export credit insurance). STEC lays down rules to ensure that State support to export credits does not distort competition among private and public or publicly supported export credit insurers, and to create a level-playing field among exporters in different Member States. It provides that trade within 27 EU Member States and nine OECD countries listed in its Annex, with a maximum risk period of up to two years, entails marketable risks, meaning that there should be sufficient capacity provided by private insurers and such risks should, in principle, not be insured by the State or State supported insurers.
As a consequence of the COVID-19 outbreak, the Commission found in March 2020 that there is a lack of sufficient private insurance capacity for short-term export credits in general and considered all commercial and political risks associated with exports to the countries listed in the Annex as temporarily non-marketable. This temporary derogation applies until 31 December 2021. Separately, the STEC is also set to expire on 31 December 2021, and has been evaluated as part of State aid Fitness Check.
The evaluation showed that the objectives of STEC are in principle achieved and that its rules are overall fit for purpose. The proposed revision therefore envisages only a small number of mainly technical amendments, in particular:
(i) STEC would continue to apply beyond 2021;
(ii) the new total annual export turnover threshold would increase from €2 million to €2.5 million;
(iii) Member States would be required to publish the annual reports on risks that are considered non-marketable and covered by State insurers;
(iv) the Commission would continue to publish decisions about the list of marketable risk countries on its website and in the Official Journal. The draft STEC and the details about the targeted public consultation and the proposed changes, are available online.
In addition to the targeted consultation launched today, the draft STEC will also be discussed in a meeting between the Commission and Member States that will take place in September. This process will ensure that both Member States and other interested parties will have sufficient opportunities to comment on the draft Commission proposal. The adoption of the new STEC is foreseen for the last quarter of 2021.