Berlin Annual Report - AGA-Portal · PDF file2004 Annual Report 2004 – Export Credit Guarantees of the Federal Republic of Germany Export Credit Guarantees of the Federal Republic

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Export Credit Guarantees of the Federal Republic of GermanyHermes Cover

Annual Report

Head Office

Euler HermesKreditversicherungs-AGFriedensallee 254D-22763 HamburgPhone: (+49 40) 88 34-91 92Fax: (+49 40) 88 34-91 75Telex: 212115 [email protected]

D-60311 FrankfurtGroße Gallusstraße 1-7Phone: (+49 69) 13 48-159Fax: (+49 69) 13 [email protected]

D-79100 FreiburgBasler Straße 61Phone: (+49 7 61) 40 07 9-39Fax: (+49 7 61) 40 07 [email protected]

D-20251 HamburgStraßenbahnring 11Phone: (+49 40) 2 36 36-190Fax: (+49 40) 2 36 [email protected]

D-30159 HannoverGeorgstraße 36Phone: (+49 5 11) 3 64 01-90Fax: (+49 5 11) 3 64 [email protected]

D-50672 KölnHohenzollernring 31-35Phone: (+49 2 21) 9 20 60-293Fax: (+49 2 21) 9 20 [email protected]

D-04157 LeipzigLandsberger Straße 23Phone: (+49 3 41) 9 08 23-0Fax: (+49 3 41) 9 08 [email protected]

D-68259 MannheimHauptstraße 161Phone: (+49 6 21) 1 29 05-18Fax: (+49 6 21) 1 29 05-99 [email protected]

D-80339 MünchenRidlerstraße 35Phone: (+49 89) 5 43 09-143Fax: (+49 89) 5 43 [email protected]

D-90429 NürnbergSpittlertorgraben 3Phone: (+49 9 11) 2 44 05-15Fax: (+49 9 11) 2 44 [email protected]

D-66111 SaarbrückenBahnhofstraße 80Phone: (+49 6 81) 3 89 96-0Fax: (+49 6 81) 3 89 [email protected]

D-70597 StuttgartLöffelstraße 44Phone: (+49 7 11) 9 00 49-38Fax: (+49 7 11) 9 00 [email protected]

Export credit guaranteedepartment,Berlin

D-10117 BerlinFriedrichstadt-PassagenQuartier 205Friedrichstraße 69Phone: (+49 30) 20 94-53 10Fax: (+49 30) 20 94-53 [email protected]

Branch offices of Euler Hermes Kreditversicherungs-AG

D-12435 BerlinAn den Treptowers 3Phone: (+49 30) 20 28 43-23Fax: (+49 30) 20 28 [email protected]

D-33602 BielefeldZimmerstraße 8Phone: (+49 5 21) 9 64 56-0Fax: (+49 5 21) 9 64 [email protected]

D-28195 BremenMartinistraße 34Phone: (+49 4 21) 1 65 97-0Fax: (+49 4 21) 1 65 [email protected]

D-44137 DortmundLindemannstraße 79Phone: (+49 2 31) 1 82 99-90Fax: (+49 2 31) 1 82 [email protected]

D-01129 DresdenRiesaer Straße 5Phone: (+49 3 51) 8 53 77-0Fax: (+49 3 51) 8 53 [email protected]

D-40472 DüsseldorfKanzlerstraße 4Phone: (+49 2 11) 9 65 76-80Fax: (+49 2 11) 9 65 [email protected]

umschlag_2004_e.qxd 23.06.2005 14:26 Uhr Seite 1

117,600 117,000 117,000

27,262 29,659 27,546

73.8 74.5 76.1

16,434 15,989 21,067

76.5 75.1 75.8

17.5 17.7 16.7

6.0 7.2 7.5

2.5 2.4 2.9

332.3 449.6 472.9

821.1 797.1 1,029.3

477.7 718.5 855.3

343.4 78.5 174.0

688.9 514.0 558.5

173.7 108.6 124.9

513.1 403.0 432.3

2.1 2.4 1.3

63.2 63.3 65.6

401.6 669.4 878.0

12,583.2 11,913.6 11,035.5

18,254.1 17,664.7 17,063.6

2002Values inmillions EUR


Federal export guarantees at a glance


Statutory maximum exposure limit

Cover applications (number)

of which for SMEs in % 1)

Covered export volume

of which for developing countries in %

Central and Eastern Europe in %

Western industrial countries in %

Covered volume as % of total exports

Premiums

Recoveries 2)

Political risk claims

Commercial risk claims

Claims paid 3)



Exchange rate risk claims

Management fee

Annual financial result

Deficit accrued 4)

Amounts subrogated to Federal Government 5)

1) Employees with up to 5002) On political and commercial claims and rescheduling agreements3) Includes claims under political, commercial and exchange rate risk4) The annual deficits from 1983 till 1988 accumulated to 13,517m EUR as per 31.12.1998;

since 1999 accrued deficit has been progressively reduced by the annual surpluses5) (under claims paid/rescheduling agreements), the recoveries expected under these will be transferred

to the Federal Budget Accounts


Annual Report 2004


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Customer focus is the priority here. The responsi-ble ministries and the consortium operating underthe Federal mandate – Euler Hermes Kre-ditversicherungs-AG as lead partner and Price-waterhouseCoopers AG – define themselves, to-day more than ever before, as service providersacting in the interests of Germany by safeguard-ing jobs and promoting the reputation of Germanyas an industrial location, and by actively support-ing exporters. The primary focus here is on thespecial needs of small and medium-sized export-ing companies. Reliability and flexibility in pro-cessing cover applications combined with fastdecisions are high on the agenda. It is thereforegratifying to see that the customer satisfactionsurvey carried out in 2004 concluded that theexport credit guarantee scheme is regarded in avery positive light. The German scheme also getsvery good marks in comparison with other ECAs.

We set great store by an intensive dialogue withour policyholders. The dialogue event held on18th May 2004 at the Federal Ministry for Eco-nomics and Labour is just one example of theongoing exchange of information and the dis-cussions which we carry on concerning newdevelopments and needs in the Federal exportcredit guarantees. A detailed account of this canbe found in this annual report.

2004 was an excellent year for the Federal exportcredit guarantee scheme. A new record wasestablished with 21.1 billion EUR in cover grant-ed for exports during the year. At the same timea record surplus was generated, so that thereduction of the deficit run up during the Eightiesand early Nineties is proceeding apace. This pos-itive development is due to a number of factors:

I would like to stress that this instrument for thepromotion of exports is rigorously focussed onthe needs of German exporters, who play anextremely important role as a macroeconomicfactor and in creating jobs, more so even than inother countries. The high proportion of small andmedium-sized enterprises involved in export –who are world-beaters in many sectors – and theexcellent bandwidth of products manufacturedfor export are a crucial element of Germany’seconomic strength. Our export credit guaranteestake full account of this and thus are able tostand at the companies’ side effectively in theinternational competitive arena.

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Message from Wolfgang Clement

Wolfgang Clement,Federal Minister

for Economics and Labour

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A very important factor for German exportingindustry is the fact that we have moved onto theoffensive in our response to the shift observableover recent years from political to commercialrisks. It has meanwhile become standard prac-tice to assume Hermes cover on the basis ofbank guarantees or corporate risk, since stateguarantees are in most cases no longer forth-coming, even in the former state-run economies.The best example of this is Russia, where guar-antees from more than 40 commercial banks arealready accepted by us as security. The evalua-tion and management of commercial risks incooperation with the policyholders is of strategicimportance, since we want to be able to upholdan optimal range of cover options in a changingeconomic environment while at the same timeacting in compliance with the budgetary rule thata risk must be justifiable.

It is worthwhile taking a short look back: it provedpossible over the last few years to reopen coveron many important markets, including – asreflected in the current figures of guaranteesgranted – such important countries for Germanexporters as Russia and Iran. This was precededin each case by the regulation of remaining olddebt, such as the arrangement reached withLibya in 2004. We hope in the current year to beable to improve the cover options for a number ofkey countries, so as to also contribute to theireconomic development. A particular focus ofattention is of course Iraq, where we are closelyfollowing the ongoing, unfortunately very difficultsituation. The regulation of Argentina’s Paris Clubdebts would also be an important step forward inenabling cover to be given again on public sectorbuyers there. We have already been able toreopen a substantial amount of cover on privatesector business under a cover ceiling.

As one of the world’s main industrial and export-ing nations, Germany needs a strong, flexibleexport credit guarantee scheme in tune with ourneeds. Our export credit guarantees are availableto German exporters today in all the principalgrowth markets. It is my hope, in view of itsimportance for jobs and Germany’s manufactur-ing base, that demand will continue at the pres-ent high level.

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Contents

8 Business overview 2004

10 The Interministral Committee

12 A Dialogue with Exporters12 Dialogue event on 18.5.2004 in Berlin14 Tapping export potential in growth markets15 Liquidity for small and medium-sized enterprises15 Foreign content and local costs16 The environment – exports with a social conscience17 Multi-sourcing

18 Conference “New challenges in commercial risk” on 26.11.2004 in Berlin

19 Conference “Claims and recoveries” on 29.9.2004 in Hamburg

20 Small and Medium-Sized Enterprises

21 The promotion of renewables energies

22 An exchange of views on environmental issues

22 Important innovations and issues22 Protracted Default is insured as a standard23 Marketable risks25 Credit line facility cover – now available to commercial banks25 Cover can also be denominated in local currency26 Receivables for additional work under constructional works transactions27 Buyer surcharge for commercial risks in countries with premium Category 128 Environmental aspects28 Transparency29 Customer satisfaction study

31 Special forms of cover31 Project financing and structured finance 35 Aircraft business37 International cooperation in aircraft business38 Shipping business

39 Country cover policy40 CIS countries, Central and Eastern European countries

and South Eastern Europe

4 1 CIS countries

45 Central and Eastern European countries

45 South Eastern Europe

46 Africa

49 Latin America and the Caribbean

53 Asia

58 The Middle East

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62 International Cooperation

62 Developments in the OECD

64 European Union

65 Berne Union

67 Cooperation with credit insurers in other countries

70 Development of export credit guarantees

70 Cover for new business72 Breakdown of newly covered business by country groups

74 Breakdown by horizon of risk and type of cover

77 Number/volume of applications, types of goods covered

78 Claims and recoveries, rescheduling78 Claims payments

80 Recoveries

81 Rescheduling82 Iraq82 The effects of the tsunami disaster in South Asia8383 Russian Federation – early repayments83 Argentina

84 Rescheduling agreements85 The HIPC initiative

86 Profit and loss account

86 Revenues

87 Expenses

87 Financial result

88 Export Guaratee Portfolio

88 Statutory cover limit, total commitment level and total outstanding risk

90 Regional distribution of outstanding risk

90 Funds earmarked for export credit guarantees at year-end

91 Unrecovered claims

92 Annex

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Russian Federation – the ARIES transaction

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Business Overview 2004

In the year just ended, the Federal Governmentassumed new export credit cover to the tune of21.1 billion EUR. This marks the highest volumeof cover ever so far in the 55-year history of theHermes guarantees. The rise of 31.8 % over theprevious year is due to the increased demand forexport credit guarantees in particular in the TopTen countries, those with the highest levels ofnew cover. The surge in export credit cover prof-ited from the strong upturn in worldwide tradingflows and even exceeded the record result inoverall export growth (10.9 %).

Business overview 2004

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In terms of the financial result, too, 2004 was arecord year: the previous year‘s surplus, thehighest to date, was once again exceeded. With878 million EUR, the federal budget accountsposted a positive result from the scheme for thesixth consecutive year. The surplus, which is duein large measure to the recoveries underrescheduling agreements, reduced the historical-ly accrued deficit of the scheme. Against thebackground of expected early repayment ofrescheduled debt by major debtor countriessuch as Russia and Poland, there is everyprospect of further large surpluses in the future.

2004 was a year of intensive dialogue betweenthe Federal Government and exporters. Decisivecriteria for the successful development of theexport credit guarantee scheme are flexibility andadaptability in dealing with changing markets andeconomic environments. In order to provide theoptimum in support for exporters, the FederalGovernment and the mandatary consortiumhave intensified their contacts and their directexchange of information and further expandedtheir range of consultancy services for exportingcompanies.

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The export credit guarantees granted by the Fed-eral Government are a central instrument for thepromotion of foreign trade and strengthen theposition of German exporters in their internation-al competition for business. They are especiallyimportant for German exports to markets besetwith risks, where no cover is available from pri-vate insurers. A good 95 % of export credit guar-antees regularly go to support deliveries or proj-ects in the threshold, developing or transitioncountries. As in previous years, the main coun-tries here are China, Iran, Turkey, Russia andBrazil, which have topped the list of the mostimportant markets for Hermes cover for severalyears now.

Hermes guarantees play a relatively insignificantrole in exports to the industrialized world, whichis the recipient of the vast majority of Germanexports. Several large shipping transactions con-tributed significantly to the rise in the share ofcover for the industrialized countries to 7.5 %.

16.7 % of the export credit guarantees wereaccounted for by the countries of Central andEastern Europe, including Russia and the CIS.Cover for exports to the developing and thresh-old countries, at 75.8 %, once again accountedfor the lion’s share, while export credit guaran-tees for the Asian developing countries, fuelledby the demand in China, rose by 58 %.

A breakdown of the cover portfolio by horizon ofrisk reveals an increase in medium- and long-term business of 51.5 % to just under 7.7 billionEUR. Short-term business rose by 22.6 % to13.5 billion EUR. Wholeturnover policies wentup from last year’s already high level by 10.6 % toreach a new figure of 8.7 billion EUR. Short-termspecific cover has more than doubled in com-parison with the previous year to 4.2 billion EUR.This is a significant indicator for a trend whichwas already becoming apparent last year: manycapital goods exports are financed on short pay-ment terms, although they would have been eli-gible for longer credit periods. This is especiallythe case with exports to China.

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The Interministerial Committee


The Interministerial Committee (IMC) for theexport guarantees of the Federal Government,chaired by the Federal Ministry of Economics andLabour, examines all major applications anddecides whether to grant cover. It also debatesbasic policy issues and is responsible for themodernisation of the export credit guaranteesand the formulation of cover policy, which setsout the scope and conditions of cover.

The Federal Government has mandated theadministration and handling of the export creditguarantee scheme to a private consortium with

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Following the expansion of the Israeliport of Hayovel in Ashdod, KOCKS

Crane International GmbH in Bremenreceived an order to deliver and install

four container bridges.

Containers and general cargo up to55 tonnes, in heavy load operation up

to 94 t, can be transhipped withthese modern container-ferrying

gantries at speeds of up to 70m/min.This will considerably expeditecontainer handling in the port.

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Composition of the Interministerial Committee – IMC

BMWA

BMF

AA

BMZ

Federal Ministry of Economics and Labour

– lead function –

Federal Ministry of Finance

Federal Ministry for Foreign Affairs

Euler Hermes

Kredit-

versicherungs-AG

Pricewaterhouse-

Coopers AG

KfW banking group

AKA Ausfuhrkredit-Gesellschaft mbH

Federal Audit Office

Exp

erts

Federal Ministry for Economic Cooperation and

Development

Man

dat

ary

cons

ortiu

m representatives of exporting industry and the

banking sector

Euler Hermes Kreditversicherungs-AG as leadpartner. The companies working under this man-date prepare decisions on applications for con-sideration at the meetings of the IMC and advisethe Federal Government together with expertsfrom exporting industry during the decision-mak-ing process. Besides the Federal Ministry of Eco-nomics and Labour, which has the lead function,the Federal Ministry of Finance, the Ministry forForeign Affairs and the Federal Ministry for Eco-nomic Cooperation and Development also havea vote in the IMC. Decisions are always made ona consensus basis.

Besides the further improvement of the under-writing tools as part of the Federal Government’sforeign trade and investment initiative, the IMCcarried on an intensive dialogue with exportersand banks in the year under review in order tointroduce innovative developments to adapt theforms of cover to the changing requirements ofthe market.

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A Dialogue with Exporters

The export credit guarantees granted by the Fed-eral Government are an important and reliableform of support for German exporters in theircompetition for international business. An inten-sive exchange of experience and informationwith banks and exporters is the basis uponwhich the underwriting tools of the export creditguarantees are adapted to the latest develop-ments and changing demands of the market,and practical solutions can be found for individ-ual needs. 2004 was marked by the intensifica-tion of this dialogue. An approach which sees thescheme as a partner of business, together withan open exchange of information, makes it easi-er to successfully meet the challenges now fac-ing us.

Three central conferences took place, in each ofwhich an extensive circle of participants drawnfrom banks, exporting industry and various asso-

ciations discussed fundamental issues andaspects of state-supported export credit cov-er. These included such topics as liquidity forsmall and medium-sized enterprises, the devel-opment of commercial claims, the environmentand export potential.

Dialogue event on 18.5.2004 in Berlin

The conference “Federal export credit guaran-tees in dialogue with industry” held by the Feder-al Ministry of Economics and Labour on18th May2004 in Berlin, which was attended by some 250representatives of industry, commerce, banking,the diplomatic community and business associa-tions, generated important impulses.

The outstanding significance of this event wasunderlined by Undersecretary of State Dr. AlfredTacke in his welcoming address. He emphasizedthat the Federal Government export credit guar-antees provided effective and indispensable sup-port for German exporters, and in particular forsmall and medium-sized companies, due to their

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reliability and flexibility. He defined internationalcompetition and international cooperation, tap-ping the potential of new markets, catering for theneeds of small business and the environment asthe central challenges for the scheme. Dr. Tackeurged the participants to engage in an active dia-logue and assured them that the Federal Govern-ment would continue in future to make full andinnovative use of all the options available to sup-port exporters effectively and reliably.

This exhortation was taken up by Dr. MichaelRogowski, President of the Confederation of Ger-man Industry (Bundesverband der DeutschenIndustrie (BDI), in his speech. It was especiallyimportant in the emerging markets that Germanexporters should be given the means to ade-quately secure their risks. He drew attention tothe excellent opportunities which German com-panies had to export cutting-edge technology tothe dynamic growth markets – for which the Her-mes guarantees, as the central instrument ofexport promotion, were indispensable, particular-ly through the accompanying role they play forexporting industry in opening up new markets.

Dr. Hans Janus, Member ofthe Board of Management of EulerHermes Kreditversicherungs-AG,pointed out that only a financiallyhealthy, self-supporting and politi-cally uncontroversial system ofinstruments for the promotion ofexports was able to fulfill its taskefficiently. A crucial prerequisite forthis is that premiums cover the riskscurrently assumed and that it is nota form of subsidy. The further devel-opment of the underwriting toolsavailable, which had already beenmodernized in an impressive man-

ner, must continue, especially in order to be ableto open up refinancing options for SMEs.

The participants discussed both the currentdemands on the scheme and the export poten-tial of various growth markets in a series of con-ference workshops. Topics of discussion herewere the further improvement of refinancing pos-sibilities, cover for foreign content, the responsi-ble treatment of environmental aspects and mul-ti-sourcing as an opportunity for the financing ofmajor projects.

The conference “Federal export credit guaranteesin dialogue with business” took place on 18th May2004 in Berlin.

Left to right: Dr. Michael Rogowski, Dr. AlfredTacke, Dr. Hans Janus, Dr. Michael Kruse.

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involved in requiring or actuallybeing able to obtain security forselected transactions against thebackground of international compe-tition were also discussed in thiscontext. On the other hand, themandatary consortium pointed totheir experience in processingclaims, e.g. the fact that local cred-itors often received preferentialtreatment under security intereststaken.

The withdrawal of the public sector,e.g. from the financing of majorinfrastructure projects, leaves gapswhich the private market cannot fillwithout developing innovativefinancing instruments, due to theabsence of security. Focussing onthe example of Russia, the partici-pants showed interest in regionalguarantees or other forms of statesecurity, so as to be able to realizemore projects. In this context thewish was expressed towards theFederal Government that theyshould show greater willingness toassume cover for transactions inlocal currency. A tendency was

Tapping export potentialin growth markets

The perspectives and risks in thegrowth markets, in particular Asia,Central and Eastern Europe, the CIScountries and Iran were the startingpoint for discussions. All those whotook part observed that the IMCmust react to the very different legaland economic environments in theregions mentioned above flexiblyand in ways appropriate to individ-ual cases, in order to effectivelysupport German exporters.

The continuing process of liberaliza-tion and privatization in the majorityof countries has quite clearly dimin-ished the importance of the publicsector as a buyer. This means thatprivate sector importers are nowcoming to the fore. The importanceof bank-to-bank credits and trans-actions on the basis of corporaterisk, i.e. the creditworthiness of thebuyer company, faces exporters,banks and the export credit guaran-tee scheme with new demands forrisk assessment. The participantsproposed determining the require-ments for risk assessment on acase-by-case basis. The problems

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Dialogue event on 18.5.2004 in Berlin

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observable to denominate thefinancing of major projects inregional centres of growth with rela-tively stable currencies in local cur-rency.

