Act No. 58 / 1995 Coll.
Act on Insurance and Financing of Exports with State Aid
Valid
Effective from 24.04.1995
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58
THE LAW
of 14 March 1995
on insurance and financing of exports with State aid
Parliament has decided on this law of the Czech Republic:
INSURANCE AND FINANCING OF STATE AID EXPORT
(1) This Act implements the relevant European Union1), following the directly applicable European Union2) and, in accordance with the obligations arising from the Czech Republic's membership of the European Union, the World Trade Organisation, the Organisation for Economic Co-operation and Development and other international organisations (3), regulates State aid for exports granted in the form of export credit risk insurance, supported financing and the levying of interest differences. This Act further provides for guarantees for repayment of credit to exporters, producers and export oriented enterprises.
(2) Export credit risk insurance for the purposes of this Act means activities carried out by the Export Guarantee and Insurance Company, a. s. ("Export Insurance Company '), which are related to export and are carried out on the basis of an authorisation granted by the Czech National Bank pursuant to § 3a, namely:
(a) short-term export credit insurance against non-payment as a result of territorial or combined territorial and market-free commercial risks;
(b) insurance of long-term export credits and of non-payment investments as a result of territorial or combined territorial and market-unreinsurance commercial risks, or non-payment as a result of market unreinsurance commercial risks;
(c) insurance of investments abroad against territorial risks, in particular against the risk of preventing the transfer of investment income, expropriation or politically motivated violent damage;
(d) insurance against losses of exporters and investors associated with the preparation and implementation of commercial activities;
(e) credit insurance provided by manufacturers or exporters to finance production intended for export against the risk of default of credit due to the failure of the manufacturer or exporter to comply with the terms of the export contract;
(f) insurance of direct and indirect guarantees and guarantees related to exports and investments or financial services provided by the exporter's bank, importer's bank and investor's bank against the risk of default of the exporter, investor, importer or debtor;
(g) insurance of the risk of foreign exchange losses of the Czech koruna against foreign currencies arising in the case of insurance claims as a result of the difference between the rate applicable in the negotiation of the insurance contract and the rate applicable in the payment of the insurance claims;
(h) reinsurance activity consisting of taking risks from insurance under points (a), (b) and (f) agreed by foreign credit insurance undertakings;
(i) reinsurance business vis-à-vis credit insurers in relation to export insurance against market-unreinsurance territorial and market-unreinsurance commercial risks;
(j) insurance and reinsurance of small and medium-sized enterprises' loans;
(k) refinancing and direct lending insurance provided by the Export Bank;
(l) insurance of loans granted to an export-oriented enterprise to increase international competitiveness;
(m) insurance of direct and indirect guarantees and guarantees related to export-oriented business activities or financial services provided by an export-oriented bank, a foreign bank against the risk of default of an export-oriented undertaking or a foreign person.
(3) Supported funding for the purposes of this Act means short-term and long-term financing to support exports and export-oriented enterprises and the short-term and long-term provision of financial services related to export support and export-oriented enterprises under the terms of this Act in the form of:
(a) refinancing credit
1. the exporter's bank and the importer's bank for export financing;
2. the exporter's bank and the producer's bank to finance the export production;
3. an export-oriented bank to increase the international competitiveness of an export-oriented company;
4. the investor's financing bank;
5. to the exporter's bank for project financing,
(b) direct credit
1. exporters, foreign companies or foreign persons for export financing;
2. exporters and producers to finance export production,
3. an export-oriented undertaking to increase international competitiveness,
4. to the investor for financing the investment;
5. exporters for project financing,
6. non-banks for the purchase of export-related receivables by the exporter,
(c) financial services related to export support and export-oriented enterprises, which include in particular:
1. bank guarantees,
2. the opening of letters of credit, the provision of payment services, the issuance of electronic money and activities related to the provision of payment services or the issuance of electronic money;
3. reinsurance operations,
4. the financing of local costs in the importer's country of residence or permanent residence.
(4) For the purposes of this Act, matching interest differences means matching the difference between interest agreed at fixed interest rates on export credits granted by the exporter's bank in accordance with European Community law and international rules governing officially supported export credits (hereinafter referred to as "international rules') with a maturity of at least two years and interest determined on the basis of the six-month IBOR interest rate for the currency in which the export credit is granted, published by Reuters two working days before the start of the period for which the comparison is made, plus the exporter's bank's systemic margin. The amount of the system margin of the exporter bank shall be determined by the Ministry of Finance by decree.
