Global Trade Alert

 On 29 October 2009, the European Commission approved the modified Danish short-term export-credit insurance scheme, initially approved on 6 May 2009 (cf. Related Measures).
The scheme was updated in three parts:

1. Previously, the cover level of the private market insurer (which had to drop at least by 20% from pre-crisis levels to be eligible for the scheme) was calculated using the ratio between the amount of coverage approved by the insurers and the total amount applied for. With the modified scheme, however, the denominator of this ratio would additionally include the cancelled and reduced amounts the exporter applied for. This would substantially increase the scope of the scheme.
2. The changes would reduce the minimum share of insurer's risk as well as lower the exporter retention rate from 20% to '10-20%'.
3. The modification also included the introduction of a top-up window "to the reinsurance agreements with the private export credit insurance companies. The top-up window is a tool for providing additional capacity to the private market on a risk sharing basis. It aims at fully utilizing the capacity available in the market." (par.15-16, letter from the EC to Denmark, 29.10.2009).

The scheme was planned to be in force until 31 December 2010 but was extended by state aid regulation SA.32047 for another year.
The list of potentially affected trading partners and tariff lines is based on Denmark's bilateral trade flows in 2008 with the countries the EU classifies as marketable risk countries (i.e. either OECD or EU member states).