Liquidity for small andmedium-sized enterprises

Small and medium-sized exportersdeclared that export transactionscould only come to fruition whensecure financing was available.They reported that it was becomingincreasingly difficult to ensure liq-uidity during the handling phase.The reasons given for this included,besides the traditionally weak capi-talization of SMEs, the increasinglyrestrictive lending policy of thebanks. This tendency was not onlydue to Basel II casting its shadowbefore it, but had already beenapparent in recent years. On top ofthis, there was sometimes a “com-munication barrier” between banks

and exporters due to the everincreasing complexity of exporttransactions and new markets forproducts in geographical regionswhich had previously been outsidethe focus of financing. The export-ers underlined the important roleplayed by the Hermes guarantees,since the bank rating for themwould be considerably worse with-out a Hermes guarantee.

Hermes cover, it was confirmed byexporters and banks, is a tried andtrusted means by which companiescan refinance themselves. Smalland medium-sized exporters, how-ever, have a particularly urgent needof improved refinancing options fortheir business, in order to enhancetheir liquidity position. In practicalterms, based on their experiencewith banks, exporters demandedthat the Federal Government shouldabove all grant cover for abstractadvance payment guarantees andperformance bonds. Such guaran-

tees should also, in contrast toexisting cover, be extended toinclude so-called “fair calling”, thuscovering them against the risk ofbond calling under any transaction.Representatives of the banksagreed that this would relieve thestrain on exporters’ credit lines withthe banks and thus make additionalliquidity available.

Foreign content and localcosts

Another workshop was devoted tocontent from foreign subcontractorsand its inclusion in Hermes cover.Exporters pointed out that, due toworldwide competition and theinternational distribution of produc-tion in the age of globalization,deliveries from foreign supplierswere increasingly a necessity intheir transactions. Despite theirgeneral satisfaction with the regula-tions in the German system and the

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decision-making process in theInterministerial Committee, the dis-cussion revealed the desire for evenmore flexibility in individual cases.An additional aspect was the possi-bilities and the limits of risk-sharingbetween the various state exportcredit insurers as regards the provi-sion of cover for foreign goods. Inthis frame of reference the partici-pants discussed possible ap-proaches for the expansion ofoptions for foreign goods throughsupplementary regulations for affili-ated companies as well as the pos-sibility of reinsurance agreementsoutside the circle of the OECDcountries.

The conflicting demands of interna-tional competitiveness on the onehand and the interest in as large aGerman share in a transaction aspossible on the other have sparked

declared goal on the issue of theenvironment and export credit guar-antees. A major step towards imple-menting this dual strategy is theapplication of the OECD Environ-mental Principles which have beenin force since 1st January 2004. Theyguarantee for the first time commonenvironmental audit procedures forall OECD export credit agencies(see P. 28). This provides a morelevel playing field for Germanexporters and ensures a responsi-ble approach to dealing with envi-ronmental issues.

The participants were in agreementthat the conditions set by develop-ment aid institutions (such as theWorld Bank) could only be partiallytaken over for ECA projects. Thepower of an exporter to exert a con-crete influence on the way in whicha project is realized is not compara-

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an ongoing discussion on the issueof foreign content and local costs,and mean that it will stay high onthe agenda at the international levelas well. The Federal Governmentassured the exporters that their pol-icy on decisions would remain flexi-ble and take account of thespecifics of each case. On top ofthis, the network of cooperationwith other export credit agencieswas being extended and furtherdeveloped.

The environment – exportwith a social conscience

Export with a social conscience –the possibilities and limits of theunderwriting tools deployed by theexport credit guarantee schemeand how they could contribute tosustainable economic developmentbecame apparent in this discussion.

Making exports possible in order tosafeguard know-how and jobs inGermany, while at the same timepaying attention to sustainabledevelopment in the buyer countries– this is the Federal Government’s

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ble with the room for manoeuvre ina development aid project, wherethe donor of aid plays a decisiverole in accompanying and advisingthe partner country in the selection,design, planning, direction andmonitoring of projects. Applying thestandards of politically motivateddevelopment aid to ECA projectsappears above all problematic whenthey have no direct connection withthe project to be supported.

The exporters repeatedly empha-sized that it must remain the goal ofthe Hermes scheme to promoteexports, and that state export cred-it guarantees were unsuitable as theprimary instrument of leverage toachieve aid targets. At the sametime there was general agreementthat ecological, social and develop-mental aspects had an importantrole to play in deciding on whatprojects to cover and that the exist-ing scope of influence to makeimprovements should be used tothe full. This is particularly the casein project financing transactions,where the exporter and the exportcredit insurer can bring their influ-ence to bear more successfully onthe buyer due to the greaterdependency of the project sponsoron the financing conditions.

In the case of projects with a sub-stantial potential environmentalimpact, cooperation between theapplicant and the buyer to achievepossible improvements should be apriority.

The withdrawal of the financiers andthe exporters would only result inleaving the field open for a foreigncompetitor and losing any possibili-ty of influence to achieve environ-mental improvements.

The participants emphasized thegreat value they placed on interna-tional cooperation between ECAsand the development of commonregulations – such as the OECDenvironmental guidelines – for theexport credit guarantee scheme.The work carried out in this fieldduring recent years was regardedas very positive. An appeal wasmade to the NGOs to play a con-structive role in the further process.

Multi-sourcing

Another of the workshops dis-cussed the opportunities andoptions presented by multi-sourcingprojects. These are projects involv-ing exporters from different coun-tries and sometimes multinationalfinancing. The participants in thediscussion see multi-sourcing as apossibility for the financing ofimportant large-scale or infrastruc-ture ventures, since the risks can bedistributed among a number ofpartners in this way. The FederalGovernment actively accompaniesand supports multi-sourcing proj-ects. A broad spectrum of availablestate guarantees and close cooper-ation between the ECAs internation-ally facilitate the realization of suchprojects. The financing for majorinfrastructure projects is often han-dled by international financing insti-tutes. The decisive factor, however,

is cooperation and coordinationbetween those involved, frequentlya large number of them: a recurringtheme raised in the workshops wasthe necessity for lean and efficientprocedures and internationally stan-dardized verification requirements.

A wish particularly close to thehearts of the participants was theinvolvement of the ECAs at an earlystage and a more active role of theGerman export credit guaranteescheme in the negotiation phase ofprojects, in order especially to sup-port those German exporters whocan potentially take the lead role ina multi-sourcing project.

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Conference “New challenges in commercialrisk” on 26.11.2004 in Berlin

The government departments and the man-datary consortium are holding discussions withthe banks on the challenges arising out of theincrease of commercial risks in the business cov-ered by Hermes guarantees. Almost 80 % of allclaims made today are under commercial riskcover. The previous dominance of political claimshas diminished accordingly. A fact which shouldnot be overlooked here is that the expectationsof recoveries in commercial claims are very low incomparison to political claims, which generallylead to successful recovery under reschedulingagreements.

The participants were in agreement that analyz-ing the risks on a case-by-case basis for eachtransaction has taken on central importance. Thebanks reported that they had already respondedto this challenge and taken appropriate steps,not least with the regulations under Basel II inmind. The representatives of the consortiumexplained what they were doing to enhancecredit assessment procedures for the exportcredit guarantees. In cases where a historical

evaluation of balance sheet figures is insufficientgrounds for a positive decision from the IMC, thepossibility of including aspects with a future per-spective such as profitability analyses or marketposition is examined.

One crucial result was that ongoing credit moni-toring or credit management is needed after cov-er for a transaction has been granted. If signs ofan imminent loss event appear, it thus becomespossible to react at an early stage. In such casesthe banks are expected to evaluate the econom-ic situation of the debtor and actively make pro-posals for possible strategies. These should thenbe agreed together with Euler Hermes. The Fed-eral Government can lend support in negotia-tions with the debtor in individual cases and takeover the task of coordinating action, for instancewith other ECAs.

All those involved emphasized that close coop-eration on the basis of partnership is importantfrom the application phase through to the dis-charge of all obligations for a transaction. Theelements of risk assessment, too, should be con-tinually improved. It is only through such mutualexchange that the IMC is able to cover commer-cial risks and support German exports effective-ly. A detailed report on the event can be seen onour website at www.agaportal.de/pdf/eng/hcs_commercial_risks.pdf.

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Conference “Claims and recoveries” on 29.9.2004 in Hamburg

A practice-orientated conference on how to pro-ceed when a loss occurs took place on 29th

September 2004 in Hamburg. At this, expertsfrom the consortium discussed what to do whenpayment difficulties arise, the indemnificationprocedure and taking legal action with 120 smalland medium-sized exporters in various work-shops.

While a claim can be paid speedily in the case ofa political claim due to the clearly defined situa-tion, it is more difficult to verify a commercialclaim in some cases and to assessthe chances of success of the indi-vidual claim. The crucial factorwhich can speed up indemnificationis therefore full and complete docu-mentation of what has happened inthe covered transaction. Otherissues here are credit monitoringand loss management in recoveryactions and company restructur-ings. Active attempts to recoverdebts are particularly importantsince, in contrast to political claims,every commercial claim has to bedealt with on its own merits.

It soon became apparent that it is aproblem, especially for small busi-nesses, to monitor the progress ofdebt recovery over years. Due tothe provisions of the budget law,however, the Federal Government is only permit-ted to discontinue collection of a debt if andwhen it is established that the measures taken torecover the monies have no long-term prospectof success or the costs are disproportionatelyhigh in comparison to the amount of the debt.

Interest in this practically-orientated conferencewas so great that two additional practical work-shop sessions on claims are planned before theyear is out. This is a clear signal that the issue ofclaims and collection in particular is one of greaturgency for SMEs.

“You are not alone when a loss occurs – from pre-claim notification to recovery after indemnification”was the title of a workshop for SMEs.

Left to right: Peter Bildstein, Stefan Schloesser, Peter Linse, Dieter Wojahn.

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On the right: Meeting the exporters on theirhome ground: the Federal export credit

guarantees presented themselves at confer-ences in Erfurt, Frankfurt and Stuttgart.

On the left: The Chairman of the IMC, Dr. Hans-Joachim Henckel, explains how the FederalMinistry for Economics and Labour views theexport credit guarantee scheme.

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Small and Medium-Sized Enterprises

Specialty issues and general introductions to theexport guarantees were the hallmark of manyconferences and appearances at trade fairs atwhich speakers from the Federal Ministry of Eco-nomics and Labour, experts from the consortiumand client consultants sought a dialogue withexporters on their home ground and presentedthe instruments available for cover. In the prac-tice-orientated discussion of issues of topical rel-evance, the exporters received focussed adviceand support. Many events were held in coopera-

tion with chambers of commerce, industry asso-ciations or banks. For the first time regionalevents were put on, and these too met with greatinterest. Such opportunities to get in touchdirectly with experts who can answer their ques-tions on how to secure their business are of par-ticular benefit to the representatives of smallbusiness.

In order to enable the exporters to use the pos-sibilities of the cover instruments to the full, theywill be given the opportunity to inform themselvesin the current year at many events and at tradefairs. On top of this, contacts and the dialogueon practical options can be pursued andexpanded in conjunction with chambers ofindustry and commerce. Speakers from the Fed-eral Ministry of Economics and Labour as well asexperts from the consortium stand ready toadvise exporters.

The export credit guarantees play an outstand-ing role for SMEs in securing exports to markets

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The Federal Government is bringing its influenceto bear at OECD level to create more flexible reg-ulations for the granting of state export creditguarantees for renewable energy projects, inorder to facilitate financing for such ventures.Exporters are asking for longer credit horizons,since renewable energy projects can otherwisehardly be financed due to the high initial capitaloutlay and the relatively low earnings as a resultof fixed offtake prices.

beset with problems as well as – with Basel IIlooming in the background – in generating liquid-ity. A Federal Government export credit guaran-tee can facilitate financing, if indeed it is notexpressly required by the financing bank assecurity. It enhances the value of the debt for thelender, since it does not need to be covered byhis equity capital. This is why some three quar-ters of all applications for cover regularly comefrom small and medium-sized enterprises.

The continuing success of the wholeturnoverpolicy light, which is specially tailored to theneeds of small business, shows that the FederalGovernment has here created an attractive toolof cover.

The promotion of renewable energies

Germany can boast world-class renewable ener-gy technology. Reinforcing export activities in thissector is particularly important to the FederalGovernment, since at the same time it strength-ens the position of Germany as a producer ofindustrial goods – especially for SMEs – and alsopromotes sustainable international growth. TheFederal Ministry of Economics and Labour andthe consortium have further reinforced their activ-ities in this field and intensified the dialogue withmanufacturers and project teams involved inrenewable energy technologies on suitableinstruments to promote exports. They also par-ticipated in many conferences dealing with theissue (including the climate conference “Renew-ables 2004” in Bonn). Intensive discussion tookplace at these events on the possibilities of usingHermes guarantees as well as financial invest-ment guarantees in the export of renewabletechnologies and developing these options.

Columbia’s first wind farm comprises 15 wind turbinesdelivered by the Hamburg-based Nordex AG. Afterinstalling the turbines, the company will maintain themand handle technical operations for one year.

Average wind velocities of 10m/sec. have been meas-ured at the location in northern Columbia. With a gooddistribution curve of wind occurrence, high annualenergy generation can be expected. The target is toachieve a broader mix of electricity generation in orderto prevent supply bottlenecks.

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The existing regulations already offer a widerange of cover options for exporters of renewableenergy technologies. Under the currently validconditions of the Consensus, for example, acredit horizon of up to 12 years is already per-missible for power stations – which often oper-ate with renewable technology. In addition undercertain circumstances there is the option of moreflexible treatment of repayments and the permis-sible credit periods in a project financing frame-work.

An exchange of views onenvironmental issues

Another goal of the Federal Government wasreinforcing the sustainability of exports byensuring, in close cooperation with exporters,banks, industry associations, NGOs, other ECAsand international institutions, that projects areenvironmentally friendly. This involved not only alarge number of events providing information toexporters, but in particular the active participa-tion in the UNEP environmental workshop held inRome. (UNEP = United Nations EnvironmentProgramme, an agency of the UN). This year, theconference focussed among other aspects onthe goal of promoting investment in renewableenergy and other environmental technologiesthrough launching initiatives for improved financ-ing and insurance options. This was the fourth

time that experts from ECAs, members of theUNEP Finance Initiative, development banks,other financing institutes and non-governmentalorganizations had met for an exchange of expe-rience and ideas surrounding the issue of exportsand the environment.

Important innovations and issues

These events confirmed the correctness of thecourse the Federal Government had already tak-en in its foreign trade and investment initiative topursue innovative developments of the exportcredit guarantee system in order to make efficientinstruments of cover available to exporters. Itwas thus able to further improve the underwritingtools during the year under review, while the cov-er options for many countries were extended dueto a general, regular monitoring of cover policyfor all markets worldwide.

Protracted Default is insured as a standard

As of 1st November 2004 an important newinnovation was introduced: protracted default isnow insured in short-term specific and revolvingguarantees. This means that an insured event isalso deemed to have occurred if the agreed pur-chase price has not been paid six months afterdue date. Up to now, insured exporters had toprove the insolvency of their foreign buyer in thecase of losses under commercial risk. Throughprotracted default, hitherto only available forbusiness with public buyers and under whole-turnover policies, the exporter can already beindemnified if his buyer has still not paid theinsured receivables after a period of six monthsafter due date has elapsed and he has taken

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Uhde GmbH in Dortmund took advantage ofHermes guarantees for a turnkey project to erect a

fertilizer plant for the newly founded AlexandriaFertilizers Co. at Abu Qir in Egypt.

This will make Abu Qir one of the largest facilitiesfor the manufacture of fertilizer worldwide.

The local environmental protection rules, whichhave more stringent permissibility levels than the

World Bank guidelines in some respects, arebroadly exceeded.

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steps to collect the debt during this time. Pro-tracted default covers both the unwillingness andthe inability of the importer to pay, irrespective ofthe reason or the cause of non-payment. Thisprovides general cover for non-payment ofreceivables.

This considerably improves the quality of coverfor exporters at no extra premium cost and withthe same self-retention, so that a rise in demandfor this type of cover is on the cards.

Marketable risks

There have been some changes in the coveroptions for short-term business in the EuropeanUnion. The EU Commission prohibits the grant-ing of state export credit guarantees for exportson short financing terms with credit periods up totwo years within the EU and to the core OECDcountries. Following the expansion of the Euro-pean Union to include the ten accession coun-tries as of 1st May 2004, the Commission holds

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the view that all short-term creditrisks in these countries are to beregarded as marketable. Since theother European ECAs also postu-late a large measure of marketabili-ty in insuring short-term business to the acces-sion countries, they already transferred the short-term business to private credit insurers in 2004and discontinued cover as from 1st January 2005at the latest. The Federal Government, in closecooperation with exporters, the private creditinsurers, reinsurers and banks and industry asso-ciations, held consultations and discussions onthe issue of marketability in short-term business.As a result, the Federal Government has discon-tinued cover for this segment under normal cir-cumstances as of 1st January 2005, following atransition period during which exporters wereable to choose.

It is only in the wholeturnover policies light thatthe option of insuring exports to the accessioncountries for SMEs with an insurable turnover upto one million EUR remains open. The availabilityof private sector credit insurance cover cannotbe completely guaranteed for these exporterssince it does not fully correspond to that previ-ously on offer from the Federal Governmentscheme. The Federal Ministry of Economics andLabour stands ready to find solutions in prob-lematic cases together with the private creditinsurers.

A fully automated plant for themanufacture of aerosol cans was

supplied to a US buyer by theSwabian company Hinterkopf GmbH.

An integrated printing unit spray-paints and prints the labels on thecans, which are produced in one

piece and made of aluminium.

For this small company, the financingof this transaction by means of a

Hermes guarantee is an importantelement in securing its liquidity.

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Germany is the EU member country most affect-ed by this ruling due to its strong trading flowswith Eastern Europe. The volume affected by thediscontinuation of cover for short-term exportreceivables due from the accession countries issome 1.4 billion EUR, representing about 10 %of short-term business.

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Credit line facility cover – nowavailable to commercial banks

The IMC has made further improvements tocredit line facility cover and made access to iteasier. Credit line facility cover bundles a numberof small tied finance credits issued under a cred-it line facility. After the direct benefit of this form ofcover was at first only available via the Kredi-tanstalt für Wiederaufbau (KfW) and AKA Aus-fuhrkredit-Gesellschaft mbH, credit line facility

cover has now been directly accessible to allGerman banks since July 2004 (includingbranches of foreign banks domiciled in Ger-many). The prerequisite for credit line facility cov-er is that a basic agreement has been signedbetween the Federal Government and the bankstipulating a common set of rules for all transac-tions under credit line facility cover. Credit linefacility cover bundles many small credits – thismay be done both for bank-to-bank credits andfor bank-to-buyer credits – in a simplified andinexpensive procedure, thus giving small export-ing companies access to financing possibilities.Nine contracts have already been concluded.

Cover can also be denominatedin local currency

Another improvement is the option of denomi-nating cover in foreign currency, an expresswish of exporters. Since 1st July 2004, exportcredit guarantees can be granted for receivablesdirectly denominated in the currency of theexport or credit finance contract. As contractcurrency of the export credit guarantees,exporters can choose between the US dollar, thepound sterling, the Japanese yen and the cur-rencies of Australia, Denmark, Iceland, Canada,New Zealand, Sweden and Switzerland.

In contrast to the previously available option ofsecuring foreign currency receivables by a euro-denominated export credit guarantee, conver-sion into euros is here largely unnecessary, sinceboth the premium and any indemnification whichmay occur are each paid in the foreign currencystipulated. This dispenses with exchange raterisks and administrative costs for the exportersand the banks; this makes processing consider-ably easier in a reinsurance arrangement with

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other foreign ECAs. The policyholder can basi-cally choose between either an export creditguarantee in euros or in one of the currencieslisted above.

When an export credit guarantee in foreign cur-rency is granted, a surcharge of 10 % is added tothe premium amount – which is payable in theforeign currency – to cover the Federal Govern-ment’s exchange rate risk.

Receivables for additional workunder constructional workstransactions

The IMC has resolved to introduce a maximumlimit guarantee to provide improved cover foradditional payments charged after contract sign-ing in constructional works transactions. Suchadditional receivables accrue as a result of extrawork which is only recognized to be necessaryduring the course of construction and which thepolicyholder is obliged to carry out under the pro-visions of the construction contract, prior tonegotiating a price for the extra work with thebuyer. Due to these special circumstances,which typically do not occur, for example, in plantconstruction, this type of cover is only availablefor constructional works transactions.

A binding maximum limit for such additionalreceivables is included in the cover at the outsetwhen the contracted transaction receives a guar-

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antee. The insurable payments due in respect ofthe specific additional work done are automati-cally covered as long as the maximum limit stillcontains a sufficient amount of free cover.