(5) For the purposes of this Act, guarantees for repayment of loans from exporters, producers and export oriented undertakings are guarantees for repayment of principal of loans for operation, working capital, innovation and improvement of production and for the purpose of maintaining business provided to exporters, producers and export oriented undertakings. These guarantees are provided by the Export Insurance Corporation as an exceptional measure in order to mitigate the economic and social consequences of the disease pandemic COVID-19 or under other exceptional State aid measures in order to increase the availability of the liquidity of exporters, producers and export oriented enterprises without the need to obtain authorisation under a specific legislation. The purpose and scope of the guarantees, the conditions for granting them, the amount of cover for outstanding credit principal and the procedure for the payment of all funds from the State budget to the Export Insurance Corporation for the provision of guarantees shall be laid down by the Government by regulation.
(6) The funds provided by the Export Insurance Corporation or the Export Bank are from the State Budget, in particular grants to cover losses, grants to strengthen funds, funds to supplement the primary capital of the Export Insurance Corporation, funds to increase the capital of the Export Bank, funds to refinance loans received or to repay debt securities issued, money for guarantees and claims received from the Export Insurance Corporation, the Export Insurance Corporation and the Export Bank receive to their bank accounts subordinate to the Treasury and held with the Czech National Bank pursuant to the Budget Rules Act 5). In its bank accounts subordinate to the Treasury, the Export Insurance Corporation or the Export Bank shall also keep other funds transferred or received by the Export Insurance Corporation.
(7) An Export Insurance Corporation or an Export Bank cannot invest the funds referred to in paragraph 6 in financial instruments on the financial market.
(8) The Ministry of Finance may allow the export insurance company or the export bank to keep a bank account outside the accounts of the subordinate Treasury with the Czech National Bank on their reasoned written request. In the application, the Export Insurance Corporation or the Export Bank shall state the reasons for the special consideration due to account management outside the accounts of the subordinate Treasury, the designation of the Bank and the amount that is or will be deposited in the account. The Ministry of Finance will examine the application in accordance with the Budget Rules Act (5).
(9) The permission of the Ministry of Finance is not subject to the use of a bank account held outside the accounts of a subordinate Treasury with the Czech National Bank if such an account is solely used to carry out the transfer of funds from the Treasury for the purposes of the supported financing, in immediate interbank payment operations.
Definition of terms
For the purposes of this Act:
(a) the investor's bank, branch of the bank or financial institution in accordance with the directly applicable European Union15), irrespective of its registered office or place of registration subject to the authorisation regime of the home State and the supervision of the home supervisory authority which grants the investor or foreign person a credit for the investment;
(b) the bank of the manufacturer's bank, branch of the bank or financial institution in accordance with the directly applicable European Union15 Regulation, irrespective of its registered office or place of registration subject to the authorisation regime of the home State and the supervision of the home supervisory authority which provides the manufacturer with a credit related to the manufacture of goods or services intended for subsequent export;
(c) the exporter's bank, branch of the bank or financial institution pursuant to the directly applicable European Union15 law, irrespective of its registered office or place of registration subject to the authorisation regime of the home State and the supervision of the home supervisory authority providing export-related credit to the exporter or to a foreign person;
(d) by the supplier's credit, the granting of a time delay between the fulfilment of the exporter's undertaking and the importer's obligation to pay the exporter for its performance by the exporter under the export contract;
(e) by an importer, a foreign person who carries out imports from the Czech Republic or collects services or supplies of goods under an export contract;
(f) financing of production for export financing of the development or production of goods and services before their export takes place;
(g) financial services related to export support and export-oriented enterprises of activities carried out by the Czech Export Bank, a. s. (the "Export Bank") on the basis of a bank licence under a special law, 1b) related to export support and export-oriented enterprises;
(h) financial markets of domestic and foreign money and capital markets;
(i) financial resources obtained mainly by issuing bonds, selling bonds or under credit agreements;
(j) the value of the export price agreed in the export contract;
(k) by investing funds or other money-worthy value or property rights spent for at least three years by a legal person established in the territory of the Czech Republic who is an entrepreneur under the Civil Code or by a foreign company, for the purpose of establishing, acquiring or increasing a holding in a legal person established outside the Czech Republic or for the purpose of expanding the business of that legal person;
(l) by the investor, the person making the investment, either a legal person established in the territory of the Czech Republic who is an entrepreneur under the Civil Code or a foreign company,
(m) capital markets of domestic and foreign markets with a maturity of more than one year;
(n) the commercial risk of default of an export credit claim by a foreign private debtor due to its insolvency or default;
(o) local costs of expenditure on services and goods to be incurred in the country of final destination of the export in accordance with an export contract or an agreement between an importer and a foreign person, either for the purpose of carrying out the export or for the completion of a project or work in which the exporter participates in the context of an export contract and which are not financed under more favourable conditions than those under which the export credit will be financed;
