ANNOUNCEMENT 25 Nov 2009In November 2009, the government of Sweden announced a change in its trade finance instruments.
NUMBER OF INTERVENTIONS
Letter from the EC to Sweden, 25.11.2009
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
On 25 November 2009, the European Commission announced that the Swedish short-term export-credit insurance scheme was compatible with the common market. The scheme will be used to cover export-credit insurance where Swedish exporters are unable to "cover in the private market for financially sound transactions with buyers in certain countries as a result of the financial crisis" (par. 9, letter from the EC to Sweden, 25.11.2009).
The countries mentioned include those listed in the annex of 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, namely EU member states, Australia, Canada, Iceland, Japan, New Zealand, Norway, Switzerland and the USA.
All Swedish exporters are eligible for the insurance but "the Swedish Authorities expect that the demand for the short-term export credit insurance is to be mainly on exports of raw materials, consumables, durable consumer goods, semi finished goods and similar products where the credit period granted to the buyer is at most 180 days." (par. 15)
The insurance will only be handed out through a loss on claim guarantee with a maximum risk period of 2 years, covering between 60 and 90% of the transaction (par. 21-23).
According to the Commission, the Swedish government argued the scheme was necessary after the insurance coverage of private credit insurers was withdrawn in the country for up to 20-30% (par. 6). This created problems for Swedish exporters to cover marketable risks. (par.7)
The scheme will be carried out by the governmental agency Exportkreditnämnden, which shall act as a "insurer of last resort" (par.16), and shall be in force until 31 December 2010.