The policyholder is obliged to notify to the Feder-al Government all additional work charged inorder to calculate the actual premium amountsdue. An advance premium of 5 % of the premium

calculated on the maximum limit is payable,based on the conditions applying to short-termsupplier guarantees. After notification of theamount due for an item of additional work, thepremium for it is invoiced immediately, setting offpro rata the advance premium already paid. Noadvance premium can be refunded for amountsleft unused under the maximum limit.

Buyer surcharge for commercialrisks in countries with premiumCategory 1

The IMC has set the buyer surcharge for medi-um- and long-term business with Western indus-trial countries in the German premium system atnew levels, deciding to triple the buyer surchargefor countries in premium Category 1. The distinc-tion between private sector buyers and bank-guaranteed business will no longer be made. Thesimple buyer surcharge will only remain in thecase of buyers with at least an AA rating.

The background to this change is that the buyersurcharge hitherto applicable was not commen-surate with the commercial risk actually pertain-ing in business with these countries. Since otherECAs are similarly insuring more and more com-mercial risk, a consensus emerged that premiumwith regard to the buyer surcharges should beharmonized or set at more risk-based levels.Work on this is already under way. The tripling ofthe buyer surcharge resolved by the IMC forcountries in premium Category 1 is thus only anecessary stop-gap measure until a full-scalesystem has been internationally agreed.

Anton Steinecker Maschinenfabrik GmbH inFreising was entrusted by a Mexican brewery withthe expansion and modernization of their facilitiesat several locations.

The equipment supplied included an entirebrewing house and a newly built cooling area. The new plant will enable a considerable increasein production capacity. In line with the companypolicy of the Mexican buyer the technologyinstalled here is in compliance with the mostrecent international environmental standards.

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OECD environmental guidelines

The OECD environmental guidingprinciples stipulate principally thattransactions in excess of an ordervalue of 15 million EUR and withpayment terms involving a creditperiod longer than two years mustbe subject to a preliminary screen-ing process. In 2004, this was thecase with a total of 123 transactions(2003: 152) with an order volume of12.7 billion EUR (2003: 10.9 billion).Of the transactions which under-went preliminary screening, 47 pro-jects (2003: 68) with an order vol-ume of 6.9 billion EUR (2003: 4.8billion EUR) were assigned to cate-gories A and B due to their particu-lar environmental relevance. Thesethen went through the in-depthscreening process under the OECDguiding principles.

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Environmental aspects

Since 1st January 2004 the consideration of envi-ronmental aspects by ECAs when granting cov-er has been regulated by the “Recommendationon Common Approaches on Environment andOfficially Supported Export Credits” agreed atOECD level. For the first time all OECD membercountries have agreed on harmonized audit pro-

cedures in the shape of the OECD guiding prin-ciples. These basic guidelines are intended toensure that the state export credit agencies auditthe environmental impacts of projects responsi-bly and take account of them in the decision togrant cover. National environmental audit proce-dures were adapted accordingly. The mainchanges for Germany compared with the previ-ous situation have been in the categorization ofprojects (with consequences resulting for the in-depth examination of transactions as to theirenvironmental impact), as well as for the publica-tion of environmentally sensitive information inthe case of category A projects. The Germangovernment has applied the OECD environmen-tal guiding principles (see P. 98) strictly anddirectly in its decisions to grant export creditguarantees since they came into force.

Transparency

The publication of information on individual pro-jects has been further expanded. Since January2004, information on projects which are the sub-ject of an application for Hermes cover has beenavailable on www.agaportal under three differentheadings. In addition to a list containing all cov-ered transactions with a volume exceeding 15million EUR, a new heading “Individual Projects”gives details of particularly interesting foreignprojects in close cooperation with each exporter.These texts contain background information onthe project, e.g. its significance both for the buy-er country and for Germany as an exportingcountry.

On top of this, environmental information accord-ing to the OECD environmental guidelines is pub-lished on all Category A projects at the latest 30days before the final decision on cover is to betaken. The range of information about specificprojects is thus greater than ever before.

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Customer satisfaction study

As part of our efforts to implement a qualityassurance programme for the Hermes guaran-tees, we carried out a customer satisfactionstudy in late summer of 2004. A well-known mar-ket research agencypolled a representa-tive sample of allexporters and bankswho use Hermesguarantees; care wastaken to ensure thatthe entire spectrum ofpolicyholders – fromlarge corporations tosmall and mediumcompanies – wascovered.

The enterprises polledreturned a positiveassessment of boththe service quality andservice friendliness of the consortium membersand also evaluated the export credit guaranteesthemselves positively. It is particularly gratifying tosee that the assessment did not depend on thesize of the company polled. This clearly showsthat the export credit guarantees are also anattractive and easy-to-use option for SMEs insecuring their business. In the opinion ofexporters and banks, the Hermes guaranteeshave in general become much more transparentand more customer-friendly.

66 % of the companies polled reported that theycould not have transacted certain export busi-ness at all without Hermes guarantees, thus con-firming the unchanged importance of exportcredit guarantees for the economy and conse-quently also their value in safeguarding jobs. 84 % of the exporters polled reported that the

Showing the flag at trade fairs is akey factor in seeking activecommunication with the customer.This is why the Federal Governmentexport credit guarantees wererepresented at the Hanover tradefair and export21, among others.

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The passenger ferry “Labobar”, built at the Meyer Werft inPapenburg as the 23rd ship of a series, was handed over to theIndonesian Directorate General of Sea Communication in June

2004. Very similar to her sister ships in appearance, she canaccommodate 3084 economy class passengers due to changes

and developments in the subdivision of the passenger space.The cooperation between the Meyer Werft and Indonesia has

major significance for development aid programmes.

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products on offer were exactly suited to theirinsurance needs. Of those polled who had expe-rience with export credit insurers in other coun-tries, 93 % assessed the Hermes guarantees asbeing equally good or better. This shows that thecover instruments can very well stand up to inter-national comparison.

For banks, the Hermes guarantees play an espe-cially significant role, since they are often onlyprepared to finance export transactions if Feder-al Government cover has been granted. Thebanks mentioned the “zero weighting” of theexport credit guarantees as a particular advan-tage, i.e. that fact that they do not need to becovered by the bank’s own equity, as well as thelong credit horizons of the guarantees andprompt indemnification.

One piece of evidence for the high level of satis-faction with the export credit guarantees is thestrong willingness of the companies polled torecommend the Hermes guarantees to others –

86 % would do this, and a large proportion ofthese had in fact done so, especially within thepast year. 61 % of those polled expressed theopinion that the export credit guarantees wereinsufficiently well known and therefore in theirview were not used by many small and medium-sized enterprises.

The companies polled expressed the wish thatthe application procedure could be speeded upand the processes entailed in obtaining Hermesguarantees and getting claims paid could beleaner. The results of the poll are valuable indica-tors as to how we can improve the products ofthe export credit guarantee scheme.

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Siemens AG delivered a large part of thetechnology necessary for the expansion ofa country-wide GSM mobile telephonynetwork in Tunisia. Basis and switchingstations, directive radio masts as well as amonitoring centre and the centre for deal-ing with technical faults were erected andconnected by software links via networkand communications technology. Thecomprehensive package will contribute toreaching the prescribed target of 99.9 %network coverage by the end of May

2005. The project financing scheme under a Hermes guar-antee was realized with the involvement of Siemens Finan-cial Services and together with a banking consortium underthe leadership of HVB Corporates and Markets, StandardBank, Arab Banking Corporation and KfW IPEX Bank asHermes agent in the form of a multi-sourcing project.

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Special forms of cover

Project financing and structuredfinance

In 2004, too, there continued to be strongdemand for export credit guarantees for projectfinancing and structured finance business. Thesefinancing instruments were predominantly usedfor projects involving manufacturing plant and inthe telecommunications sector. Thus it againproved possible to realize large-volume projectswithout conventional cover being available. Inprojects of this type, the bank develops a financ-ing scheme based on the specifics of the individ-ual case and the financial strength of the foreigndebtor.

The Interministerial Committee assumed coverfor six project financing transactions with a totalorder value of some 374 million EUR in 2004.Particularly deserving of mention here are a tollmotorway in Croatia, this being the first time thatthe Federal Government has granted an exportcredit guarantee for a road-building project on the basis ofa project financing construc-tion. Other projects coveredwere a telecommunicationsnetwork in Tunisia, a gas and

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A toll motorway for Croatia

In Croatia, the Federal Governmentis supporting the rehabilitation andexpansion of a 59 km long stretchof motorway running from Zagreb toMacelj by means of a combinedexport credit and tied finance creditguarantee as well as a direct invest-ment guarantee in respect of a qua-si-participation loan. This highlysuccessful interplay of two coverinstruments was a significant factorin securing financing from an inter-national consortium of banks led bythe Hypovereinsbank and HSHNordbank.

The new stretch of road will carryforward the development of Croat-ian transport infrastructure. Follow-ing the renewal of the domesticmotorway links between Zagreb andthe Adriatic ports, this now marksthe rehabilitation and expansion ofthe routes to neighbouring countriesfor cross-border traffic. Croatia, as aEuropean transit country and an EU

candidate in waiting, is thus fulfillingthe EU Commission’s plans for thedevelopment of the European long-distance road system.

Due to the tight budgetary situation,the Croatian government is relyingmore and more on private-sectorfinancing for transport projectsbased on revenues from the collec-tion of motorway tolls (BOT mod-els). For this reason the decisionwas taken in 2003 to realize thedevelopment of the motorwaystretch between Zagreb and Maceljon the northern border with Slove-nia, which had been in the planningstage for severalyears, with the help ofa project financingscheme.

This infrastructureproject was struc-tured on the basis ofa public-private part-

nership, in which private investorsparticipate on the basis of theexpected revenues from tollscollected, but the state simultane-ously assumes responsibility for awhole range of obligations. Thesuccessful bid for the financingconcession, construction and oper-ation of the projects over a 28-yearperiod came from Autocesta ZagrebMacelj d.o.o. The road will be con-structed by the Munich-basedDYWIDAG International GmbH inconjunction with Strabag Interna-tional GmbH in Cologne. The con-tractors also hold a 51 % stake inthe project company.


steam-driven power plant in Turkey, a miningproject in Argentina, deliveries by subcontractorsfor the BTC pipeline which runs through Azerbai-jan, Georgia and Turkey, and the re-equipment ofa power plant in Pakistan.

In the year under review the Federal Governmentgave offers of cover for two further projects to thetune of some 273 million EUR. These are thedevelopment of a titanium mine in Mozambiqueand the construction of a methanol plant inOman.

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Business under structured finance schemesreached a record level in the year just ended. TheInterministerial Committee assumed cover forfour projects with an aggregate volume of some924 million EUR. The already good result in 2003– 571 million EUR – was thus exceeded by aconsiderable margin. The projects came from theoil and gas sectors, petrochemicals, steel con-struction and telecommunications. There werealso five offers of cover given with a value ofsome 191 million EUR.

As in previous years, the lion’s share of the trans-actions realized went to Iran. In the medium term,these projects will help to strengthen the coun-try’s hard currency position, since the exportcapacity of the country – especially in the petro-chemical sector – is expanded in this way. On

top of this, projects in the steel sec-tor will enable the country to pro-duce an increasing proportion of itsown needs, thus saving hard cur-rency.

For the first time, a project for Iranwas implemented together with theNational Iranian Oil Company(NIOC). This involves granting aguarantee for the natural gas drillingand processing complex SouthPars 9 & 10, which is being handledas a multi-sourcing project under astructured financing construction.

As part of efforts being made to restructure pay-ments, a project in the paper-making industry inIndonesia was successfully completed. In addi-tion, substantial progress was made on an ironore direct reduction plant in Venezuela.

The construction consortium consisting ofDYWIDAG International GmbH and Strabag International GmbH took over theexpansion and rehabilitation of the motorwaylinking Zagreb and Macelj in Croatia.

The project is structured as a public privatepartnership and will be financed through the tollrevenues generated later. Croatia regards thestretch of road as an important section of thedomestic transport network which will help topromote tourism and encourage the furtherlocation of private sector companies in the region.

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South Pars, Iran

The South Pars Gas Field is locatedon the Persian Gulf on the Iranian-Qatari border some 100 km fromthe Iranian coast. Something like8 % of so far proven world naturalgas resources are located in thisfield.

The National Iranian Oil Company(NIOC) has drawn up a strategicdevelopment plan for the exploita-tion of the gas reserves in the SouthPars Field. Investment “phases 9 &10” will be realized with the help ofa structured financing schemeinvolving a number of credit insur-ers. Besides Euler Hermes, Atradius(Netherlands), ECGD (UK), K-Exim(South Korea) and Sace (Italy) areparticipants. The total investmentvolume of the planned natural gasdrilling and processing complex issome 2 billion US dollars. DeutscheBank AG, Frankfurt, is the leadarranger and agent of the financingscheme. The foreign debtor for thefinancing loan is NIOC.

The overall volume of material andservices to be delivered under theproject includes onshore and off-shore facilities. MAN FerrostaalIndustrieanlagen, Geisenheim andSalzgitter International, Düsseldorf,are responsible as so-called“exporters of record” for the Ger-man share totalling some 373 mil-lion US dollars.

The repayment of the finance creditis secured at the beginning of theproject by the proceeds from thesale of heavy fuel oil. Following thecommissioning of the processingplant, proceeds will be forthcomingfrom the sale of stabilized gas con-densate and liquefied petroleumgas (LPG) as “security goods”.

The requirements for this securityplan were worked out in close con-sultation with the other participatingECAs and were the subject of inten-sive discussions with the foreigndebtor and the lead arranger for thefinancing.

The ECAs involved in the financingcommissioned an environmentalexpertise to evaluate possible envi-ronmental impacts of the project,which – in accordance with theOECD environmental guidelines –contained a large number ofrequirements to be applied in imple-menting the project. The influencewhich the export credit insurers canbring to bear was utilized in order toimprove the project without anydetrimental effects for the exporter.Thus the project company declaredits readiness to install an effectivetechnological solution for sulphurrecovery. The waste water disposalsystem, too, is intended to be mod-ified and better adapted to localconditions.

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The first structured finance transaction in India(order volume 85.8 million EUR) was also real-ized. By integrating new pre-stages into an exist-ing steel rolling mill, the production depth of theforeign buyer will be substantially increased. Thiswill strengthen the company’s competitiveness,since in future far less in the way of preliminaryproducts will need to be procured from foreignsuppliers at world market prices.

This year, too, strong demand for structuredfinance is on the cards. For example, severalconcrete enquiries for major projects in EasternEurope in the petrochemical, paper and steelsectors are currently under consideration. Theirchance of being realized dependsto a not inconsiderable degree onthe commitment of the responsibleauthorities in the country concernedas well as the development of eco-nomically viable financing schemestailored precisely to the needs ofthe project.

Aircraft business

A noticeable improvement in themarket environment contributed toincreased demand for aircraft. ThusAirbus S.A.S., not least thanks tosupport from state export creditinsurers, was able to deliver amarkedly higher number of aircraftduring 2004 than in previous years(2004: 320; 2003: 305; 2002: 303)thus defending its position as market leaderagainst Boeing.

A total of 68 aircraft (2003: 47 aircraft) was cov-ered together with the ECAs involved in Airbusfinance in the UK (ECGD) and France (COFACE).The Federal Government assumed export creditguarantees here for aircraft to the tune of some

1.2 billion EUR (2003: 755.6 million EUR) exclu-sively in respect of the German share of manu-facture. As in the previous year, the main thrust ofcover was aircraft belonging to the A320 family,but Airbus guarantees were also given for more

Airbus uses one of largest pressure tanks(autoclaves) in the world for thehardening of complex components.

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Debt restructuring of the Brazilian airline TAM Linhas Aereas S.A., Sao Paulo, successfully completed

share covered by the Federal Gov-ernment is 66.2 million US dollars)while 26.1 million US dollars are inrespect of commercial loans.

The regulation envisages principallyprolonging the credit term by threeyears, from 12 to 15 years. It con-tains the offer by Airbus S.A.S. andIAE International Aero Engines AGto commute the loans under certainconditions from the 13th year undera refinancing commitment. TheFederal Government was able, inconsultation with ECGD andCOFACE, to agree to this since themanagement of TAM had returnedthe airline to black figures followinga successfully completed cost re-duction programme, a reorganiza-tion of the aircraft fleet and the con-clusion of a code-sharing agree-ment with the state airline VARIG.These measures should guaranteethe long-term recovery of the airline.

On 23.12.2004 an agreement wassigned which regulated the restruc-turing of the debt of the Brazilianairline TAM Linhas Aeras S.A. Thefinal drawing up of the completedocumentation is expected for Mayof this year. The airline had falleninto arrears with its payments inMarch 2003. After almost two yearsof difficult negotiations, the creditorgroup comprising several interna-tional banks and the Airbus creditinsurers and the airline laid downthe new schedule of repaymentobligations in a term sheet coveringdebt of 211.1 million US dollars.This is in respect of receivablesaccruing from 1999 to 2001 for thefinancing of four A 319-100 and fourA 320-200 aircraft. 185 million USdollars of this sum are accountedfor by the ECA-insured finance (the

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The Federal Governmentgranted cover for 68 aircraft

under the Airbus financingprogramme in the year under

review.

37

than 20 aircraft (2003: 10) of theA330-/ A340 families. The regionalemphasis lay mainly in the Middleand Far East with 27 aircraft; deliv-eries to European and African air-lines were also secured by meansof Airbus guarantees, however.

No new claims were submitted in 2004, and thethreatening bankruptcy of Air Canada was suc-cessfully averted by means of a restructuringplan. No indemnification had to be paid in thiscase. The airline had suspended payments on1st April 2003 and was under protection from itscreditors up to 30th September 2004. Thesecured German portion of the debt is some 280million US dollars in respect of 27 Airbus aircraft.The restructuring plan reduces the burden ofleasing rates to a level which is sustainable for AirCanada without waiving the right to receive pay-ment. The aircraft continue to be operated by AirCanada.

In the marketing of aircraft held as salvage fromclaims, much better conditions than in previousyears were negotiable due to the recovery of theaircraft market – especially as regards leasingrates. It was also possible to sell four aircraft. TheECAs were forced, however, to reclaim seven air-craft at the end of the year from the Italian airlineVolare. Renewed efforts are currently being madeto market these.

International cooperation in air-craft business

The close cooperation between the three creditinsurers was further intensified during the yearunder review in order to move ever closer to thelong-term goal of acting as a single “virtual Air-bus credit insurer”. The starting point for suchstrengthened cooperation was the introductionof the 100 % guarantee (the so-called Airbusguarantee) on the German side in 2003. Sincethen the three credit insurers have offered a com-mon form of cover. The next step, at first togeth-er with COFACE, will be to advance considera-tions on harmonizing the documentation andcredit proposals to be presented to the commit-tees which make the decision.

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Shipping business

The gratifying development in the shipping sectorwas continued in 2004. The Interministerial Com-mittee gave final cover for three transactions inall, with a total order value of 770 million EUR.The main thrust in this business was once againthe construction of cruise liners. Agreement wasreached here on the financing for two cruise lin-ers to be built at the Jos. L. Meyer Werft inPapenburg for the Norwegian Cruise Line.

The good order situation for container ships, too,continued unchanged. The Committee made afinal decision to grant cover to the HegemannGroup for the building of two 1200 TEU contain-er ships for 43 million EUR for a shipping line in

Dubai. The shipping line sub-mitted a follow-on applicationfor another four 1400 TEU con-tainer ships for 102 millionEUR, for which the Committeegave an indication of cover inprinciple.

All shipping projects weredesigned as structured financ-ing schemes. Not least due tothe favourable economic out-look, it proved possible toassume cover in one case onthe basis of corporate risk (thecreditworthiness of the buyer).

“Pride of America”

The cruise liner “Pride of America”,which was seriously damaged in agale during the night of 14th January2004 in Bremerhaven, was repairedand construction work continued.The ship is intended for delivery inmid-2005. After the successfulcompletion of negotiations betweenthe banks, the insurers and theshipowner, the Hermes guaranteealready given for this ship was mod-ified, prolonging the credit periodand including cover for supplemen-tary financing costs, thus making animportant contribution to strength-ening the viability of the new financ-ing scheme.

The luxury liner “Pride of America”, at present being fitted out in theBremerhaven Lloyd Werft, will behanded over to the owner, theAmerican shipping line NCL, in June.

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In addition to these transactions, the IMC gaveindications of cover for a further two AIDA cruiseliners to the aggregate value of 700 million EUR.This is the first time that the Meyer Werft, with thehelp of the Federal Government export credit,succeeded in realizing an order to build ships forthe world leader among cruise shipping groups,AIDA Cruises, which belongs to the Carnival Cor-poration.