(p) the buyer credit granted for the financing of an export contract under a credit agreement concluded between a bank, a branch of a bank or a financial institution 1b) irrespective of its registered office or place of registration subject to the authorisation regime of the home State and the supervision of the home supervisory authority, as a creditor and debtor whose drawdown is provided to the exporter or debtor;
(r) other operations of the operation related to the acquisition of financial resources to safeguard the liquidity of the exporting bank, including reinsurance operations;
(s) by the insurance engagement, the sum of the values of the insured export credit risks of the insurance contracts concluded, including interest and contractual charges, and of the reinsurance business, minus the value of the risks that have already died and the value of the insurance promise contracts of 50% of their nominal value;
(t) by project financing, the granting of a loan which is repaid by income and revenue from the activities of a foreign person set up to implement the project;
(u) by direct credit, credit granted by the exporting bank to the manufacturer, exporter, export oriented undertaking, investor or foreign person;
(v) the refinancing loan granted by the Export Bank to the manufacturer's bank, the exporter's bank, the importer's bank, the investor's bank, the export oriented bank or the foreign bank;
(w) an export contract concluded between the exporter and the importer on the export of goods or services or on the export of goods and services;
(x) the territorial risk of default of an export credit claim due to exceptional and random events in the country to which it is supplied or in the country from which the claim is to be paid or in a third country such as the payment default of a public debtor, the decision of a third country, the prohibition of payment (moratorium), the impossibility or delay of the transfer of funds, the decision of the authorities in the debtor country, the decision of the authorities in the country of the insurer or insured and the circumstances constituting a higher power;
(y) commercially unreinsurance commercial risks which cannot be secured on the private commercial credit protection market under conditions normal on international markets;
(z) by a public debtor, a person entrusted with the exercise of State authority or public administration who cannot be legally declared unable to fulfil his obligations, other persons shall be regarded as private legal debtors,
(aa) by a manufacturer who produces goods or provides services intended for subsequent export, either a natural person resident in the Czech Republic or a legal person established in the Czech Republic, who is an entrepreneur under the Civil Code or a foreign company,
(bb) by the exporter, either a natural person with permanent residence in the Czech Republic or a legal person with registered office in the Czech Republic and who is an entrepreneur under the Civil Code or a foreign company,
(cc) export of the supply of goods or services or the supply of goods and services to importers under the Export Contract;
(dd) by export credit supplier credit and customer credit;
(ee) a foreign person is a natural person who is not resident in the Czech Republic or a legal person who is not established in the Czech Republic,
(ff) a foreign credit insurance company which provides credit insurance with the support of a Member State of the Organisation for Economic Cooperation and Development;
(gg) reinsurance operations of the operation aimed at limiting, in particular, monetary, interest rate and other risks;
(hh) a bank guarantee guarantee issued by a bank or a savings and credit cooperative;
(ii) a foreign company is controlled by a legal person established in the Czech Republic who is an entrepreneur under the Civil Code by participating directly or indirectly in the capital of the company in more than 50% or by controlling the absolute majority of the voting rights associated with participation in the capital of the company or by appointing a majority of the members of the board, supervisory board or board of directors or other similar management body;
(jj) loan for the investment a loan for the acquisition of an investment or a loan for the activities of a foreign company provided by an investor bank;
(kk) the bank of the importer of the foreign bank or other foreign person which provides the importer with a credit related to the export contract;
(ll) a non-banking company of a financial institution as referred to in point (26) of Article 4 (1) of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648 / 2012 to buy back future export-related claims of an exporter,
(mm) a bank of an export-oriented undertaking, a bank, a branch of a bank or a financial institution under the directly applicable European Union15 law), irrespective of its registered office or place of registration subject to the authorisation regime of the home State and the supervision of the home supervisory authority which grants the export-oriented undertaking a credit to increase international competitiveness;
(nn) Export oriented undertaking
1. a person established in the territory of the Czech Republic who is an entrepreneur under the Civil Code or a foreign company with an export share of at least 25% of the total annual sales of products, services and goods during the last financial year; or
2. a person established in the territory of the Czech Republic who is an entrepreneur under the Civil Code or a foreign company if he is with the person referred to in point 1 of this point in an economically linked group of clients pursuant to Article 4 (1) (39) of Regulation (EU) No 575 / 2013 of the European Parliament and of the Council and supplies him or her with goods or services for export,
(oo) by insurance of export credit risks with a national interest in insurance of export credit risks referred to in § 1 (2), the provision of which is of strategic importance for the Czech Republic and for the export insurance company would mean, when providing export credit risk insurance under § 4, exceeding the limits on the concentration of risks and other limits on the extent of risk which it is required to determine and comply with within the conditions set for the operation of insurance and reinsurance activities and which are subject to supervision by the Czech National Bank.
