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Law360, London (January 21, 2021, 3:03 PM GMT) -- The European Commission is considering ways to give businesses easier access to insurance cover for export credit to help them overcome economic challenges to the goods trade posed by the COVID-19 crisis.
The European Union's executive arm issued a series of proposals on Wednesday, and is for seeking responses from the sector by Monday. Providers of short-term export credit and Europe's member states are included in the review.
Export credit insurance is typically provided by private insurers and can be taken up by businesses that sell goods outside their own country to protect against non-payment by customers.
The commission said it is is examining whether it should extend permission for companies to continue to have access to insurance cover for exporting goods from a list of countries that it compiled in 2012.
"Depending on the results of the consultation, and taking into account the relevant economic indicators, the commission may decide to prolong the removal of all countries from the list of 'marketable risk' countries as a temporary measure, beyond June 2021," the executive body said.
The commission published a document in 2012, in which it said that EU member states should leave the insurance of short-term export credit to private companies or to public entities that act as so-called "market economy operators."
The commission said these risks are in principle "marketable" within a list of all member states and a small group of other countries such as Australia, Switzerland and the U.S. The move meant that trade within the EU and the other listed countries with a maximum risk period of up to two years should, in principle, not be insured by the state or state-backed insurers.
But COVID-19 has made it necessary that public short-term export credit insurance becomes more widely available. So, in March 2020, the commission temporarily removed all the countries appearing on the "marketable risk" list until the end of that year.
This was further extended to the end of June this year, and the commission now wants to assess whether the current temporary removal of all countries from the list is still justified.
COVID-19 has ravaged economies and forced governments and regulators to make special provisions for businesses.
British financial regulators set out relief measures in 2020 to ease corporate reporting rules for businesses, as insurers and banks faced unprecedented challenges in preparing and auditing financial information as the virus spread.
The insurance industry has also sought to help customers cope during the pandemic, such as by allowing them allowing them flexibility with policies.
--Additional reporting by Najiyya Budaly. Editing by Joe Millis.
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