Additional applications received and enquiriesconcerning cover for cruise liners give every rea-son to regard the future positively and underlinethe leading position held by German shipyards incruise liner construction. The export credit guar-antees thus make a direct contribution to safe-guarding jobs here.

Country cover policy

A central aspect of the work of the Interminister-ial Committee is setting cover policy in accor-dance with the risks actually present in the vari-ous buyer countries. This forms the basis for theindividual decisions to grant Hermes guarantees.The precondition for assuming an export creditguarantee is that the transaction in question hasbeen judged to be eligible for cover and the riskjustifiable. When deciding country cover policythe Committee makes a distinction between cov-er for short-term and extended-term business.

Experience shows that short-term cover withcredit periods up to one year is virtually exemptfrom restrictions. It is precisely in short-term busi-ness that the Federal Government demonstratesits willingness to maintain cover for a country tothe greatest extent possible when payment diffi-culties are experienced, since here there is a rel-atively good chance of successful intervention. Inthis way it can help to enable buyers in crisis-rid-den states to continue importing at least a limit-ed quantity of crucial goods. The practice of theInterministerial Committee is to uphold the coveroptions wherever possible for private buyers withsufficient creditworthiness in short-term com-mercial business even when unregulated olddebt is still outstanding against the country con-cerned (e.g. Argentina). How differentiated thecover options can be depends on the require-ments for security instruments. It is only in rela-tively few countries which pose a particularly highrisk or have unregulated overdues that the facili-ties for short-term cover are also suspended.

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Risk mitigation measures are mostly taken by theIMC for extended-term cover, in as far as thereis no possibility of unrestricted open country pol-icy due to specific country risks. Measures tomitigate risk are the setting of a country coverceiling with a maximum credit limit and the stipu-lation of a reference limit, as well as requiringsecurity instruments where appropriate. Whenthe IMC puts a country ceiling inplace, this allows cover for medi-um-term business in the country inquestion to be granted up to themaximum limit. When it becomesclear that the ceiling will be exceed-ed, the IMC examines the possibili-ty of setting a further ceiling or con-siders whether other cover optionswould be possible or necessary. Inorder to enable a large number ofexporters and banks to use thecover limits in equal proportions,reference limits for individual trans-actions are set, which can howeverbe exceeded if there are sufficientgrounds for doing so. There is alsothe option, despite the limited avail-ability of cover, to grant guaranteesin the case of special eligibility forcover to small-scale projects whichpromise to earn the country hardcurrency. As a rule, there is also achance to obtain cover outside theceilings in the form of project fi-nancing or structured finance cover.

CIS countries, Central and East-ern European countries andSouth Eastern Europe

The increasing economic consolidation in theregion has enabled the IMC to further open cov-er policy and to relax existing restrictions. Thepositive effects deriving from the sustained high

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A consortium led by VAI Fuchs GmbH inWillstatt erected a modern steelworks in theRussian city of Revda. The electric arc furnaceand the air separation plant delivered by thecompany will enable the economical andenvironmentally friendly production of a milliontonnes of steel every year.

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level of oil prices have strengthened theeconomies of many CIS countries and led to arise in the volume of cover for the Central andEastern European countries of some 25 % to 3.5billion EUR. Developments were dominated inthe European region by the progressive integra-tion into the EU as a result of its expansion andby the prospects of accession opened up for fur-ther countries. The development of bilateral traderelations received effective support through theincreased availability of Hermes guarantees. Thecovered exports to the countries of South-EastEurope also went up by 25 % to reach 2.1 billionEUR.

CIS countries

Many of the CIS countries profited from thefavourable development in international oil andgas prices. Russia and the states bordering theCaspian Sea, in particular, reaped the benefits ofthis, generating extremely robust economicgrowth. In political terms significant changes tookplace, especially in Georgia at the beginning of2004 and the Ukraine at the end of the year.

Russia is traditionally the most important marketin the region. New cover with a volume of 1,420million EUR was assumed here. This represents arise of almost 80 % compared with the previousyear’s figure, 799 million EUR. In this, the fourthmost important market for the Hermes guaran-tees in terms of new cover, besides a substantialincrease in short-term guarantees, turnover inthe predominant segment, medium-term busi-ness, more than doubled. And this against thebackground that cover was given almost exclu-sively on the basis of guarantees from Russianbanks and of corporate risk, i.e. based on acreditworthiness check of the Russian buyer’sduly audited annual financial accounts. Alongsidethe generally recognized Vneshtorgbank andSberbank (both of them currently recognized upto 200 million EUR) more than 40 banks aremeanwhile accepted as guarantors on a case-by-case basis. State guarantees are only forth-coming in a very limited number of special cases.

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Even though the “crisis of confidence” in thebanking sector in the summer of 2004, whenseveral banks closed down, and doubts whichsurfaced occasionally as to the legality of thesolution found for the crisis of the Yukos Groupgenerated uncertainty in the markets, a continu-ing development of bilateral trade relations at ahigh level remains on the cards. Active measuresundertaken by the Russian side, e.g. as regards

the regulations for a depositinsurance fund, can work effec-tively to support this develop-ment. The insights gained du-ring the visit by an IMC delega-tion in November – particularlyinto developments in the bank-ing sector – largely confirm thepositive way in which things aremoving. All in all, this continuesto be reflected in the positivedecisions given on cover. Thisdevelopment is underpinned by

the fact that since 2003, with the removal of thecountry ceiling, a largely open cover policy hasbeen in operation.

Kazakhstan once again benefited from the sus-tained surge in economic growth. Growthunchanged at around 9 % over several years,budget surpluses and increasing levels of hardcurrency reserves are indicators of this develop-ment. The volume of cover given went down

slightly from 89.5 million EUR (2003) to 70.9 mil-lion EUR (2004), but still remained above the2002 figure. Following the almost complete uti-lization of the country ceiling previously set at200 million EUR, the Committee set a new ceilingnot linked to any one year of 300 million EURwith a reference limit of 30 million EUR. At thesame time the IMC removed the special regula-tions in force since 1992 on local costs andforeign content. The positive development of thecountry led to further improvements in countryrisk classification and its assignment to Cate-gory 4.

Business with Uzbekistan posted growth of 65 % to 117.5 million EUR. The prevailing form ofcover here was on medium-term credit periodsand included textile machinery and infrastructureequipment. This enabled a return to the high fig-ures achieved during 2001 and 2002. The coun-try’s economy grew at a relatively low rate com-pared with others in the region. This indicates,among other factors, the gap which still needs tobe closed in terms of integration into the globaleconomy. Due to the excellent payment experi-ence since the independence of Uzbekistan, anew ceiling was put in place for business oncredit terms of 150 million EUR again. While inthe past only the National Bank for Foreign Eco-nomic Activities of the Republic of Uzbekistan(NBU) was accepted up to an exposure limit of50 million EUR, the Committee granted generalrecognition in the early part of the year to a sec-ond bank, Asaka Bank, for an aggregate expo-sure of 75 million EUR.

AzerbaijanKazakhstanUkraineUzbekistanBelarus

20030015015075

Country ceilings in millions EUR

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The previous year’s good result was repeated inbusiness with the Ukraine, reaching a volume of147.7 million EUR. Short-term business account-ed for the lion’s share of this, more than 100 mil-lion EUR. A surge in growth of more than 12 %gave vigorous impetus to the country’s economy.Although it is hardly to be expected that this lev-el can be repeated in 2005, the democraticchange in the government of the Ukraine doeshold out the prospect of new impulses. A signifi-cant role will be played here by the increasinglyclose links to the EU, with which there has been

a common border since May 2004, but also theongoing consolidation of relations with the CIScountries.

The threshold of 100 million EUR in new cover forBelarus was exceeded for the first time. Anincrease in business of almost 40 % led to a fig-ure of 111.4 million EUR, with medium-termguarantees slightly dominant over those onshort-term payment conditions. An increasingtrend towards security from Belarussian com-mercial banks is observable here. State guaran-tees are only given sporadically for transactions.After the previous country ceiling for business oncredit terms had been almost entirely utilized, theIMC set another cover ceiling unconnected to theyear at an unchanged level of 75 million EUR witha reference limit of 5 million EUR.

Heye International GmbH in Oberkirchen delivered the completeengineering package for the manufacture of high-quality glassvessels as well as the machinery and equipment for a productionfacility for glass to Uzbekistan. Numerous small and medium-sized companies were involved in the project as subcontractors.

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The Moldavian Republic remains off cover inview of the persistently problematic overall stateof the country’s economy and because of theunregulated relations to the IMF and the ParisClub. Nevertheless the IMC has permitted thecautious reopening of cover for private sectorbusiness on short payment terms.

Demand for cover for Azerbaijan, despite suffi-cient cover being on offer, is low, in contrast tothe dynamic economic growth of the country,which is primarily concentrated in the crude oiland gas sector.

TECHNIP Germany GmbH built a diesel desulphurizationplant with an annual capacity of 1.5 million tons in

Turkmenbashi in Turkmenistan. The diesel fuel producedthere already complies with the European sulphur content

standards for 2009. Thanks to cutting edge technology,sulphur emissions from the plant have been substantially

reduced and lie below World Bank permitted levels.

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Central and Eastern European countries

Developments in the Central and Eastern Euro-pean countries were dominated by the accessionto the EU of Estonia, Latvia, Lithuania, Poland,the Slovak Republic, Slovenia, the Czech Repub-lic, Hungary, Malta and Cyprus. The prospect ofjoining the eurozone gives additional impulses,especially since some of these states (Cyprus,Estonia, Latvia, Lithuania, Malta, Slovenia) havealready become members of the Europeanexchange rate mechanism (ERM II).

Poland with 575.9 million EUR, the CzechRepublic with 338.0 million EUR, Hungary with172 million EUR and Slovenia with 162.4 millionEUR were among the 30 countries with the high-est volume of cover in 2004. Business on shortpayment terms was far and away the predomi-nant form of cover in these countries. Since theircategorization as marketable risks, the FederalRepublic decided to stop giving short-term cov-er on principle for the EU accession countrieswith effect from 01.01.2005 - with the exceptionof wholeturnover light policies. A significantreduction in business volume is thus to beexpected for coming years in this segment (seeP. 32).

The macroeconomic progress due to joining theEU led to the reclassification of selected acces-sion countries into better premium categories.Thus Estonia, Latvia, Lithuania, Malta and theSlovak Republic were each upgraded from Cat-egory 3 to Category 2 at the beginning of 2005.

South Eastern Europe

In South Eastern Europe, attention was focussedparticularly on Bulgaria, Romania and Croatia in2004. The accession to the EU which is inprospect at the earliest for 2007 revived eco-nomic activity and further stimulated the imple-mentation of necessary structural reforms. Theassessment that Bulgaria has a functioning mar-ket economy was confirmed by the EU, whichalso made a similar statement concerning Roma-nia for the first time. Croatia was admitted to thestatus of EU candidate in June. The start ofnegotiations with the goal of joining in 2007 orig-inally planned for early 2005 were, however,postponed. There continue to be intensive EUcontacts with many other countries in the regionwithin the framework of already existing orplanned stability pacts and association treaties.

Romania, with a volume of newly assumed cov-er of 432.3 million EUR, moved up to 15th posi-tion of all countries. This represents more than adoubling of volume year-on-year, since a numberof major projects on medium-term payment con-ditions, e.g. in the infrastructure sector, were tak-en under cover. The overall improvement in theeconomic situation of the country was reflectedin its upgrading to Category 4 in January. TheCommittee resolved in August to abolish thecountry ceiling and the reference limits which hadbeen introduced to limit risks. This means that anopen cover policy is now operated almost acrossthe board, but major transactions, project financ-ing schemes and other structured finance con-structions will still be decided after careful scruti-ny on a case-by-case basis in order to take fullaccount of the specific details of the transaction.

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As expected, the previous year’s level of busi-ness in Bulgaria, which was influenced by a sin-gle transaction of 250 million EUR, was notreached. Business with a volume of 76.0 millionEUR was covered in 2004, with short-term guar-antees definitely in the majority. The IMC upgrad-ed the premium classification to Category 4 andremoved the restrictions on country coverthrough a ceiling or a reference limit. Cover isthus available on an open cover basis for almostall transactions.

Turkey continued to successfully pursue itscourse towards economic consolidation, thusmaking progress in overcoming the crisis of2000/2001. An important factor here was thesustained support from the international commu-nity, and in particular the additional funds madeavailable by the IMF. At the political level, specialimportance attaches to the decision by the EU tobegin talks on future Turkish membership. It is tobe expected that this will generate further stimulifor the process of structural reform.

The volume of guarantees assumed for newbusiness continued to rise, going up by 30 %year-on-year to 1,515 million EUR. This makesthe country the third most important market afterChina and Iran. This development was facilitatedby the decision of the IMC in February 2004 to liftthose restrictions on granting cover which stillexisted. This means that, with the exception ofthe security requirements for public buyers, anopen cover policy operates. There has tradition-ally always been a high proportion of coveredbusiness on short payment terms. In medium-

term business the trend towards an expandingmix of sectors continued. Besides a multitude ofsmall textile machines, major transactions in theenergy sector, the building materials industry, ply-wood manufacture and the steel industry playedan important role.

Africa

Although the economic fundamentals on theAfrican continent with overall growth of not quite4 % year-on-year have not appreciably im-proved, the volume of cover for this region wentup by some 55 %. All in all, the Federal Govern-ment assumed guarantees to the value of some2 billion EUR for deliveries to African countries.

The largest portion of this, as in the past, wasaccounted for by the Maghreb states (about 64 %) and the Republic of South Africa (some 24 %). This result is symbolic of the strong polit-ical and economic ties of the two regions to theEuropean area, and in particular it clearly indi-cates the stabilizing effect exerted by theBarcelona Process begun in 1985 as part of theEU Partnership for the North African countries,as well as pointing up the strategic significance of

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Hermes guarantees were used by Otto WolffHandelsgesellschaft, Düsseldorf, for the exportof 150 truck chassis to Algeria. After beingassembled at their destination, the completedtrucks will be put into service as cementmixer/transporters, tankers, buses and flatbedtrucks for carrying pallets.

Export credit guarantees for Egypt, 775 millionEUR after 230 million EUR in 2003, reached thehighest volume of any African country. Thisplaced them sixth in the list of the countries withthe highest cover volume. The rise is due tolarge-scale individual investments, three projects

for the manufacture of fertilizeralone bringing an aggregate volumeof some 600 million EUR. Deliveriesfor the energy sector, Airbus aircraftand medicinal equipment were alsosecured by means of export creditguarantees.

The Federal Government similarlymade a contribution to the suc-cessful financing of German exportprojects in other states of theMaghreb by granting cover. Pro-jects were insured for Algeria,Morocco and Tunisia in the energysector, water/waste water, steel,telecommunications and in the agri-cultural sector for some half a billioneuros. Particularly deserving of

mention is the rise in cover for Algeria; newlygiven guarantees went up – mainly due to theinstallation of a mobile phone network – by some250 % to 257 million EUR.

trade relations. The Barcelona Process enshrinesa comprehensive scheme for cooperation be-tween the two sides of the Mediterranean on thebasis of equality of rights (“ownership”) for thecountries bordering the Mediterranean to theSouth and the North and East. The Federal Gov-ernment is therefore particularly concerned – inspite of the still not inconsiderable political andcommercial risks involved – to maintain enoughcapacity to cover demand for guarantees tothese regions.

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Against the backdrop of the political and eco-nomic opening of Libya, as well as of the agree-ment signed to regulate old debt and the conse-quent recovery of 125 million EUR, the FederalGovernment reopened new cover options for thecountry in August 2004 for the first time for 18years. There is, however, hardly any demand forguarantees on credit conditions at present.

With a cover volume of just under 500 millionEUR, the Republic of South Africa lies in 12th

place. These guarantees were first and foremostin respect of consumer durables, capital goodsfor manufacturing and the packaging industry aswell as for the expansion of a deep-water port ina less developed area in the South-West of thecountry. South Africa, which remains a stableeconomic centre for the region due to responsi-ble economic policies, has recently been radiat-ing strong growth impulses outwards into neigh-bouring countries such as Namibia, Mozam-bique, Botswana and also Angola and Mada-gascar by means of strong investment flows bySouth African enterprises in the energy, trans-

Rohde & Schwarz installed radio transmitters with aerials andsatellite induction equipment at 31 locations in Ghana. This established the ground-based infrastructure for a nation-wideradio and television network. Particular emphasis was placed onensuring that broadcasts can be received not only by people livingin cities, but also in the countryside.

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port, service, food and telecommunications sec-tors. Consequently there could be good busi-ness prospects ahead for German suppliers whowere involved in these projects.

Average growth of not quite 4 % was insufficientto close the development gap with other areas ofthe globe which exists in many cases in the Sub-Saharan Regions, rich though they are in naturalresources. Arbitrary decisions by state authori-ties, weak structures and uncertainty in all areasof daily and economic life stand in the way ofdevelopment there.

Besides some obvious regressive steps – as, e.g.in Côte d´Ivoire, which the Federal Governmentimmediately took off cover in November – therewere a few instances of positive development.Ghana, Mali, Kenya and Tanzania were upgrad-ed by the OECD country risk experts from premi-um Category 7 to Category 6 due to the eco-nomic progress they had made. The FederalGovernment made cover options available, too,for business on credit terms to private buyers inMali and Benin.

The conclusion andregular servicing ofan agreement on olddebt with Angola aswell as the state ofpeace now establish-ing itself in the countrycaused the FederalGovernment to opencover under a ceiling

of 100 million EUR for short and medium-termbusiness. This met with lively interest from Ger-man exporters, who made enquiries mostly con-cerning guarantees for the delivery of equipmentfor infrastructure rebuilding.

Latin America and the Caribbean

The general upturn in the economic fortunes ofthe Latin American and Caribbean countries con-tinued into 2004 and gained momentum. Eco-nomic growth was up in nearly all countries com-pared with the previous year. The downturn inindicators of indebtedness, too, was maintainedin the vast majority of countries. This positivedevelopment was primarily the result offavourable global influences, which enabled theregion to profit from high raw materials prices,low interest rates and the recovery in global eco-nomic activity. A huge increase in exports fromthe region led to a general stabilization of themacroeconomic situation. In the midst of thisupswing, newly granted cover for the Latin Amer-ican developing countries surged strongly afterseveral years of flagging demand. After 2.1 billionEUR in the preceding year, order values totalling2.5 billion EUR were covered in 2004. In con-trast, export credit guarantees for the Caribbeanwent down from 777.2 million EUR to 105.3 mil-lion EUR, following the non-recurring effects ofindividual major transactions in the previous year.

Angola 100

Country ceiling in millions EUR

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Economic growth in Argentina slowed againslightly in the second year following the econom-ic crisis, the process of macroeconomic stabi-lization is still ongoing, however. Public budgetspost positive balances, not least since no debtrepayment is taking place. Hard currencyreserves have substantially increased due topositive development in export trade, and theaverage rate of inflation has dropped further. Themost urgent problem still remains the restructur-ing of the high level of foreign debt which hadbeen foreseen for 2004, but had to be post-poned once more. In the most recent develop-ment, 76 % of the bond creditors accepted theArgentine government’s offer, which means a

loss for them of 70 % of the cash value of theirholdings. At present a question mark still hangsover the resumption of talks with the IMF on anew arrangement and the negotiation of anagreement with the Paris Club creditors.

In the autumn the Federal Government widenedthe scope of the cover options it had alreadyopened in summer of 2002 under restricted con-ditions for short-term business with private buy-ers. New applications for cover under a whole-turnover policy are now possible after a stringentcreditworthiness check on the buyer. The volumeof 194.1 million EUR covered in the year underreview almost regained the level of cover beforethe economic crisis broke. Due to the increasingimprovement in Argentina's economic growthcurve, the IMC extended the cover available inMarch 2005 and put a country ceiling of 100 mil-lion EUR in place for medium- and long-termbusiness with private sector customers. At thesame time it set a reference limit of 10 millionEUR per individual transaction.

The steadily rising demand for high-quality foils in Brazil generateda further export transaction for Brückner Maschinenbau GmbH in

Siegsdorf. Polo Indústria e Comércio, one of the leadingmanufacturers of foils in Latin America, took delivery of a plant for

the production of biaxially stretched foils. The extremely thin buthigh-strength foils are primarily used in the food industry. Not onlyis their manufacture very environmentally friendly, but their overall

environmental performance evaluation is very attractive.

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One of Chile’s largest news-paper publishers invested infacilities supplied by theEssen-based companyIntergrafica Print & PackGmbH. From the heat set-ting roller offset newspaperprinting presses up to acomplete despatch area,the plant includes all theelements necessary toproduce simultaneously a48-page newspaper andcolour supplements.

On top of this, the customertook delivery of a sheet-fedoffset press for printinghigh-quality brochures andsimilar material. Companiesfrom the new federal statesaccounted for a substantialproportion of the compo-nents subcontracted out forthis order.