The provisions of this Act concerning banks shall apply mutatis mutandis to savings and credit cooperatives.
Conditions for insurance of export credit risks and provision of supported financing
(1) The insurance of export credit risks and the supported financing shall assess the risk of return on the export credit with regard to the solvency of a foreign person as a debtor and the country from which the claim is to be paid or to which the investment is to be directed; the credit and bank guarantees provided are assessed in terms of return risks, in particular the debtor's solvency and the exporter's ability to meet the conditions of the export contract.
(2) The granting of the supported financing is subject to the provision of collateral under Section 8 (5), unless the insurance of export credit risks insurable by the Export Insurance Corporation pursuant to Section 1 (2) is agreed.
Granting authorisation to operate
(1) The provisions of the Insurance and Reinsurance Act relating to the granting of an authorisation for insurance and reinsurance activities of a domestic insurance or reinsurance undertaking shall apply mutatis mutandis to the granting of an export credit risk granted by the Czech National Bank on request, unless otherwise provided for in this Act.
(2) The Czech National Bank shall decide on the application for authorisation referred to in paragraph 1 within 6 months of its receipt.
(3) The authorisation referred to in paragraph 1 may not be granted for the pursuit of an insurance and reinsurance business to an extent other than insurance and reinsurance of export credit risks under this Act.
Insurance of export credit risks and the provision of guarantees
(1) Export credit risk insurance is entrusted to the export insurance company. The condition for operating export credit risk insurance is that the sole shareholder of the Export Insurance Corporation is the State. The Export Insurance Company is not an insurance undertaking under the Law governing the insurance sector and its activities are subject to the terms of the Law governing the insurance sector concerning the operation of non-life insurance and reinsurance and supervision by the Czech National Bank of this activity only to the extent that they are not regulated by this Act. For supervisory purposes under the Act governing the activities of the Czech National Bank, the Export Insurance Corporation is considered to be an insurance company when operating export credit risk insurance. The law governing the distribution of insurance and reinsurance shall not apply to the distribution of insurance and reinsurance. The distribution of insurance and reinsurance by the Export Insurance Corporation shall be authorised by the Export Insurance Corporation and distributors fulfilling the conditions laid down by law governing the distribution of insurance and reinsurance for the distribution of non-life insurance to the extent of insurance risks and reinsurance referred to in Article 1 (2). The statutes of the Export Insurance Corporation shall include, in addition to the formalities laid down in the Commercial Corporations Act, a prohibition on employees' consent to a business or other form of gainful activity identical to that of the Export Insurance Corporation.
(2) An Export Insurance Corporation may not set up legal persons or acquire shares in legal persons, except:
(a) export banks;
(b) legal persons for the purpose of recovering claims or preventing damage from insurance of export credit risks or mitigating their consequences;
(c) legal persons whose business is insurance and reinsurance business in the non-life insurance sector, namely insurance of credit, guarantees and financial losses under the law governing insurance, with the exception of insurance of export credit risks under this law.
(3) The establishment of a legal entity pursuant to paragraph 2 (b) and (c) or the acquisition of a holding in it requires the prior approval of the Ministry of Finance. The Export Insurance Corporation shall indicate in the request for consent the facts justifying the establishment of the legal person or the acquisition of a holding in that legal person. The Ministry of Finance may, upon receipt of the opinion of the Ministry of Industry and Trade, grant the request. This legal person shall not be subject to State export aid under this Act.
(4) Funds for the insurance of export credit risks are made up of allocations from the distribution of profits by the Export Insurance Corporation and subsidies from the State budget for the creation of such funds. Subsidies from the state budget are provided depending on the development of insurance exposures and become a permanent part of these funds. The funds to cover the guarantees provided under Article 1 (5) shall consist of the appropriations allocated by the Government under the State Budget Decision. The Financial Controller Act (10) shall not apply to the provision of funds from the State Budget on the basis of a government decision under the previous sentence. Reserves shall be made up in accordance with the special provisions governing the provision of reserves for insurance undertakings and for the purpose of determining the income tax base, 5a). With these funds and reserves, the Export Insurance Corporation operates separately from other reserves and funds.
(5) In the case of export credit risk insurance, the Export Insurance Corporation shall submit to the Ministry of Finance for approval the basic economic parameters of each newly introduced type of export credit risk insurance, in particular their business plan; ensuring the economical use of subsidies from the state budget and the State guarantee.
(6) Export insurance undertakings may not accept export credit risks for insurance or provide guarantees to exceed their insurance capacity. For the purposes of this Act, insurance capacity is the sum of the top limit of the insurance obligations of the insurance contracts concluded and the insurance promise contracts which, for the period up to the end of the calendar year, the export insurance company may contractually bind and the volume of the credit guarantees covered by the guarantees provided under Sections 1 (5) and 5a. The State budget for the year shall specify the amount of insurance capacity of the Export Insurance Corporation as well as the amount of the subsidy from the State Budget resources to supplement the insurance funds. The part of the insurance capacity determined according to the previous sentence relating to the provision of guarantees shall be determined by the Government by means of a regulation. The method of calculating the insurance capacity shall be laid down by the Ministry of Finance by law for export credit risk insurance, based on the sum of the export credit risk values contained in the valid and elaborated insurance policies and insurance promise contracts, the expected addition of insurance funds from profit distribution, changes in technical provisions of the Export Insurance Corporation and the distribution of valid and developed insurance policies and insurance promise contracts according to the degree of risk.
(7) The Export Insurance Corporation may insure individual export credit risks up to 20% of the insurance capacity established for the year in which the insurance is agreed on. With the approval of the Minister for Finance and the Minister for Industry and Trade, the Export Insurance Corporation is entitled to insure individual export credit risks up to 40% of the insurance capacity. Individual export credit risks exceeding 40% of the insurance capacity may be insured by the Export Insurance Corporation with the Government's approval. Individual export credit risks with a State interest may be insured by the Export Insurance Corporation only with the Government's consent that the aggregate amount of insured export credit risks with a State interest shall not exceed 10% of the insurance capacity determined for the year referred to in paragraph 6.
(8) The provision of insurance of export credit risks with a State interest pursuant to § 2 (oo), including the liquidation of insurance claims, provides for the State and on its behalf an export insurance company. The State, through the Ministry of Finance, pays the costs and losses of the Export Insurance Corporation associated with the provision of this insurance and the Export Insurance Corporation pays to the Ministry of Finance the premiums paid in accordance with the international rules on State export support provided by the form of export credit risk insurance after deduction of the percentage of the insurance premiums to cover the costs of the Export Insurance Corporation's insurance management. The application for insurance of export credit risks with a State interest shall be submitted by the applicant for insurance through an export insurance undertaking. The Ministry of Finance shall, by way of a decree, determine the nature of the application for insurance of export credit risks with a State interest, the procedure for the conclusion and administration of such insurance, the percentage of the insurance premiums payable by the Export Insurance Corporation for the management of insurance and the particulars of the application by the Export Insurance Corporation for the reimbursement of losses associated with the provision of export credit risk insurance with the State interest, as well as the deadline for the reimbursement of such losses by the Ministry of Finance.
(9) By decree, the Ministry of Finance sets out the method for the creation of funds for the insurance of export credit risks referred to in paragraph 4. The Government Regulation lays down the arrangements for the creation of a fund to cover the guarantee commitments referred to in paragraph 4 and the ratio between that fund and the total guarantee commitments.