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Brazil registered a strong economic upturn in2004, which generated the highest GDP growthrates since 1994.

Unrestricted cover for exports to Brazil is avail-able for business with a credit period of up to360 days, so that there is no change here. TheIMC lifted the ceiling with a cover limit of 250 mil-lion EUR for longer term business which had pre-viously existed in February 2005, and the countrywas upgraded at the same time to Country Cat-egory 5. After a decline in cover volume overrecent years, 2004 marked an increase again inguarantees for exports to Brazil, with 1.05 billionEUR. Brazil thus retains its position as the coun-try in the whole region with the highest cover andoccupies fifth place in the list of countries withthe highest cover volume.

Cover is available without any formal restrictionsfor exports to Chile, Costa Rica, Columbia,Mexico and Uruguay, while the Federal Govern-ment has extended the limited range of cover forbusiness with buyers in Nicaragua to bring itmore into line with demand from Germanexporters.

The existing country ceiling for exports to Cubaon short payment terms was raised to 15.0 mil-

lion EUR, while medi-um and long-termcredit business canbe covered under aceiling of 25 millionEUR. Columbia wasupgraded to premiumCategory 5 by theOECD country riskexperts.

ArgentinaCuba (2 ceilings)

10040


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The political events of 2004 in Venezuela result-ed in a consolidation of the government’s posi-tion. Following two years of recession, theVenezuelan economy moved into positive growthagain, influenced by the rising price of crude oil.The country risk evaluation by the OECD upgrad-ed Venezuela to Category 6. After a period inwhich only projects with a high priority were eligi-ble for cover after a case-by-case assessment,the improved economic situation and the relaxingof political tensions led to the cover options beingexpanded in November. Since then, cover forbusiness with a credit period of up to 360 days isavailable without formal restrictions, while trans-actions on longer payment terms may be insuredon a case-by-case basis with a reference limit of20 million EUR per transaction. Since the ex-change market controls remain in force, thegrace period and waiting period before register-ing a claim, which were extended to a uniformnine months, remain valid for the time being.

76 kilometres of wide-bore steel tubing for the constructionof a gas pipeline in Trinidad and Tobago were delivered by

EUROPIPE GmbH in Ratingen to the NATIONAL GASCOMPANY OF TRINIDAD AND TOBAGO. The pipeline willmake an important contribution to sustaining the country’s

economic upturn. The public buyer was particularly concerned to avoid negative environmental impacts.

Permanent monitoring and dedicated programs play animportant role here.

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Asia

The volume of cover for the Asian countries rosesteeply by 52 % to reach a total of 9.3 billion EURafter 6.1 billion EUR the year before. The EastAsian countries normally account for the majorpart of this, and here the volume of new guaran-tees jumped by more than 36 % to 4.5 billionEUR. China once again led the field of the coun-tries with the highest newly assumed cover (2.4billion EUR, up 80.8 % on 2003) and continuesto be the motor driving growth in the region.

Following strong growth of 6.9 % in the previousyear, the Asian economies, according to the esti-mate of the Asian Development Bank (ADB),reached the most robust economic growth sincethe outbreak of the Asian crisis of 1997, postinggrowth of 7.6 %. This makes them once againthe fastest-growing region worldwide. Evenbefore the great tsunami disaster, however, theADB had revised its forecast for 2005 down-wards from an initial 7.3 % to 6.5 %.

53

China is likely to remain an economic motor forglobal and Asian growth in 2005. Alongside this,domestic demand will be a factor of growingimportance in most Asian countries. Risk factorsfor growth in the region which should be men-tioned are the possibility of a “hard landing” forChina’s economy and the high oil price, as wellas the interest rate hike expected in the course ofthe year in America.

Voith Paper Fiber Systems in Ravensberg delivered a state-of-the-art plant for processing recovered paper to manufacture newsprint to China. It is one of the largest of its typein the world.

The task of a recovered paper processing plant is to producesuitable fibrous pulp which can be used to manufacture paper onthe paper machine without any hitches. The process includes theremoval of impurities such as glass, stones and metal, as well asgetting rid of other unwanted material such as printing ink,stickies, plastic film and styrofoam.

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The vast majority of export credit guarantees forChina is accounted for by projects for the con-struction and modernization of steelworks, aswell as plant and machinery for paper manufac-ture. A high proportion of the capital goods trans-actions were carried out on the basis of securityby letter of credit and on short payment terms forgoods delivered and services performed. Thisreflects the high level of liquidity in the Chinesemarket. The Federal Government is prepared, onprinciple, to insure capital goods business on thebasis of corporate risk, i.e. the creditworthinessof the buyer. The documentation necessary forthe credit check (annual financial statements as

well as credit reports from reputable sources) is,however, difficult to obtain in many cases. Theoption to accept further banks besides thosealready generally recognized as guarantors afteran appropriate examination similarly continues tobe available.

Thailand presents a positive picture with eco-nomic growth of just over 6 %. This is fuelledmostly by investment and domestic consumerdemand, as well as strong export growth. Thai-land has meanwhile overcome the Asian crisisand ranks alongside China and India as one ofthe most attractive goals for inwards investmentinto the region. For Thailand, there was anincrease of 14 % in comparison to 2003 to 130.9million EUR. Due to the overall economic devel-opment and the positive payment record, thecover restrictions for both the public and privatesectors decided on at the time were lifted at theend of 2004 and the open cover policy whichexisted previously was reinstated.

The growing market in China for polyester fibres for applications in textile manufacture was the starting point for an export orderwon by Frankfurter Zimmer AG. The contracted work included

designing a facility for the production of polyester staple fibre andthe delivery of the appropriate machinery and equipment,

installing it and commissioning the plant in the country. The project reinforces the technological position of Zimmer AG

in Asia and safeguards numerous jobs, including those in subcontracting firms.

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55

India, too, enjoyed an upturnencompassing virtually every sectorof the economy. Dynamic growth inmanufacturing industry is, togetherwith the service sector, rapidlybecoming the second pillar but-tressing overall economic develop-ment, while the agricultural sector,due to its great dependence on themonsoon cycle, has meanwhilebeen left far behind by the two sec-tors mentioned above. Even if thehigh growth level of 8 % in thefinancial year 2003/04 will not be equalled, highgrowth rates of over 6 % are forecasted. India isregarded as one of the countries which benefitedfrom the WTO quota regulations for textileexports which expired as of 1st January 2005.Compared to the previous year, cover for Indiarose markedly by 33 % to 450 million EUR. Forsmall transactions as well as major projects,

export credit guarantees were given here on thebasis of corporate risk (frequently with collateralsecurity).

The Oberhausen company MAN Turbo AG insured the export of an aircompressor line to India by means of a Hermes guarantee. The air compressorforms part of a chemical facility which can produce terephthalic acid as asource material for the manufacture of polyester. This investment has createdsome 1,100 new and extra jobs in the Haryana region about 150 km north-east of Delhi.

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In contrast, Indonesia has still not completelyrecovered from the Asian crisis. With economicgrowth of 5 % both last year and in the currentyear, Indonesia lies below the regional average.There are only two among the mass of potentialgrowth sectors, such as the automobile industry,which have managed to regain their previous lev-el. Since consumption is the main factor drivinggrowth in this year again, the government underthe new President intends to take steps to kick-

start economic growth. In view of the unchangedweakness of investment, the new governmentsees its priority task in combating investment dis-incentives such as a lack of legal certainties, cor-ruption, high taxes and bureaucracy, in order toimprove the overall business climate and attractinward investment. In comparison to the turnovergrowth in business to the other states of theregion detailed above, Indonesia posted adecline in cover assumed by almost 23 % to 337million EUR in the year under review.

The export credit guarantee scheme of the Fed-eral Republic of Germany operates an open cov-er policy for China, Malaysia and Thailand.Export credit guarantees are also available forSouth Korea on the basis of recent credit reportsafter close scrutiny of the economic viability ofthe project. No changes have been made in cov-er policy for Indonesia and the Philippines. Onecriterion for the risk assessment when decidingon cover is whether the transaction will generatehard currency earnings.

A HPH hood annealing plant comprising 20annealing bases and 11 heating and cooling hoods

was delivered to Taiwan by LOI Thermprocess GmbHin Essen. This large-volume order from the China

Steel Corporation was secured with a Hermes guar-antee. The facility is for annealing thin sheet, whereby

five of the units are equipped for high-temperatureannealing up to 850°C material temperature.

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Herborn GmbH has been in the business of recyclingdischarge lamps containing toxic substances since

1988. Constant enhancement of their methods led toa groundbreaking technology for the safe recycling of

lamps and the recovery of secondary raw materialsfree of toxic residues.

Know-how and technology made in Germany – recyclingfluorescent tubes in Korea

One of the few manufacturers of facilities for therecycling of fluorescent tubes in the world is Her-born GmbH, based in Ginsheim-Gustavsburg inthe Rhein-Main region. The company owes itsleading position within the industry above all to itscomprehensive know-how and to the develop-ment of its own patented recycling technology,which enables almost total re-utilization of thematerials. More than 95 % of the material in thelamps is recycled into high-quality secondary rawmaterials in the Herborn GmbH plants. This waswhat tipped the balance for the Korean customer,since Korean lamp producers have been legallyobliged since the beginning of 2004 to ensurethat fluorescent tubes are recycled.

Five different stationary plants for the recycling ofdifferent types of fluorescent tube as well as theassociated plants for distilling mercury wereshipped to Korea. This was the first time that themedium-sized company used a Hermes guaran-tee to insure an export transaction. It was thecompetent and comprehensive advice he re-ceived at the outset of the project which con-vinced managing director Thomas Herborn: “Forsmall businesses like ours the information you geton the country and the customer’s financialstrength are a vital precondition for the successof a project. The security of knowing that you areprotected if there is a payment default and thehigher liquidity it brings are further points in favourof taking a Hermes guarantee.”

Due to the tentatively positive development inAfghanistan and Cambodia, a cautious reopen-ing of cover for these countries was decided atthe end of the year under review after years of

being off cover, prima-rily for small-scalebusiness on shortpayment terms withprivate sector buyers.In the case of Pak-istan cover underproject finance andstructured financeschemes can beobtained outside the

country ceiling of 50 million EUR. Both Pakistan(Category 6) and South Korea (Category 1) wereupgraded in the year under review.

Pakistan 50

Country ceiling in millions EUR

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The Middle East

Economic growth in the countries of this regionwas above the global average in 2004, comingin at an average of just over 6.5 % comparedwith a worldwide figure of 5.1%. The volume ofexport credit guarantees almost doubled in com-parison to the previous year: after some 2.1 bil-lion EUR in 2003, cover to the tune of almost 4 billion EUR was assumed. The backdrop to thisis the continuing rise in oil revenues and a moreoptimistic perception of the stability of the region.

In this context the renewed efforts of various gov-ernments to diversify and carry through reforms –with the goal, among others, to reduce tradition-al dependency on natural resources – were acrucial crystallization point for these positivedevelopments; it has to be said, however, thatthis process is by no means equally distributedover all the countries of the region.

It is first and foremost in the smaller members ofthe Gulf Cooperation Council (GCC), countriessuch as Bahrain, the United Arab Emirates(UAE), Oman and Qatar, that these effortstowards closer integration into the global econo-my and to establish a liberalized economic andto a certain extent social system are mostadvanced.

The positive effects of interaction betweeneconomic and social liberalization – whichreaches down into every level of society – isapparent in the advanced countries, clearly visi-ble in relatively low unemployment figures and amarkedly lower risk assessment: Oman andQatar were upgraded by the OECD country riskexperts from Category 3 to Category 2 inNovember. The steep rise in private investmentflows, especially into Dubai (UAE), is a furtherindicator for this.

Besides the massive rise in export credit guaran-tees for Iran, cover volume for Bahrain, Qatarand Fujaira (UAE) as well as for Sharjah (UAE) atleast doubled compared with 2003. The type oftransaction covered for buyers in these countrieswere in the main capital goods for the construc-tion of water supply systems, machinery andspare parts as well as components for powerstations.

In countries such asSyria, Lebanon, Yemenand Jordan, however,economic and politicalprogress is proceeding ata snail’s pace. For thisreason the problemsassociated with very highunemployment andsometimes rather unsta-ble macroeconomic fun-

Syria 25


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59

damentals remain. Fundamentalist and anti-Western tendencies as well as the complexregional situation with its knot of intractable con-flicts at the same time increase the risks of busi-ness opportunities for German exporters, whichare in themselves quite good.

There has been a slight improvement in the eco-nomic climate in Jordan. This is why the countrywas upgraded in October 2004 from risk Cate-gory 6 to Category 5.

A facility for the production ofprocessed cheese products willplay a significant role in ensuringthe food supply of the SaudiArabian population. A number ofsmall and medium-sized enterprises under the lead man-agement of Stephan & MachineryGmbH & Co. in Hamelin areinvolved in the project as subcon-tractors. The facilities are at thecutting edge of process technolo-gy and also in environmentalsafety, and represent a benchmarkstandard for the Arabian market.

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Export credit guarantees for Saudi Arabia wentup slightly. With a rise of not quite 7 % on 2003,reaching 526 million EUR, Saudi Arabia wasNumber 10 among the countries with the highestcover. This was in respect of export projects inthe steel, cement and energy sectors as well asin consumer goods manufacturing. Virtually allthese transactions were covered on short pay-ment terms.

For Iraq, a major hurdle in the way of making newcover available was surmounted with the agree-ment reached in December 2004 in the ParisClub of creditor countries (see P. 82). Althoughthis has improved the preconditions for reopen-ing cover, no cover options are currently open forpure export credit risks due to the continuingstate of insecurity in the country. Germanexporters can obtain cover, however, to theextent that the envisaged transaction is compa-rable with the Oil for Food Programme, or in indi-vidual cases for pre-shipment cover. Supplierrisks in Iraq can be covered as soon as a letter ofcredit from a third country bank can be pro-duced. The Federal Government will continue tomonitor developments closely, so as to be ableto provide cover where appropriate.

Focus on: Iran

Federal Government export creditguarantees played a crucial role forGerman exports to Iran; the volumeof cover taken out on Iranian buyerswas up over the previous year by afactor of almost 3.5 to some 2.3 bil-lion EUR. The Federal Governmentthus insured something like 65 % oftotal German exports to the country.Iran lies second in the league ofcountries with the highest cover in2004, hot on the heels of China.

The country is enjoying a stableeconomic situation thanks to therevenues from exports of oil andgas, which generated growth ofsome 6 %. The Iranian governmentuses this situation to full effect:virtually the entire range of importscovered on credit terms as well as amajor part of the goods imported onshort payment terms are capital

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goods for the expansion of thecountry’s industrial infrastructure.

German exporters are collectivelyone of Iran’s largest trading part-ners, who benefit from the country’sefforts to expand and diversify withthe support of the Federal Govern-ment. For example, cover was givenfor a number of major projects in theenergy generation and petrochemi-cal sectors, in some cases as struc-tured finance schemes.

Against the background of the highlevel of demand for cover, and inview of the very good record of debtservice in the country and its goodpayment record and strong financ-ing constructions, the FederalGovernment lifted the restrictivecountry ceiling in place previouslyand replaced it by a case-by-case

examination. The IMC manages itstotal exposure to Iran by holding itat a level appropriate to the overallrisk and the country’s ability to serv-ice its debt, which are monitoredand analysed in an ongoingprocess. This guarantees a range ofcover options which is at the sametime flexible enough to enable opti-mum risk management.

56 gas filling stations were delivered by MAN

Ferrostaal in Essen to Iranfor the establishment of anetwork of filling stations.

The target is to replacethe high volume of petrolimported and to reduce

environmental pollution byachieving lower exhaust

emissions.

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International Cooperation

Developments in the OECD

International cooperation between the exportcredit insurers in the industrialized member statesof the OECD in the year under review focused onthe following aspects:

2004 was a year of consolidation in the work ofthe OECD Export Credits Group. On 1st January2004 the “OECD Recommendation on CommonApproaches on Environment and Officially Sup-ported Export Credits” came into force. The year

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under review was marked by the implementationin the individual member states of these expand-ed OECD environmental guidelines. The guidingprinciples enable the application of standardizedcriteria for examining environmental aspectswhen granting export credit guarantees and thusmark a significant step towards creating a levelplaying field in competition.

A new wording of the OECD Consensus waspassed in the OECD Consensus Group, and hasbeen in effect since 1st January 2004. The aim ofthis reform was to make the text more user-friendly and easier to read, without changing thesubstance of the rules. In addition there was tobe more transparency for non-OECD memberstates, since these countries are increasinglyoperating export credit insurance systems for thepromotion of capital goods exports on mediumand long-term payment conditions which arecomparable to those of the classic industrialnations. The OECD Consensus was thereforemore closely adapted to the systematic structureof the WTO Agreement on Subsidies and Coun-tervailing Measures. The Group is continuing itsefforts to generate an intensive dialogue withthose countries which are interested in exportcredit issues, but are not members of the OECD.For instance, it was agreed to begin negotiationson a reform of the OECD Sector Agreement onaircraft with the involvement of Brazil during thecurrent year.

In addition, intensive discussions began onreforms to the material rules of the Consensus. Inparticular, credit periods, the repayment profile,local costs and the credit conditions for renew-able energies are high on the agenda. It is intend-ed to conclude this very far-reaching fundamentaldiscussion on reforms within the current year.

Agreement was also reached in the OECD Con-sensus Group to record data on untied aid cred-its, at first for a limited period of two years, inorder to create more transparency. The primaryaim of collecting this data is to ensure that tenderprocedures for projects supported by an untieddevelopment aid credit are in fact fair and trans-parent.

The OECD Premia Group continued its discus-sions on the transparency of the methods of cal-culation used by the national credit insurers insetting premium rates for commercial risks.According to the results obtained to date, thepremiums for the area of commercial risk not har-monized by the OECD rules diverge considerablyfrom each other. The overall premium amount isaccordingly affected by this. Against the back-ground of the pertinent WTO rules on premiumcalculation by state export credit insuranceschemes, the discussion centred on premiumsfor business with private buyers and/or with pri-vate banks as guarantors in countries where thepolitical risk is assessed as being negligible (“Cat-egory 0 countries”).

Besides this topic, the Group began developing amethodology to allow the approximation of thepremiums for political risk cover harmonizedacross the OECD to the risk mark-ups in the pri-vate capital market in cases where finance with acomparable level of risk is involved. The goal atthe end of the day is to take the appropriate mar-ket benchmarks into consideration in any futurereview of the level of minimum premiums.

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The group of OECD Country Risk Expertsassesses country risk, and carried out evaluationsof 145 countries during the year under review,allocating countries to one of the seven cate-gories in the country risk model which underliespremium calculation. The quarterly meetings ofthe Group ensure that significant economic devel-opments can be factored into the categorizationprocess without undue delay. The current countryclassifications can be seen on our website atwww.agaportal.de.

Due to improved economic and financial data asa result of the high oil price, a number of MiddleEastern countries were upgraded. The improvedbudgetary situation led to a noticeable decline inthe payment risk of these countries, despite thefact that the structural weaknesses observabledue to a comparatively undiversified economyremained unchanged. In particular, the one-sidedconcentration on the petroleum sector, and hereagain on the export of primary materials ratherthan refined products, make these economieshighly vulnerable to fluctuations in the oil price.

Venezuela was also able to profit from this devel-opment. The first steps in the direction of normal-ization after the tense situation of recent timeswere apparent here.

European Union

The EU Council Working Group on the coordi-nation of policy in the field of credit insurance,bonding and finance credits played an importantrole in the year under review, especially in coordi-nating the positions taken by the EU on theissues discussed in connection with the reform ofthe OECD Consensus. Particularly deserving ofmention is a proposal drafted partly as a result ofa German initiative to flexibilize the Consensusrules for renewable energies and hydrologicalprojects. Longer credit periods and a higher pro-portion of permissible local costs are intended totake account of the special circumstances ofthese sectors and to create incentives to promoteprojects of this type with positive environmentalimpacts.

Ten new countries joined the EU on 1st May 2004.The Working Group integrated these countries,which had already enjoyed observer status sincemid-2003, into their ongoing work schedule.

A theme of particular relevance in the EU is mar-ketable risks. The Commission Notification forshort-term business of 2001 prohibits stateexport credit cover for exports on short financingterms within the EU and to the core countries ofthe OECD. The European Commission inclinestowards regarding all short-term credit risks in theaccession countries as also being marketable.Against this background, the Federal Govern-ment decided to stop granting new short-termspecific guarantees as well as cover under who-leturnover policies for the accession countries asof 1st January 2005, but to honour existing poli-cies up to their expiry. Cover under a whole-turnover policy light is being given at the previouslevel until further notice, since there is no realisticalternative for small and medium-sized enterpris-es on the private insurance market.

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65

Dr. Hans Janus, Member of the Board of Management of Euler HermesKreditversicherungs-AG, was returned for a second term as President at the annual meetingof the Berne Union. Piper Starr of US EXIMBANK was elected Vice-President.