(10) The Export Insurance Corporation provides to the Chamber of Deputies once a year information on the insurance of export credit risks. This information shall include in particular:
(a) details of the Export Insurance Corporation, in particular its capital, changes in the composition of the Board of Directors and the Supervisory Board, as well as the balance sheet of the Export Insurance Corporation;
(b) data on the operation of export credit risk insurance, in particular analysis of such insurance, including territorial and sectoral structure, use of State budget funds, the relationship between the demand for such insurance and the insurance capacity of the Export Insurance Corporation, as well as data on the expected development of such insurance.
(11) Upon receipt of an application from an Export Insurance Corporation for a subsidy from the State Budget, the Ministry of Finance is entitled to carry out a check on the accuracy of the determination of the amount of the subsidy with the Export Insurance Corporation. In order to carry out the check, the Export Insurance Corporation shall, at the request of the Ministry of Finance, submit data and documents relating to the subject matter of the check, including information on the insurance contract, and, where appropriate, allow the Ministry of Finance access to such documents kept only in electronic form, as well as to provide the Ministry of Finance with the necessary synergies when carrying out the check.
(12) The Export Insurance Corporation will finance the grant granted from the State Budget under the Budget Rules Act and within the deadline set by the Ministry of Finance Order.
Conditions of activity of the Export Insurance Corporation
(1) The Export Insurance Corporation can only operate insurance and reinsurance activities to the extent of the authorisation granted by the Czech National Bank pursuant to § 3a.
(2) The provisions of the law governing insurance shall not apply to the activities of the Export Insurance Corporation.
(a) assessment of persons participating in and changes to the Export Insurance Corporation;
(b) the assessment of the origin and sources of the assets or other financial resources of the Export Insurance Corporation;
(c) insurance against non-life insurance in excess of the authorisation granted;
(d) the establishment of a branch in the territory of another Member State or in the territory of another Member State and the freedom to provide temporary services.
(3) The inadequacy of the capital used to meet the Solvency Capital Requirement is replaced by a State guarantee for the liabilities of the Export Insurance Corporation. The amount of basic own funds under the law governing the insurance business of the Export Insurance Corporation must allow the continued performance of its liabilities, which must not fall below 30% of the value of the Solvency Capital Requirement; the minimum capital requirement under the law governing insurance shall not exceed 30% of the Solvency Capital Requirement of the Export Insurance Corporation.
(4) The value of the technical provisions of the Export Insurance Corporation is equal to the sum of the value of the best estimate established under the Insurance Act and the value of the risk premium. The value of the risk premium shall be calculated separately from the value of the best estimate as the cost of procuring the eligible own funds required to meet the Minimum Capital Requirement referred to in paragraph 3. For the calculation of the risk premium, the European Union implementing legislation governing access to and pursuit of the insurance and reinsurance business shall apply mutatis mutandis, with the minimum capital requirement being considered to be equal to the minimum capital requirement of the reference insurance or reinsurance undertaking for the duration of the insurance and reinsurance obligations operated by the Export Insurance Corporation as provided for in this European Union legislation.
Supervision
(1) The supervision of the Czech National Bank over the activities of the Export Insurance Corporation is subject to compliance with the conditions of authorisation granted under § 3a and those laid down for the operation of insurance and reinsurance activities in the Insurance Act and other legislation within the scope of paragraphs 3, 4 (1) and 4a.
(2) In the exercise of supervision over the activities of the Export Insurance Corporation, the Czech National Bank shall comply with the relevant provisions of the Insurance Act concerning the supervision of the activities of the domestic insurance and reinsurance undertaking, unless otherwise provided for in this Act.
(3) The provisions of the law governing the insurance sector relating to the introduction of forced administration, the transfer of the insurance tribe or part thereof, the transfer of the tribe of reinsurance contracts or parts thereof, the withdrawal of authorisations of the domestic insurance undertaking and the domestic reinsurance undertaking, the conversion of the domestic insurance undertaking or the domestic reinsurance undertaking and the provision for co-insurance within the Member States shall not apply to the activity of the export insurance undertaking.
Exclusion of the scope of the Financial Conglomerates Act
The activity of the Export Insurance Corporation is not covered by the Act governing the supplementary supervision of banks, savings and credit cooperatives, insurance companies and securities dealers in financial conglomerates.
Forms of application for export credit risk insurance
(1) The application for export credit risk insurance is submitted by the exporter, the manufacturer, the investor, the export oriented undertaking or the manufacturer's bank, the exporting bank, the exporter's bank, the importer's bank, the investor's bank or the export oriented undertaking's bank to the export insurance company.
(2) In the application for insurance of export credit risks, the person referred to in paragraph 1 shall indicate:
(a) their identification details, in the case of a legal person, of a trading firm or name, the identification number of the person, where assigned, the legal form and the registered office; in the case of a natural person, his or her name and surname, the identification number of the person, if assigned, the subject of the activity, the address of his or her registered office or place of residence in the Czech Republic or, where applicable, his or her residence, if the natural person does not have a place of permanent residence in the Czech Republic (hereinafter referred to as "identification details'),
(b) for a legal person, the structure of its members, including the indication of the beneficial owner under the law governing the registration of beneficial owners;
(c) the characteristics of the subject of insurance and the required value of insurance and the volume of export or investment, the sum of repayments of principal and interest of the credit concerned or the value of the guarantee;
(d) the estimated share of export value to be created in the Czech Republic,
(e) identification of the foreign person to whom the export credit is granted;
(f) other information specified in the insurance terms of the Export Insurance Corporation.
(3) On the basis of the application submitted for insurance of export credit risks, the Export Insurance Corporation may conclude an insurance contract following the examination of the information contained in the application and the risk assessment of return referred to in Article 3 (1) and, if the Export Contract has not yet been negotiated, an insurance promise contract.
(4) In accordance with Section 4 (8) of the Ministry of Finance, the requirements of the application for insurance of export credit risks are laid down in a decree.
(5) There is no legal claim for export credit risk insurance.
Provision of guarantees
(1) The provision of guarantees by an Export Insurance Corporation pursuant to Article 1 (5) shall not be considered as insurance of export credit risks under Article 1 (2) and shall not be subject to the Insurance Act.
(2) The Export Insurance Corporation shall produce on a quarterly basis an estimate of the expected loss from the provision of guarantees, together with an estimate of the value of the ratio between the Fund to cover the guarantee obligations and the total guarantee commitments accepted for the period of the following six months presented by the Ministry of Industry and Trade and the Ministry of Finance.
(3) There is no legal entitlement to the guarantee.
Supported funding
(1) An export bank is entrusted with the operation of the supported financing. Only a State or a legal person with 100% direct or indirect participation of the State may be a shareholder of an export bank. Unless otherwise provided for in this Act, the provisions of the special laws governing banking are applicable to the Export Bank (9). The Statutes of the Export Bank shall contain, in addition to the formalities laid down in the Commercial Code:
(a) provisions on the preferred use of profit for the addition of funds to secure the export bank's activities;
(b) a ban on the consent of employees to a business or other form of gainful activity identical to that of an export bank.
(2) The Export Bank operates the supported financing pursuant to Paragraph 1 (3) and carries out related activities in accordance with a bank licence issued under a special law. 1b) Sources for supported financing are obtained by the Export Bank from the funds provided by the State Budget, from loans received or loans granted by the Ministry of Finance under the Finance Act 5) or from financial markets. The costs associated with the operation of the supported financing shall be borne by the Export Bank mainly on the part of the interest income of 100 basis points on the interest rate used to provide the supported financing up to the maximum amount needed to cover the reported operating losses.
(3) The Export Bank may not set up legal entities or acquire shares in legal entities, except:
(a) legal persons engaged in the provision and transfer of interchange payments and the transmission of interchange information;
(b) legal persons with a view to ensuring the enforceability of claims on supported financing or carrying out activities to prevent or mitigate damage;
(c) fixed-term legal persons to ensure the provision of supported financing and the acquisition of financial resources where the export bank is or is to be a majority shareholder at the time of acquisition of the holding.
(4) The establishment of or acquisition of a legal person pursuant to paragraph 3 shall require the prior consent of the Ministry of Finance. The export bank shall indicate in the request for consent the facts justifying the establishment of the legal person or the acquisition of a holding in that legal person. The Ministry of Finance may, upon receipt of the opinion of the Ministry of Industry and Trade, grant the request. This legal person shall not be subject to State export aid under this Act.
(5) In order to cover the losses of the export bank resulting from the operation of the supported financing, State budget subsidies are granted. Such losses shall consist of differences between the interest income accounted for in the provision of long-term supported financing minus interest income as referred to in paragraph 2, interest income on the temporary use of financial resources for the supported financing and the interest cost of the acquisition of financial resources, the remuneration agreed between the creditor and the export bank, associated with the acquisition of such financial resources, the recognised remuneration and commissions received by the Export Bank on the guarantees issued and the cost of guarantees, the cost of reserve formation and the adjustment appropriations, the proceeds of their use or dissolution, the cost of debt write-down of claims, the proceeds of the premiums received and other security, the profits and losses from the modification of financial assets relating to the supported financing, the differences in monetary rates and other costs which the export bank were evidenced by the acquisition of financial resources for the supported financing.