Left to right: Martin Endelman, Kimberley Wiehl (General Secretary), Dr. Hans Janus, Luis Antonio Ibanez, Lennart Skarp (Deputy General Secretary)

Berne Union

The Berne Union (BU) meanwhile comprises 54state and private credit insurers from 43 coun-tries. For the state or officially-mandated exportand investment insurers (ECAs), the Berne Unionis a valuable and increasingly important forum forthe international exchange of information aboutcountries and relevant issues. Apart from the

At the end of 2004 the Commission ordered anexpertise with the purpose of reviewing thedefinition of marketable risks. This expertise isdue to be completed in early 2005. Since therewas some delay in ordering the expertise, theCommission has prolonged the Notificationoriginally due to run out at the end of 2004 until atthe latest 31st December 2005. In the interests ofmaintaining a functioning set of underwritinginstruments for short-term business, the FederalGovernment is pressing for the expansion ofmarketable countries to be restricted to the tenEU accession countries.

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intensification of the scope of cooperationbetween the individual members, the contacts tothe International Credit Insurance & Surety Asso-ciation (ICISA), the largest global association ofprivate export credit insurers alongside the BU,were further expanded. Thus the two organiza-tions held a workshop together in early 2004 inAmsterdam on the theme of support for SMEs.

As in the previous year, the issues surroundingchanging financing conditions raised for the(state) export credit insurers by Basel II took prideof place in the proceedings. The increasedinvolvement of ECAs in the restructuring arrange-ments necessitated by the payment difficulties ofmajor foreign debtor companies, including thecoordination of efforts with other groups of cred-itors, played an important role in the discussionsat the various BU forums.

At the international level, too, the sustained shiftof emphasis away from political and towardscommercial claims, as well as the direct and indi-rect impact of this on the work of the ECAs wasan important topic, ranging from credit underwrit-ing up to activities to recover monies after indem-nification. Among other events, a workshop onthis theme was held in Vienna in December. In themonitoring of countries, Asia, focussing on Chi-na, and Latin America and several North Africancountries were at the forefront of consideration.

At the Annual General Meeting of the BU inOctober 2004 in Taipei the currently serving Pres-ident of the BU, Dr. Hans Janus, Member of theBoard of Management of Euler Hermes Kredit-versicherungs-AG, was returned to office foranother year. In addition, in the person of PiperStarr of US EXIMBANK, a woman was electedVice-President of the BU for the first time. Andfinally, the commitment of the Berne Union to thefurther development of the activities and goalswhich it has pursued during the almost 70 yearsof its existence found their echo in the resolutionof a common “Berne Union Value Statement”. In this declaration the members pledge allegianceto ethical and environmentally relevant values inthe context of the promotion of exports and for-eign investment. The statement reflects themembers’ commitment to global trade on thebasis of sustainability and responsibility.(www.berneunion.org.uk).

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Cooperation with credit insurers in other countries

As part of the German-Brazilian Trade Days inStuttgart on 21st June 2004 a cooperationagreement was signed with the Brazilian exportcredit insurer Seguradora Brasileira de Crédito àExportaçao S.A. (SBCE). The agreement envis-ages closer cooperation by means of parallel andjoint insurance constructions for individual trans-actions as well as an intensified exchange ofinformation about common German-Brazilianprojects in third countries.

In 2004, too, multi-sourcing-projects benefitedfrom the option of one-stop shopping from a sin-gle credit insurer. Cooperation in the form of rein-surance* enabled the entire joint German-Danishproject to erect a wind farm in Columbia to becovered by a Federal Government guarantee.

* Reinsurance:

Using the reinsurance model, projects involvingexporters from different countries (multi-sourcing-projects) can be covered by a single export creditinsurer, so that the main supplier and the financingbank only have to deal with one partner. The risk isshared between the parties to the reinsurance agreement according to the national percentages ofgoods delivered.

Experts from the OeKB and the consortiumdiscussed the topic of reinsurance and theimprovement of cooperation at a two-dayworkshop in Hamburg.

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The Danish export credit insurer EKF reinsuredthe Federal Government for the Danish share ofdeliveries. Several working meetings and work-shops were held with other ECAs to further

German-Japanese consultations in Kanazawa,Japan from 8. – 10. November 2004.

Members of the German delegation: from right toleft: Dr. Sven Heckel and Dr. Michael Kruse (Federal

Ministry for Economics and Labour), Dr. Hans Janusand Dr. Eckehardt Moltrecht (Euler Hermes)

improve cooperation in the field of reinsurance.Besides working meetings with SACE (Italy) andEKF (Denmark), a two-day reinsurance workshopwas held with the OeKB in Hamburg. This was infact the second German-Austrian meeting on thistopic. Directly following this workshop, there wasfor the first time a temporary exchange of under-writers from the credit departments of the twocompanies, which both sides judged as beingvery useful and helpful.

The accession of the ten new countries to theEuropean Union on 1st May 2004 greatly simpli-fied the cooperation with these countries in theform of joint insurance*, since this is regulatedbetween EU member states by a Council Direc-

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S – subcontracting deliveries for 30-40 % pursuant to decision of the Council of the EU (up to 40 % in the case of order values under 7m EUR)

S* – subcontracting delieveries of 30 % according to bilateral agreement

C – coinsurance agreement under EU regulations

C*– coinsurance under bilateralagreement

R – reinsurance agreement on a bilateralbasis

Cooperation agreements

Austria S, C, RBelgium S, C, R

Brazil C*Cyprus S, C

Czech Republic C*, RDenmark S, C, R

Estonia S, CFinland S, C, RFrance S, C, RGreece S, C

Hungary C*Israel RItaly S, C, R

Japan S*, C*, RKanada R

Latvia S, CLithuania S, C

Luxembourg S, C, RMalta S, C

Netherlands S, C, RNorway S*, RPoland C*, R

Portugal S, C, RSlovak Republic S, C

Slowenia C*, RSpain S, C, R

Sweden S, C, RSwitzerland S*, C*, R

Turkey C*United Kingdom S, C, R

69

tive. On top of this, the inclusion of deliveries fromthese countries up to 30 – 40 % is now possible.

Outside the multilateral committees of the EU andthe OECD, bilateral consultations are held at reg-ular intervals with important European partners aswell as with Japan. There is also an annual meet-ing of the G7 export credit insurers.

* Joint insurance:

When the primary supplier passes on his foreignrisks to the subcontractor, e.g. when the latter onlygets paid when the foreign buyer has paid the primary contractor, an application can be made forso-called joint insurance. Among EU memberstates, this is regulated by a directive from theCouncil. There are bilateral agreements with othercredit insurers. Besides this, there is the option ofconcluding a joint insurance agreement with otherstate export credit agencies covering just a singletransaction.

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Development of export credit guarantees

Cover for new business

The Federal Republic of Germany granted exportcredit guarantees for exports to 159 countries inthe year under review. Newly covered businessreached an all-time high, with a rise of 31.8 %,order value at year-end was 21.1 billion EUR after16.0 billion EUR in 2003.

In newly covered business China led the field, fol-lowed by Iran and Turkey. The ten countries withthe highest cover volume accounted together for55.6 % of insured orders. China once againtopped the list, with an increase of 81 %. Themajority of export credit guarantees is in respectof plant and machinery for the manufacture ofpaper and projects for the construction andmodernization of steelworks. As in previousyears, capital goods transactions were donealmost exclusively on short payment terms. Thisreflects the high level of liquidity in the Chinesemarket.

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71

Cover for Iran has more than tripled and mostlyconcerned medium and long-term projects in theenergy and petrochemical sectors.

For Turkey (up by 30 %), besides cover for short-term business, extended-term Hermes guaran-tees were granted for a turnkey project to con-struct a gas and steam power plant, a plywoodfactory as well as for deliveries of machinery tovirtually every sector of the economy.

Business with Russia, too, has developed in agratifying way. Cover volume went up by 77.6 %.Export credit guarantees were given for mobilephone projects, information systems, medicalequipment and projects for the expansion andmodernization of steelworks.

P.R. China

Iran

Turkey

Russia R.F.

Brazil

Egypt

Taiwan

Poland

Mexico

Saudi Arabia

2.381.32

2.300.67

1.521.17

1.420.80

1.051.02

0.780.23

0.590.30

0.580.490.57

0.410.530.49

2004

2003

Top markets for newguarantees 2004/2003 in billions EUR

Subtotal 2004: 11.72bn EUR (55.6%)Total 2003: 21.07bn EUR (100%)

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11.4

3.8

0.2

0.3

4.3

13.2

0.1

3.4

19.0

14.1

3.6

0.10.2

4.2

12.3

'00 '01 '02 '03 '04

Covered percentage oftotal export volume bycountry group in %

Industrial countries

Central/Eastern Europe

Developing countries

72


New business with Brazil continues to be largelybased on wholeturnover policies, covering short-term trade transactions.

Turnkey projects to build three fertilizer factoriesin Egypt were secured by means of export creditguarantees. A Hermes guarantee was assumedfor the delivery of 42 locomotives for a publictransport system to Taiwan.

Breakdown of newly coveredbusiness by country groups

In regional distribution of new cover the develop-ing countries – and in particular here the thresh-old countries – once again accounted for thelion’s share with 75.8 % (2003: 75.1 %). TheCentral and Eastern European countriesreached 16.7 % after 17.7 % in the previous year,while the Western industrial countries, true toform, brought up the rear with 7.5 % (2003:7.2 %).

'95 '96 '97 '98 '99 '00 '01 '02 '03 '04

1.6

3.5

16.0

21.1

12.0

2.8

1.2

16.01.0

2.9

12.5

16.4

13.7

1.51.9 2.6

1.8

13.7

18.117.1

14.7

3.11.0

18.8

11.9

3.00.5

15.4

11.7

1.60.3

13.6

17.0

1.90.6

19.5

13.9

2.30.4

16.6

Guarantees by country group in billions EUR

Industrial countries Central/Eastern Europe Developing countries

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millions EUR

1,162.6

2,825.9

12,000.2

15,988.7

1,653.0

1,336.2

2,908.2

6,101.3

2,222.7

587.1

3,291.5

1.6

millions EUR

1,582.0

3,522.7

15,962.1

21,066.8

2,071.2

2,026.7

2,598.7

9,261.3

4,041.3

730.3

4,489.7

4.2

2003

%

7.2

17.7

75.1

100.0

10.3

8.4

18.2

38.2

13.9

3.7

20.6

0.0

%

7.5

16.7

75.8

100.0

9.9

9.6

12.3

44.0

19.2

3.5

21.3

0.0

2004

Volume of cover by country group




Total

European developing countries

African developing countries

Latin American developing countries

Asian developing countries

Near/Middle East

Southern/Central Asia

East Asia

Oceania

2.340

'00 '01 '02 '03 '04

3.5232.8262.8801.882

Volume of cover for Central/Eastern Europe in billions EUR

1,419.7

575.9

432.3

338.0

172.0

Guarantees 2004 forCentral/Eastern Europein millions EUR

Subtotal: 2,937.9m EUR (83.4%)Total: 3,522.7m EUR (100%)

Russia R.F.

Poland

RomaniaCzech

RepublicHungary

Total exports from the Federal Republic of Ger-many to developing countries stood at 120.5billion EUR after 101.9 billion EUR in the previousyear. Of this, exports to the tune of 16.0 billionEUR were covered by Federal Export credit guar-antees – this represents a share of 13.2 %.

The main thrust of cover for the developing coun-tries in 2004 was again focussed on the coun-tries of Asia, whereby East Asia* plays a leadingrole with a share of 21.3 %. Deliveries to the Mid-dle East also posted a strong increase to 19.2 %.The share of the Asian countries in total coverrose from 38.2 % to 44 %. The highest coverwas assumed for China and Taiwan.

(*Please refer to the country categories in theAnnex P. 100).

German exports to the Central and EasternEuropean countries went up 12.1 % year-on-year. Newly granted cover, in contrast, rose by24.7 % to reach 3.5 billion EUR. The rate of Fed-eral Government covered business is thus 4.3 %.An increase in export credit guarantees wasobserved for almost every one of the Central andEastern European countries.

JB_2004_e 01.08.2005 12:22 Uhr Seite 73

Due to the risk structure of short-term creditsales in the Western industrial countries and theavailability of insurance cover from the privatemarket, there is relatively little demand for stateexport credit guarantees for exports to thesecountries. In the year under review the industrialcountries accounted for exports with a value of528.9 billion EUR, representing 72.1 % of totalexports. Export credit guarantees went up byabout a third due to a number of major projects,reaching just under 1.6 billion EUR after 1.2 bil-lion EUR in the previous year. Cover was givenhere, for example, for two cruise liners for theUSA and the UK. The share of the industrializedworld in total export credit cover is 7.5 %. As aproportion of total exports to the industrializedcountries this resulted in a covered share of 0.3 %.

Breakdown by horizon of riskand type of cover

A breakdown of newly covered orders in theamount of 21.1 billion EUR by horizon of risk andcover type is shown in the diagram on the left.

In short-term business with credit periods of upto one year the volume of cover rose by 22.6 %to 13.4 billion EUR. Differing trends emerged forthe various types of short-term cover: Turnoverin wholeturnover policies climbed by 10.6 %,while the turnover covered by revolving policiesrose only slightly (5.9 %). In short-term specificcover, in contrast, there was a robust surge of61 %. The share of short-term guarantees in totalcover nevertheless declined due to the even larg-er rise in medium- and long-term guarantees,dropping from 68.3 % to 63.5 %. 65.3 % of new-

518.9

356.8

143.6

122.4

121.9

Guarantees 2004 for industrial countriesin millions EUR


United StatesUnited

Kingdom

Netherlands

Sweden

Italy

6.2

1.5

4.2

9.2

21.1

8.4

2.6

1.4

3.6

16.0

3.6

2.1

2.2

8.59.2

1.51.4

7.43.5

1.3

2.7

9.1

16.6

19.5

16.4

'00 '01 '02 '03 '04

Covered exportsby horizon of riskin billions EUR

Specific policies over 5 years

Specific policies 1 - 5 years

Specific policies up to 1 year

Wholeturnover and revolving policies

74


JB_2004_e 01.08.2005 12:22 Uhr Seite 74

Brazil

Turkey

Poland

Russia R.F.

Mexico

753.7

512.9

453.4

410.6

893.1


Wholeturnover policies 2004in millions EUR

8.8

0.4

4.2

1.5

6.2

41.4 %

2.0 %20.1 %

6.9 %

29.6 %

Guarantees 2004 by horizon of riskin billions EUR

Wholeturnover policies:

Revolving policies:

Short-term specific policies:

1 - 5 years:

Over 5 years:

ly covered short-term business was under whole-turnover policies (in 2003, this was 72.3 %).

The number of wholeturnover policies rosemarkedly again due to the continuing highdemand for wholeturnover policies light. Theportfolio stands at 908 policies, the highest figuresince the beginning of the 90s (2003: 870).

The volume of exports covered by whole-turnover policies rose to 8.7 billion EUR. This isthe highest ever turnover since the reform of thewholeturnover policies in 1981. Premium incomewas correspondingly at a record level, reaching55 million EUR. The countries with the highestturnover were once again Brazil, Turkey andPoland with increases between 79 (Brazil) and134 million EUR (Turkey). The countries with thehighest rise in turnover also included Argentina,which moved up from 24th to 14th place with a riseof 89 million EUR.

The highest turnover in wholeturnover policieslight was posted by Russia. Brazil occupies 14th

place. As expected, wholeturnover policies lightwere frequently used for exports to Central andEastern Europe. The turnover reported from theexports to the new EU accession countries was31 %. In all, wholeturnover policies light generat-ed turnover of 62 million EUR. And this is bearingin mind that the number of policies is constantlyrising and this type of policy almost certainly stillhas to reach its final level of turnover.

75

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76


Wholeturnover policies are primarily used bycompanies with insurable turnover between500,000 EUR and 5 million EUR. The number ofpolicies with a turnover up to 500,000 EUR ismeanwhile greater than those with more than 5million EUR due to the wholeturnover policy light.

The volume of revolving specific policies roseby 5.9 % to 416 million EUR. Their share in totalcover dropped to a mere 1.9 % after 2.5 % theyear before.

Short-term specific policies with a credit periodup to one year jumped by 61 % from 2.63 billionEUR in 2003 to 4.23 billion EUR. This figure alsoincludes short-term receivables due in respect ofprogress payments in constructional works con-tracts. In addition they include cover for capitalgoods transactions which were financed onshort-term conditions although long-term pay-ment would have been permissible. This type ofbusiness increased again, especially for coveredtransactions with China. Although these transac-tions involve large-scale investment, the projectswere handled almost exclusively on short creditterms.

The volume of medium/long-term specific poli-cies rose by 51.5 %. Order values stood at justunder 7.7 billion EUR after 5.1 billion EUR in thepreceding year. The share of total cover was36.5 %, up from 31.7 % in 2003. The countrieswith the highest turnover were Iran, Russia andTurkey. The reason for this increase is severalmajor transactions in Iran and cover for cruise lin-ers.

The share of tied finance credits in the volume ofextended-term specific guarantees fell to 80.4 %after 89.5 % one year earlier.

Iran

Russia R.F.

TurkeyUnitedStatesUnited

Kingdom

1,504.5

787.2

645.5

518.9

356.8


Medium/long-term policies 2004 in millions EUR

China P.R.

Iran

Egypt

Taiwan

Russia R.F.

1,682.9

762.5

613.5

254.2

157.8


Short-term specific policies 2004 in millions EUR

JB_2004_e 01.08.2005 12:22 Uhr Seite 76

77

29,659

22,694

27,546

23,565

2003 2004

Numbers of applicationsInitial decisions incl. increases

Volume of decisionsOrder values / limits in millions EUR

Numbers of applications/volume of cover

1,116896220

7,6996,1681,531

1,242978264

11,9178,3483,569

2003 2004

Number of newspecific policies

of which for private buyersof which for public buyers

Volume in millions EURof which for private buyersof which for public buyers

New specific policies

Number/volume of applications,types of goods covered

The number of new cover applications in theyear under review, including those for increasedcover, went down by 7.1 %. The volume subjectto decisions, i.e. the sum of order values under-lying the applications, rose in contrast by 3.8 %.The number of applications for wholeturnoverpolicies was down both for private and publicbuyers, while specific policies on private buyersshowed an increase of 15.5 %. Specific cover forpublic buyers slid by 4.8 %.

The total number of decisions taken includingperiodic renewals for offers of cover and requestsfor modification decreased by 5.0 % to 42,107.

The number of new short- and medium-termspecific policies rose by 11.3 % to 1,242. At thesame time the overall volume of underlyingorders went up by 54.8 %. The number of majorprojects with a value in excess of 50 million EURrose from 25 to 43. These transactions represent48.5 % (2003: 38.8 %) of the volume of specificcover.

The ratio between cover for public and privatebuyer risks shifted by 1.6 percentage points infavour of public buyers. 78.7 % of specific poli-cies were accounted for by private and 21.3 %by public buyers. In the order values covered, theratio between private and public buyers was 70.1 % to 29.9 % (2003: 80.1 % private and19.9 % public buyers).

The breakdown of specific policies by types ofgoods reveals a robust increase in the volume ofcover for plant construction (68.4 %). Exportcredit guarantees for machinery and equipmentas well as for aircraft rose by 67 % in each case.The share of guarantees for aircraft reached10.7 % of overall specific cover or 6.1 % of totalbusiness covered. (cf. table in Annex P. 94).

JB_2004_e 01.08.2005 12:22 Uhr Seite 77

Export credit guarantees for ships went up by29 % and contribute 3.9 % to the total volume ofexports. The share of military goods was 0.1 %.

Claims and recoveries,rescheduling

Claims payments

The claims payments made by the Federal Gov-ernment in 2004 stood at about the same levelas in the previous year. With a volume of 558.5million EUR they were slightly higher than thosein 2003 (514.0 million EUR), yet this cannot beinterpreted as a reversal of the trend towardsreduced claims observable for several years now.Instead, the claims level is rather stabilizing. Theproportion of political to commercial claims hasremained steady at just over 20 to just below80 %.

Payments for political claims rose again for thefirst time in four years (15.0 %). The amounts dis-bursed to the tune of 124.9 million EUR are mod-erate in comparison to the 1990s and 2000,however. As already in the previous year, thelion’s share of political claims paid out wasaccounted for by Argentina (70.8 million EUR).This was followed by Zimbabwe (34.2 millionEUR) and Pakistan (13.3 million EUR).