(6) The request for a loss payment subsidy is submitted by the Export Bank to the Ministry of Finance. When submitting a request for a subsidy from the State Budget when drawing up a draft State Budget, when submitting a request for a loss subsidy and when paying a grant, the Act on the Budget Rules 5 is followed accordingly, taking into account the nature and activity of the Export Bank.
(7) The time limits for the application of the subsidy requirement, the submission of the grant application, the method for determining its amount on the basis of the results of the management, the procedure for checking the accuracy of the subsidy amount required pursuant to paragraph 8, the method for granting the grant awarded and the evidence demonstrating the justification of the subsidy requirement and the application for the subsidy and its amount are laid down by the Ministry of Finance by decree.
(8) The Ministry of Finance shall check the accuracy of the determination of the amount of the subsidy requested by the Export Bank to cover its losses resulting from the operation of the supported financing. In order to carry out such a check, the Export Bank shall, at the request of the Ministry of Finance, submit data and documents relating to specific business cases, including data relating to the creation of adjustments, and financial market operations, and, where appropriate, allow the Ministry of Finance access to such documents stored only in electronic form, as well as to provide the Ministry of Finance with the necessary synergies in carrying out the check.
(9) If the Export Bank exceptionally exceeds the limits of credit exposures laid down under the special laws governing banking activities (9) and notifies the Czech National Bank without delay, the Czech National Bank may, where justified, grant the Export Bank a deadline to comply with these limits.
(10) In support of the financing, the Export Bank shall proceed according to general commercial conditions. If they adjust the provision of refinancing loans, the general terms and conditions must also include the maximum amount of the interest premium on banks to which refinancing loans are granted at the interest expense at which they received refinancing and export bank loans.
(11) The Export Bank provides the Chamber of Deputies once a year with information on the financing supported. This information shall include in particular:
(a) details of the export bank, in particular the amount of its capital, changes in the composition of the shareholder structure, changes in the composition of the board of directors and supervisory board, as well as the balance sheet of the export bank;
(b) data on the operation of the supported financing, in particular the analysis of the financing, including the territorial and sectoral structure, the use of State budget funds, the relationship between the demand for the supported financing and the export bank's possibilities to meet this demand, as well as the expected development of the supported financing.
(12) The application of the exemptions provided for in paragraph 3 shall be without prejudice to the provisions of the special law on the limitation of banks in the acquisition and holding of shares in legal entities. (1b)
Forms of application for supported funding
(1) An application for supported financing is submitted by the exporter's bank, the producer's bank, the investor's bank, the export oriented bank, the importer's bank, the foreign person, the exporter, the investor, the export oriented undertaking or the exporting bank's manufacturer.
(2) In the application for supported financing, the person referred to in paragraph 1 shall indicate:
(a) their identification data;
(b) for a legal person, the structure of its members, including the indication of the beneficial owner under the law governing the registration of beneficial owners;
(c) the characteristics of the object and volume of export or investment and the required value of the product supported by financing or financial services related to export;
(d) data relating to the time distribution of drawing and repayment of the supported financing or duration of the financial service related to export;
(e) the estimated share of export value to be created in the Czech Republic,
(f) identification of the foreign person to whom the export credit is granted;
(g) other information specified in the General Terms and Conditions of the Export Bank.
(3) On the basis of the submitted request for supported financing, the Export Bank may conclude a credit agreement, an export-related contract or an export-related promise agreement or an export-related promise agreement following the examination of the information contained in the application and the risk of return assessment referred to in Article 3 (1).
(4) There is no legal claim for supported funding.
Comparison of interest differences
System classification
(1) The application for the inclusion of an export credit in the system of matching the interest differences associated with that export credit is submitted by the exporter's bank for a decision by the Ministry of Finance through an export insurance company. In the application for the inclusion of an export credit in the system of matching interest differences, the exporter's bank shall indicate:
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Regulation Information
| Citation | Act No. 58 / 1995 Coll., on Insurance and Financing of Exports with State Aid |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 24.04.1995 |
|---|---|
| Effective from | 24.04.1995 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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