The volume of claims paid out for commercialrisk went up slightly by 7.3 % to reach 432.3 mil-lion EUR. Special non-recurring factors wereresponsible for this increase, which should notdistract attention from the fact that the FederalGovernment was spared any major commercialclaims for the first time in many years. Theprocess of indemnification usually focuses on thedue date of the covered instalments. For this rea-son numerous transactions which had alreadydefaulted in the preceding years continued to beindemnified in the year under review as and whenthe instalments fell due. Thus especially substan-tial amounts were indemnified by the Federal

Plants

Machinery and equipment

Electronic, precision engineeringand optical equipment,telecommunication

Ships

Vehicles, locomotives

Aircraft

Construction services

Other services

Various

5,368

2,397

1,109

815

356

1,279

234

301

58

45.1 %

20.1 %

9.3 %

6.8 %

3.0 %

10.7 %

2.0 %2.5 %

0.5 %

Subtotal: 11.917m EUR

Specific policies 2004 by typeof goods in millions EUR

78


JB_2004_e 01.08.2005 12:22 Uhr Seite 78

Government in this year too due to the almosttotal suspension of payments for the past fouryears by the APP Group (Asia Pulp & PaperCompany) with debtors in Indonesia, Singaporeand the PR China, and such payments – proba-bly with a diminishing tendency – will continue toinfluence the account during the coming years.The same is true of another claim arising out of aproject financing transaction, which has mean-

'04

124.9

432.3

1.3

558.5

'02

173.7

513.1

2.1

688.9

'00

645.9

318.5

8.5

972.9

'01

275.8

599.9

5.1

880.8

'03

108.6

403.0

2.4

514.0

Claims payments in millions EUR




Total

while been regulated. This relates to the con-struction of a cellulose plant in Indonesia (MusiPulp).

As a result of the bankruptcy of Swiss-Air in 2001high claims payments were already made to Ire-land and Bermuda in recent years. After theinstalments which fell due in previous years hadbeen paid as they came up, a concluding indem-

The case of Asia Pulp & PaperCompany has already been men-tioned several times and has beenthe subject of intensive activitysince early 2001. This complicatedcase involves debt reconstructionfor receivables due from the APPGroup in Indonesia and the PRChina totalling some 14 billion USdollars.

APP restructuring concluded

Following the finalization of theMaster Restructuring Agreement(MRA) for the Indonesian APP com-panies and its signing by 40 % ofthe creditors on 30th October 2003,the quorum of 90 % of all creditorsrequired for an out-of-court settle-ment was reached on 28.04.2005,and an initial payment for accruedinterest has already been received.

79

JB_2004_e 01.08.2005 12:22 Uhr Seite 79

nification in respect of the entire outstandingcapital was made in the year under review. Thismeans that inherited claims payments for aircraftbusiness will almost completely cease in the nextfew years, so that the outlook for commercialclaims looks likely to be favourable in 2005.

Recoveries

Recoveries under commercial claims showedan unusually positive development. In all, 174million EUR were recovered. This considerable

rise over the previous year (with recoveries of78.5 million EUR) is particularly due to theinfluence of special factors.

The Federal Government was able to recoverover 62 million EUR from successfully concludeddebt reconstructions of defaulting major transac-tions with companies in the Indonesian steelindustry. These recoveries, together with theprincipal repayment instalments falling due in thisyear, were generated in the form of high one-offpayments (44 million EUR). The significant upturnin the fortunes of the steel industry meant that arestructuring arrangement concluded with aMexican steelmaker which originally envisagedthe repayment of already indemnified receivablesup to March 2010, could already be repatriatedin full (25 million EUR) in the year under review.

80


India

Mexico

Argentina

Belgium

Venezuela

Indonesia

Côte d'Ivoire

Korea

Chile

Bermuda

70.9

33.1

21.5

9.9

4.1

3.8

3.6

3.4

3.2

2.0

Recoveries under commercial claims 2004 in millions EUR

Subtotal: 155.5m EUR (89.4%)Total: 174.0m EUR (100%)

124.9

432.3

1.3

22.4 %

0.2 %

77.4 %

Claims payments 2004in millions EUR




Subtotal: 558.5m EUR

Indonesia

Ireland

Bermuda

India

Brazil

Mexico

Singapore

Argentina

China P.R.United

Kingdom

93.2103.6

56.214.2

40.44.2

35.445.3

26.911.2

26.642.2

24.527.7

22.539.3

20.222.2

14.24.8

2004

2003

Claims payments under commercial risk cover 2003/2004 in millions EUR

Subtotal 2004: 360.1m EUR (83.3%)Total 2004: 432.3 EUR (100%)

JB_2004_e 01.08.2005 12:22 Uhr Seite 80

81

'00 '01 '02 '03 '04

855.3849.4

174.0

1,029.3

718.5703.1

78.5

797.1

477.7470.1

343.4

821.1

438.3377.6

61.8

500.1

684.9651.8

68.6

753.5

Recoveries for claims paid (excl. interest) in millions EUR

under political risk coverthereof rescheduled amounts

under commercial risk cover

Total

As in preceding years, additional recoveriesunder Airbus business were booked from Mexico(6.5 million EUR) and Cote d’Ivoire.

The fact that the Federal Government success-fully regulated various claims in Argentina andBrazil through reaching restructuring and prolon-gation agreements and through the sale of themachines delivered also contributed to the goodrecovery result.

Debt restructuring agreements in major claimsgive good reason to expect high recoveries in thecoming years, but these are unlikely to reach thelevel of 2004.

Subtotal: 2,726m EUR (97.5%)Total: 2.796m EUR (100%)

Russia R.F.

Brazil

Poland

Nigeria

Algeria

Egypt

Gabon

Ukraine

Pakistan

1,764

309

295

157

111

46

18

Revenues 2004 in millions EUR

15

11

Rescheduling

The positive trend in rescheduling has contin-ued. Payments received from a total of 31 debtorcountries stood at 2.8 billion EUR (of which1.1 billion EUR were capital repayment), thusslightly exceeding the previous year’s figure. TheRussian Federation once again topped the list ofdebtors with the highest payments, with some1.8 billion EUR, followed by Brazil and Poland,each with around 300 million EUR. Nigeria maderepeated substantial payments to the Paris Clubcountries. Within the framework of these pay-ments, Germany received 156.8 million EUR, butthis still leaves Nigeria’s outstanding debt,708 million EUR, at a high level.

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82


Iraq

The Paris Club signed a multilateral debtrescheduling agreement with Iraq on21st November 2004. This is the largestrescheduling volume after the reschedulings ofRussian debt in 1996 and 1999. Iraq was grant-ed debt forgiveness as an extraordinary meas-ure. The Paris Club accepted in this context theIMF Emergency Post Conflict Arrangement(EPCA) resolved on 29th September 2004 as thebasis for financing this arrangement. The agree-ment is based on the Evian conditions, whichwere newly fixed in 2003 and foresee an IMFdebt sustainability analysis as the prerequisite forrescheduling. This showed that, despite the oilreserves it possesses, Iraq can only successfullyreconstruct its economy with far-reaching debtforgiveness.

The agreement therefore stipulates debt forgive-ness of 80 %, reducing the total debt of 39 billionUS dollars to 8 billion US dollars. The volume oftrade receivables covered by the German gov-ernment is 4.9 billion EUR, and debt due to theformer GDR to the tune of 1 billion EUR is alsoincluded in the arrangement. The Federal Repub-lic of Germany, together with Japan, France,Russia and the USA, is one of Iraq’s largest cred-itors.

The forgiveness of a total of 80 % of the capitaland interest debt as per 1st January 2005 is tobe made in three phases. 30% will be forgivenwith effect from 1st January 2005 by waiving theright to receive late interest on the debt. Thisreduces the volume of covered German tradereceivables (originally some 4.9 billion EUR, of

which 3 billion EUR were late interest) by some1.5 billion EUR. Increasing forgiveness to 60 %of outstanding debt is planned already for 2005in conjunction with an IMF programme to becompleted over a number of years. The forgive-ness of 50 % of the remaining balance (20 % ofthe original total) is envisaged for 2008 at the lat-est, provided that the IMF acknowledges thesuccessful implementation of the 3-year pro-gramme. Iraq is exempted from all paymentsduring a grace period lasting till 2008.

The creditor countries can choose from twooptions according to the Paris Protocol for theimplementation of the second stage of forgive-ness (42.85 % of the remaining balance). Theseare: direct forgiveness of the debt amount charg-ing interest at market rates on the remaining out-standing debt (the debt reduction option) or alonger-term repayment of the nominally un-changed balance of the debt at a reduced inter-est rate (the debt service reduction option). Thethird stage of forgiveness will be implementedeither as direct forgiveness or, in the case of debtservice reduction, as partial debt relief on theinstalment in question falling due.

The bilateral rescheduling agreement is still in theprocess of being concluded, in particular due tothe necessity to carry out a large-scale debt rec-onciliation process with the Iraqi government.

The effects of the tsunamidisaster in South Asia

The Paris Club discussed the effects of thetsunami disaster in South Asia at its first meetingin January 2005. Based on a joint German/French initiative, the creditor countries agreed ona payment moratorium for the countries affected.

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83

This covers payment obligations of governmentsor the public sector, without taking the privatesector into account. Only Sri Lanka and Indone-sia will make use of the support measures onoffer.

Russian Federation – the ARIES transaction

In mid-2004 rescheduled debt of the RussianFederation due to Germany in the amount ofsome 5 billion EUR was securitized as a publicbond issue in an innovative transaction andplaced on the capital market. This process,known as the Aries transaction, was namedafter the special-purpose vehicle charged withhandling the securitization. The goal of this trans-action, which involves something like a third ofthe total Russian debt due to the Federal Gov-ernment, was to generate an immediate cash-flow through securitizing the debt instead of half-yearly principal and interest payments over a longperiod, as well as transferring part of the creditrisk towards the Russian Federation to the capi-tal market. The Russian Federation’s paymentobligations under rescheduling agreementsremain unaffected by this transaction.

Some 150 exporters participated in the transac-tion with a volume of 27.5 million EUR – on thesame conditions as the Federal Government.

Russian Federation – early repayments

The Russian Federation intends to repay part ofits payment obligations towards its Paris Clubcreditors before the official maturity through adebt buy-back arrangement. Negotiations start-ed between Russia and the Paris Club on themodalities of this project at the beginning of2005.

After its accession to the European UnionPoland, too, had offered to repay its debt to theParis Club countries amounting to some 10 bil-lion EUR before maturity and did so at the end ofMarch 2005.

Argentina

The Argentine government utilized 2004 to makeprogress on the rescheduling of Argentine gov-ernment bonds. These account for some twothirds of total public debt of c. 150 billion US dol-lars, and there has been no debt service sincethe beginning of 2002. The Argentine offer con-cerning debt restructuring was accepted by 76 % of the private creditors. This regulates therestructuring for about 62 billion US dollars (nom-inal). It remains to be seen when reschedulingnegotiations begin between the Paris Club cred-itors and Argentina in respect of their debts.

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84


Rescheduling agreements

The Paris Club concluded multilateral debtagreements with 20 countries with a total volumeof some 51.5 billion US dollars. Iraq accountedfor by far the greatest share of this, with almost39 billion US dollars. Besides debt forgiveness tothe tune of 31 billion US dollars for Iraq, furtherforgiveness of around 6.5 billion US dollars forthe highly indebted poor countries is envisaged(additional bilateral debt forgiveness measuresare not included in this sum).

Kenya and Georgia with a rescheduling volumeof 353 million and 161 million US dollars respec-tively received rescheduling agreements on so-called Houston conditions. This entails agreeingthe repayment of trade debt over a period of 15to 20 years without forgiveness, including agrace period of 5 years. The bilateral reschedul-ing agreement with Kenya was signed in Octo-ber 2004.

Subtotal: 48,449.0m US-Dollar (94.1%)Total: 51,472.6m US-Dollar (100%)

Iraq

Congo

Nicaragua

Ghana

Ethiopia

Madagascar

Gabon

38,900.0

3,016.0

1,579.0

1,560.0

1,487.0

1,057.0

850.0

Volume of multilateral reschedulings 2004 in million US-Dollar

Gabon received rescheduling for debts amount-ing to some 850 million US dollars. The corre-sponding bilateral agreement involving a volumeof some 74 million EUR of trade receivables wassigned at the end of February 2005.

The Dominican Republic is still struggling withliquidity problems following the national bankingcrisis. The rescheduling of transactions with acontract date prior to 30.06.1984, with a volumeof just under 200 million US dollars, was intend-ed to buttress the IMF emergency programmewith support from the Paris Club. After a furtherIMF programme was agreed on 31.01.2005, it isexpected that a further rescheduling agreementwith the Dominican Republic will be scheduledfor April at the Paris Club.

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85

ity of the Paris Club creditors grant complete for-giveness of debt bilaterally. In agreements con-cluded in the year under review Germany for-gives bilaterally trade debts to the tune of 319.5million EUR. With a share of 206.8 million EUR,Nicaragua was the beneficiary of the largest sin-gle debt forgiveness under the HIPC Initiative.


Iraq

Nicaragua

Congo

Gabon

Ethiopia

Madagascar

Ghana

5,900.0

206.8

96.3

73.6

66.9

29.1

1.4

German share in volume ofmultilateral reschedulings 2004 in millions EUR

Share of HIPCs andnon-HIPCs in volume ofmultilateral reschedulings 2004in millions US-Dollar

extended HIPC-Initiative:

Iraq:

other conditions:

7,915.0

38,900.0

4,657.6

9.0 %

76.0 %

15.0 %

Total: 51,472.6m US-Dollar

In the year under review the Federal Republic ofGermany signed nine bilateral reschedulingagreements with a total trade debt volume of 322million EUR, which in most cases implementedmultilateral agreements concluded in the previ-ous year.

The HIPC initiative

Up to the end of the year under review, 15 coun-tries had reached the completion point under theExpanded HIPC Initiative to discharge the debtof the Heavily Indebted Poor Countries and thusqualified for comprehensive debt forgiveness bytheir bilateral creditors. The overwhelming major-

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86

Profit and loss account

Revenues

Revenues from the export credit guaranteeswent up by 11.8 % in the year under review to2.7 billion EUR. This sum can be broken downas follows:

Premiums and fees received rose by 5.2 % to472.9 million EUR. The lower increase in incomefrom premium is attributable to special effectswhich caused a particularly high rise in the pre-mium income for 2003.

The recoveries in respect of already indemnifiedclaims and above all the debt repayment underrescheduling agreements in a total amount of1,029.3 million EUR must be added to the pre-mium income – an increase of 29.1 %.

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87

In addition, there was interest income, whichtotalled 1,203.3 million EUR in 2004 (2003:1,173 million EUR). In an amount of 1,201.1 mil-lion EUR, this was generated almost entirely byrescheduling agreements. The lion’s share of this,61.2 %, came from Russia.

Expenses

Expenses rose during the year under review by8.1 % to reach 624.1 million EUR. In addition toclaims payments totalling 558.5 million EURthere were costs for the administration and han-dling of the export credit guarantee scheme of65.6 million EUR.

Financial result

With a cash surplus of 878.0 million EUR, theexport credit guarantees of the Federal Republicof Germany posted its best ever positive result in2004, up 31.2 % over the previous all-time highin the preceding year. This confirms the reversedtrend of recent years which returned the schemeto black figures for the first time in 1999 with apositive result of 110 million EUR after 16 yearsof running a deficit. This year’s positive result hasreduced the negative balance accrued to date bythe scheme to 11.0 billion EUR. The good resultis exclusively due, however, to the high amountsrecovered under rescheduling agreements.

Interest of 1,203.3 million EUR was booked,mostly under rescheduling agreements. Formethodical reasons this is routinely excludedwhen calculating the financial result, since therefinancing costs incurred by the Federal Gov-ernment in respect of claims paid are also notincluded.

1,029.3

472.9

1,203.3

0.0

38.0 %

17.5 %

44.5 %

Total: 2,705.4m EUR

Revenues 2004 in millions EUR

Amortisation and recoveries:

Premium/fees earned:

Interest received:

Exchange gains:

Russia (FSU)

Nigeria

Poland

Brazil

Algeria

737.0

131.4

99.0

89.5

48.4


Highest interest paymentsunder reschedulingagreements in 2004in millions EUR

-298

-29

'97 '98 '99 '00 '01 '02 '03 '04

669

878

11034

388 402

1,173 1,2031,087

800

543 499

1,284

1,120

Financial resultin millions EUR

Interest received

Cash deficit/ Surplus

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88

Export guarantee portfolio

Statutory cover limit, total commitment level andtotal outstanding risk

A statutory cover limit is set every year in theBudget Law which stipulates the maximumaggregate amount of cover available for exportcredit guarantees and tied finance credits to for-eign debtors. The Federal Securities Administra-tion monitors the utilization of the statutory coverlimit, registers the maximum amounts for which itaccepts liability and deletes expired commit-ments. Cover granted for interest is not set offagainst the statutory limit. As in 2003, the statu-

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89

In the year under review new policies in theamount of 14.2 billion EUR were issued while oldcommitments with a value of 13.9 billion EURwere deleted.

On top of this, additional cover had been grant-ed at year-end for interest of 37.4 billion EUR(2003: 37.8 billion EUR) which was not set offagainst the statutory cover limit. Overall, the totalcommitment of the Federal Governmentamounted to 140.5 billion EUR.

9.2

5.2

20.1

68.7

103.2

64.1

19.1

1.67.0

7.13.3

19.7

67.1 68.3

20.3

3.37.2 7.4

3.3

21.5

68.7 69.4

20.8

3.47.5

7.73.8

20.7

73.9 71.7

20.6

2.67.8

102.7

70.1

21.1

3.38.5

103.0106.1101.1100.999.196.6

91.9

69.4

20.5

4.1

8.9

102.9

'95 '96 '97 '98 '99 '00 '01 '02 '03 '04

117.0117.0

99.7 99.7 102.3109.9 112.5 112.5

117.6 117.6

Total commitments of the Federal Government (exposure),breakdown by country group and statutory maximum exposure limitin billions EUR

Stat. max. exp. limitIndustrial countriesUncategorisable*



* The "uncategorisable" exposure refers mainly to allocations made for wholeturnover policies under the statutory maximum exposure limit.

tory maximum exposure limit was set at 117 bil-lion EUR in 2004. 88.2 % of this had been uti-lized at year-end. The statutory limit for 2005 hasbeen set at the same level, since adequate cov-er is available for issuing new guarantees inrespect of eligible export business.

The total commitment level (exposure) of theFederal Government under export credit guaran-tees (without interest) decreased by 0.3 % to103.2 billion EUR. This figure represents theexposure level actually recorded by the FederalSecurities Administration at the end of the year.This is only a very rough guide to the amountsactually at risk, however, since transactionsremain on the register until they are finally dis-charged, irrespective of the stage of repayment.

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Funds earmarked for exportcredit guarantees at year-end

At the end of the year the Interministerial Com-mittee had issued offers of cover in principle(cover notes) for contracts under negotiation butnot yet concluded with a total value of 12.5 billionEUR. This represents a decline of 3.8 billion EURor 23.3 % over the previous year. Once again thelion’s share of this, 9.1 billion EUR or 73.0 %,went to the developing countries (2003: 78.3 %),but the volume of orders was down by some30 %. Offers of cover for exports to the Centraland Eastern European countries went up byabout a quarter to just under 1.6 billion EUR andhad a share of 12.5 % (2003: 7.7 %). Offers ofcover for business to the industrial countrieswent down from 2.3 billion EUR to 1.8 billionEUR. Their share was thus 14.5 %. Since it is stilluncertain at the time of issue of these offers ofcover whether the contracts will actually go toGerman exporters, only a part of the transactions

The Federal Government’s actual outstandingrisk including interest fell by 4.8 % and stood at54.0 billion EUR at the end of the year (see thechart in the Annex P. 94). Half of the total wasaccounted for by seven countries.

Regional distribution of totaloutstanding risk

The Federal Government’s total outstanding riskis calculated on the future commitments undercover granted less the percentage to be borneby exporters for their own account, but does notpermit any conclusions to be drawn as to the reallikelihood of the risk turning into a claim and thusthe Federal Government’s liability to indemnify.The highest outstanding risk, 78.5 %, wasaccounted for by the developing countries, fol-lowed by Central and Eastern Europe with12.1 % and the industrial countries with 9.4 %.

41,382.6

23,450.24,302.38,399.75,230.4

6,095.5

4,090.3

42,385.9

25,122.34,306.67,638.95,318.1

6,568.1

5,065.5

Total 51,568.4 54,019.5

2003 2004


AsianAfrican

Latin AmericanEuropean



Total outstanding risk by country groupin millions EUR

China P.R.

Iran

Turkey

Indonesia

Russia R.F.

South Africa

BrazilUnitedStatesIsrael

Korea

4.95.0

4.72.6

4.54.6

4.34.8

4.34.2

2.22.12.02.1

1.51.0

1.31.11.21.4

2004

2003

Subtotal 2004: 30.9bn EUR (57.2%)Total 2004: 54.0bn EUR (100%)

Total outstanding risk of the Federal Government2004/2003 in billions EUR

90

Export guarantee portfolio

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earmarked for cover are realized in our experi-ence.

Unrecovered claims

The total amount outstanding to the FederalGovernment from already indemnified commer-cial and political risk claims – including resched-uled commercial debt – was 17.1 billion EUR atyear-end (2003:17.7 billion EUR). This figuredoes not include payments under the Ariestransaction. The graph below shows the debtowed to the Federal Government under resched-uling agreements (13.4 billion EUR) and politicalrisk claims (1.6 billion EUR).

13.4 billion EUR of this sum are regulated bybilateral rescheduling agreements, thus restruc-turing the debt of the debtor countries in accor-dance with their ability to pay.

The political claims indemnified over recent yearsand regulated in rescheduling agreements con-tinue to justify high expectations of recovery.They cannot, however, be completely taken forgranted since debt forgiveness which hasalready been granted and will come into force infollowing years is a component which will modifythe figures of outstandings. Successive resched-uling agreements under the HIPC initiative willthus lead to further debt forgiveness. The level ofcommercial debt outstanding in the HIPC coun-tries is relatively low, however – so that this for-giveness will hardly make any impact on the val-ue of outstanding debt and the break-evenobjective of the export credit guarantee scheme.

Debt relief on principal by the Federal Govern-ment to the tune of 50.1 million EUR (2003: 281million EUR) became effective in the year underreview. Cameroon had the largest share here,27.8 million EUR, followed by Ethiopia andNicaragua. All in all, the Federal Republic of Ger-many has already forgiven debt of 2.1 billion EURto the poorest countries in the world under earli-er initiatives.

Nigeria

Iraq

Poland

Algeria

Brazil

Argentina

Cameroon

Egypt

Ukraine

Russia(FSU) 7.71

1.31

1.01

0.80

0.62

0.60

0.59

0.38

0.34

0.26

Subtotal: 13.62bn EUR (90.6%)Total: 15.04bn EUR (100%)

Debt owed to the Federal Government out of rescheduling agreements and political risk claims 2004 in billions EUR

91

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Annex

Year

Total exportvolumein billions EUR

Newguaranteesin billions EUR

Covered per-centage oftotal exportvolume

Coverapplicationsin billions EUR

1950 4.3 1.0

1955 13.1 5.1

1960 24.5 2.4 9.6 8.3

1965 36.7 2.8 7.5 10.0

1970 64.1 4.9 7.7 12.0

1975 113.3 10.1 8.9 55.8

1976 131.0 13.4 10.2 61.8

1977 139.8 17.2 12.3 59.1

1978 145.5 13.2 9.1 68.4

1979 160.9 12.8 8.0 53.1

1980 179.2 14.6 8.1 64.8

1981 202.9 18.6 9.2 91.5

1982 218.7 20.0 9.2 75.6

1983 221.0 17.0 7.7 58.8

1984 249.6 16.4 6.6 49.0

1985 274.6 15.9 5.8 54.0

1986 269.1 12.9 4.8 27.5

1987 269.5 12.5 4.6 25.9

1988 290.3 13.3 4.6 21.5

1989 * 348.8 14.1 4.0 23.0

1990 348.0 13.7 3.9 29.9

1991 340.4 19.3 5.7 60.2

1992 342.8 20.0 5.8 50.4

1993 321.3 ** 17.2 5.4 43.2

1994 353.1 17.1 4.8 31.6

1995 383.2 17.1 4.5 29.8

1996 403.4 18.1 4.5 26.7

1997 453.8 18.8 4.1 30.2

1998 488.4 15.4 3.2 23.0

1999 507.2 13.6 2.7 22.5

2000 596.9 19.5 3.3 21.0

2001 640.6 16.6 2.6 21.4

2002 647.0 16.4 2.5 22.8

2003 661.6 16.0 2.4 22.7

2004 733.5 21.1 2.9 23.6

* Starting 1989, values include former Eastern Germany** Starting 1993, a new statistical method is applied in the EU to record overall export figures

New guarantees as related to total export volume;cover applications

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93

1950 0.3 0.3

1955 3.8 2.5 0.8

1960 6.1 5.2 3.0

1965 8.7 8.1 4.4

1970 13.8 12.9 5.2

1975 30.7 25.0 29.6

1976 38.3 35.4 33.2

1977 56.2 42.0 40.9

1978 66.5 45.6 58.4

1979 74.1 52.5 49.5

1980 76.7 59.6 42.3

1981 76.7 69.4 41.5

1982 81.8 77.0 39.2

1983 94.6 80.1 40.3

1984 99.7 79.9 35.7

1985 99.7 80.9 33.3

1986 99.7 75.3 23.8

1987 99.7 71.4 24.7

1988 99.7 67.8 23.0

1989 99.7 66.3 19.0

1990 81.8 68.3 20.9

1991 84.4 77.6 33.6

1992 92.0 82.3 29.4

1993 92.0 85.2 28.6

1994 97.1 92.1 19.0

1995 99.7 91.9 15.4

1996 99.7 97.1 14.8

1997 102.3 99.1 17.1 58.0

1998 109.9 100.9 13.6 56.6

1999 112.5 101.1 15.7 54.2

2000 112.5 106.1 18.6 56.5

2001 117.6 102.7 16.2 55.2

2002 117.6 103.0 18.5 52.4

2003 117.0 102.9 16.3 51.6

2004 117.0 103.2 12.5 54.0

* The column “Allocated amount of stat. max. exp. limit” reflects the overall level of exposure under thestatutory limit for the respective year. On the basis of these figures conclusions cannot, however, bedrawn on the amounts actually at risk, because they include claims paid as well as disbursements withinthe scope of reschedulings, for which recoveries are still expected.For this reason, the Federal Government’s total outstanding risk is recorded separately since the end of1997.

Stat. max. exp.limitYear

Allocatedamount of stat. max. exp.limit*

Offers ofcover

Totaloutstandingrisk*

Utilization of the statutory maximum exposure limit and offers of cover in billions EUR

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Annex

2003 in billions EUR in %

2004 inbillions EUR

Total outstanding risk by country

in %

China P.R. 5.0 9.7% 4.9 9.1%

Iran 2.6 5.0% 4.7 8.7%

Turkey 4.6 8.9% 4.5 8.3%

Russlia R.F. 4.2 8.2% 4.3 8.0%

Indonesia 4.8 9.3% 4.3 8.0%

South Africa 2.1 4.1% 2.2 4.1%

Brazil 2.1 4.1% 2.0 3.7%

United States 1.0 1.9% 1.5 2.8%

Israel 1.1 2.1% 1.3 2.4%

Korea 1.4 2.7% 1.2 2.2%

Other countries 22.7 44.0% 23.1 42.7%

Total: 51.6 100.0% 54.0 100.0%

1997 1998 1999 2000 2001

Breakdown of specific policies by type of goods in millions EUR

2002 2003 2004

I Plants 5,352 3,483 1,545 3,510 2,009 2,864 3,187 5,368

II Machinery and equipment 2,631 1,824 908 1,166 1,137 1,409 1,433 2,397

III Electronic, precision engineering

and optical equipment,

telecommunication 1,020 587 418 246 779 1,195 813 1,109

IV Ships, equipment for ships 139 246 1,138 1,870 808 403 632 815

V Vehicles, locomotives etc. 268 79 117 67 653 136 338 356

VI Aircraft 633 662 1,209 2,126 1,549 1,156 764 1,279

VII Construction Services 494 432 437 751 52 286 188 234

Others 402 529 384 608 454 494 344 359

Total 10,939 7,842 6,154 10,343 7,441 7,943 7,699 11,917

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95

Year(s)Premiums/fees earned

Recoveries forclaims paid andrescheduledamounts***

Disbursementsfor claims andreschedulings Cost

Financial result in millions EUR

Interest*

1950-1954 27.6 16.8 25.6 5.3

1955-1959 85.6 83.2 168.0 10.8

1960-1964 141.3 144.7 370.1 14.4

1965-1969 247.0 381.4 587.7 22.8

1970-1974 346.1 421.9 808.1 37.9

1975-1979 897.5 468.5 580.6 82.6

Subtotal 1,745.1 1,516.6 2,540.0 173.7 482.1

1980-1984 1,437.3 860.9 3,034.5 149.9 238.2

1985-1989 1,343.3 1,034.6 5,512.6 183.9 760.1

1990-1994 2,022.9 2,028.3 12,121.9 244.3 1,725.6

1995 591.9 593.2 1,909.9 51.1 803.7

1996 559.7 451.4 1,405.8 48.4 909.1

1997 616.8 604.3 1,469.6 49.7 1,087.3

1998 565.3 488.8 1,031.1 51.5 800.3

1999 393.6 584.5 798.0 70.0 ** 543.2

2000 570.0 502.0 972.9 64.5 498.6

2001 574.5 755.3 880.8 61.0 1,284.2

2002 332.3 821.4 688.9 63.2 1,119.6

2003 449.6 797.1 514.0 63.3 1,172.9

2004 472.9 1,029.3 558.5 65.6 1,203.3

Total amount 11,675.3 12,067.7 33,438.5 1,340.0 12,628.3

Total income 23,743.0

Total expenses 34,778.5

Result -11,035.5

Debt owed to the Federal Government 17,063.6

of which regulated under reschedulings 13,439.6

* interest received by the Federal Budget; not included in result** including supplementary payments for previous years*** without regard of the Aries-transaction (from 2004)

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Annex

Commercial risksCommercial risks are mainly insured under the cov-er given for the credit and manufacturing risksinvolved in export contracts with private buyers. Inthe case of credit risk, the insured event is theuncollectability of insured accounts receivable as aresult of the insolvency of the foreign buyer, as wellas his simple non-payment after the expiry of a cer-tain period (protracted default). In manufacturingrisk cover, the commercial risks recognized asinsured are also the occurrence of buyer insolvencyduring the manufacturing period, the unlawful repu-diation of the contract by the buyer as well as non-payment of cancellation costs if the contract waslawfully cancelled.

Constructional works cover facilityRefers to a type of cover specially tailored to suit theneeds of the construction industry, which in addi-tion to the amounts receivable provides cover forother types of risks which may arise in connectionwith political events during construction abroad(e.g. loss of construction equipment).

Environmental auditThe examination of the environmental aspects ofprojects put forward for export credit cover is car-ried out according to the provisions of the “GuidingPrinciples for the consideration of ecological, socialand developmental aspects”. Since the beginningof 2004, these have been complemented by the so-called Common Approaches: these are basic pro-cedures agreed at the OECD level for the examina-tion of environmental aspects by all the OECDcountries.

Screening

During the preliminary screening process, thoseprojects with potentially negative environmentalimpacts are filtered out. In addition, all projects withan order value exceeding 15 million EUR withextended credit terms are given a preliminary

Definitions and explanations

APG-lightThe APG-light is a comprehensive cover instrumentwhich is inexpensive and easy to handle, especiallywell suited to the needs of small and medium-sizedenterprises with an annual insurable turnover notexceeding 1 million EUR. It covers export businesswith one or more foreign buyers on credit terms ofup to four months. Protracted default is also cov-ered.

Arrangement (Consensus)The Arrangement is a “Gentlemen’s Agreement”between the OECD members which regulates theminimum and maximum terms permissible for theofficial support of exports in order to avoid financingcompetition which would place an unnecessary bur-den on national budgets. It applies only to transac-tions with repayment terms of more than two years.

Bond calling cover(Vertragsgarantie)Bond calling cover enables the exporter who has togive an absolute bond to his buyer in order tosecure his own contractual obligations (advancepayment, bid, supply or maintenance bonds) toprotect himself from losses resulting from the bondbeing called.

CeilingFor countries where cover facilities have beenrestricted for risk management reasons, an amountof cover is fixed which places a limit on the maxi-mum amount for which guarantees can be issued,i.e., a ceiling is established. As a rule, such ceilingsapply to transactions with repayment terms of morethan 12 months.

Club of LondonThe uncovered loans granted by commercial banksare rescheduled by the banks on their own initiative(cf. also Paris Club)

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97

check. Projects located in areas close to naturereserves, or which give concrete reason to expectenvironmentally relevant impacts are also subjectedto a preliminary audit. The projects are divided intothree categories – A, B and C. Category C consistsof projects with no or only minimal environmentalimpacts, B those with only limited impact and A isfor projects with serious potential environmentalimpacts.

Review

The second stage of the procedure involves a morethorough examination, called the review, for thoseprojects which the initial screening has proved to bein need of it. Projects in Category C are as a ruleexempted from any further checks. For category Aand B projects further details may have to be pro-vided in order to be able to assess their environ-mental impact. In principle, for category A projectsan Environmental Impact Assessment, i.e., a verydetailed environmental expertise, must be present-ed. Within the scope of this in-depth examination itis ascertained – among other things – that the proj-ect complies with international environmental stan-dards.

Export credit cover facilityThe export credit cover facility is a cover line whichincludes small tied finance credits issued under acover facility agreement. The Federal Governmentmakes a maximum amount available in advance,and this can be drawn down by simply notifying theindividual credit contracts, subject to these complywith the conditions stipulated by the Federal Gov-ernment. The institutes eligible to give such coverare the Kreditanstalt für Wiederaufbau (KfW) and theAusfuhrkreditgesellschaft (AKA).

Exposure1) Total commitment level of the Federal Govern-ment booked against the annual cover limit; 2) thecommitment under an individual export credit guar-antee.

Financial credit cover facility (buyer credit cover facility)Protects banks against the risks arising in connec-tion with the amounts receivable under a credit pro-vided to a foreign buyer or borrower.

Framework credit coverFramework credit cover safeguards the amountsreceivable of a bank arising from small individualbuyer credits provided under a framework creditagreement to finance German export transactions.A maximum amount of cover is established inadvance by the Federal Government which thebank may then utilise by simply notifying the Feder-al Government of each individual loan to be includ-ed in the framework credit cover, provided that theloan is eligible for cover on the basis of the condi-tions established by the Federal Government. AllGerman financing institutions including Germanbranches of foreign banks are entitled to apply forframework credit cover.

Interministerial committeeDecides on matters of principle and on the avail-ability of cover for individual transactions. The Fed-eral Ministry of Economics and Labour takes thedecisions on the cover applications with theapproval of the Federal Ministry of Finance, inagreement with the Federal Ministries for ForeignAffairs and for Economic Cooperation and Develop-ment, and with the assistance of the Consortiumand experts.

Leasing cover facilityCovers the political and commercial risks involvedin leasing transactions by German lessors (manu-facturers or leasing companies) with lesseesabroad.

Manufacturing risk cover facility A manufacturing risk cover facility enables theexporter to protect his production costs incurred tomanufacture the supplies and/or perform the serv-ices specified in the export contract in the event thatthe fulfilment of the export contract becomesimpossible for or unacceptable to the exporter.

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Annex

Marketable risksWith effect from 1st January 2002, the commercialand political risks arising out of export transactionswith public and non-public debtors with credit peri-ods up to two years in the core OECD countries –i.e. the EU member states, the USA, Canada,Japan, Australia, New Zealand, Iceland, Switzerlandand Norway – are considered to be marketablerisks. It has become apparent that private creditinsurers are able to offer sufficient and long-termcover facilities in this segment. Due to the principleof subsidiarity it is therefore no longer permissible tooffer state export credit guarantees for this type ofbusiness. As of 1 January 2005, the subsidiarityprinciple – with the exception of wholeturnover poli-cies light – also applies to the ten new memberstates which joined the EU on 1 May 2004.

Multi-sourcing projectsProjects involving exporters from different countriesand, in many cases, with multinational financing.

Offer of coverDeclaration of intent to provide cover subject to thecondition that the factual and legal basis of thetransaction does not change.

Paris ClubInternational union of official creditors which reor-ganises the debt of countries experiencing paymentdifficulties. The debt treatment refers almost exclu-sively to officially guaranteed commercial debt, i.e.guaranteed in particular by the governments of thecreditor countries (in the case of Germany: exportcredits backed by federal export guarantees) anddevelopment aid loans. The Paris Club has noorganisational structure with written statutes. Theprocedural guidelines have been developed overthe course of time and are amended when and asnecessary (compare “Club of London”).

Political risksThe origin of political risks is to be sought in meas-ures or events stemming from the sphere of stateauthorities. In the case of cover for amounts due for

payment, such risks are political circumstanceswhich cause the insured accounts receivable tobecome uncollectible, especially the general politi-cal cause of loss, which includes legislative or reg-ulatory actions and so-called chaos events such aswar, civil unrest or revolution in foreign countries.The Federal Government further grants cover forthe conversion and transfer risk, i.e., the risk thatamounts duly paid by the foreign buyer in local cur-rency are not converted and/or not transferred dueto restrictions on the international payment systembetween countries.

Cover is also given for the risks of frustration of con-tract, when it becomes impossible to fulfil a contractand entitlements under it are lost, as well as the riskof loss of goods before the passing of risk for rea-sons which can be attributed to political circum-stances. If such a cause of loss seems likely – justas in the case of the general political cause of loss– and the goods are sold elsewhere in such a situ-ation, then the risk of a shortfall in the proceedsrealized is also insured.

In the case of manufacturing risk cover the politicalrisks insured comprise the political circumstancesabroad which lead to the cessation of manufactureor to non-shipment, as well as embargos imposedunder the export Law and by any third countrieswhich may be involved.

Private buyer risk guaranteeAn export credit guarantee is considered to be inrespect of private (as opposed to public) buyer riskwhen the foreign contractual partner of the Germanexporter is a private buyer and can become bank-rupt.

Project financing schemesAre applied to complex export transactions forwhich traditional securities are not available, butwhere the project itself generates sufficient incometo cover the operating costs and the debt servicefor borrowed funds.

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99

Protracted defaultNon-payment which persists for a longer period. Ifan amount owed by a foreign buyer is not settledwithin a period of, normally, six months after duedate, this is considered as a protracted default. Inthe case of the financial credit cover facility the wait-ing period is reduced to one month.

Public buyer risk guaranteeAn export credit guarantee is considered to be inrespect of public (as opposed to private) buyer riskwhen the foreign contractual partner of the Germanexporter or guarantor fully liable for contractual lia-bilities towards him is a government, a regionalauthority or other similar institution.

Securitisation guaranteeA securitisation guarantee can be used to enhancethe credit valuation of a debt as an additional agree-ment to a finance credit guarantee, thus improvingthe conditions of the guarantee, if the policyholderbank grants a tied finance credit to the foreigndebtor and wishes to refinance the loan in turn onthe capital market. After assignment of the covereddebt and of the right to receive payment under theguarantee to a refinancing institution (a bank orfinance house), the finance credit guarantee thusenhanced by a securitisation guarantee takes onthe status of an unconditional payment guaranteeof the Federal Government in favour of the refi-nancer (i.e., he has no waiting period, no self-reten-tion, and is entitled to unconditional indemnification(as if he himself held the original guarantee)).

Short-term revolving policyIn the case of recurring supplies to one and thesame foreign buyer, this type of cover is recom-mended for business with private and public buyersin order to avoid having to submit an individualapplication for each transaction. The maximumcredit period is 24 months.

Specific policy(Lieferantenkreditdeckung)May be issued within the scope of public or privatebuyer risk guarantees in respect of individual exporttransactions to cover the credit risk emanating froman export contract concluded with a foreign buyer.

Statutory maximum exposure limitMaximum amount up to which liability in the form ofissued export guarantees may be accepted by theFederal Government under the Federal Budget Lawand the utilization of which is monitored by the Fed-eral Securities Administration.

Structured finance transactionThe financing of an export transaction in which, dueto insufficient or non-assessable creditworthiness ofthe foreign debtor, and because conventional secu-rity instruments (payment guarantee, letter of cred-it) are not available, other elements are included inthe construction to ensure service of the debt, suchas the proceeds of offtake agreements.

Total outstanding risk of the FederalGovernmentThe country risk statistics reflect the debt owed byindividual countries (including interest) to the Feder-al Government and the amount which would actu-ally have to be indemnified by the Federal Gov-ernment under the export guarantees issued.

Uninsured percentageExporter’s share in the loss in an event of loss,normally 5 % for political risks and 15 % for com-mercial risks and protracted default. In the case offinance credit cover, the uninsured percentage is5 % for all claims, in the case of manufacturing riskcover it is also 5 %.

Wholeturnover policyOffer comprehensive cover for non-marketable risksat reasonable premiums for export contracts with alarge number of foreign buyers and with paymentterms of up to one year.

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Annex

Classification of countries

DAC Classification of developingcountries(DAC = Development Assistance Committee ofthe OECD)

Lat in American developingcountr ies:Anguilla, Antigua and Barbuda, Argentina,Aruba, Bahamas, Barbados, Belize, Bermuda,Bolivia, Brazil, British Virgin Islands, CaymanIslands, Chile, Colombia, Costa Rica, Cuba,Dominica, Dominican Republic, Ecuador, ElSalvador, Falkland Islands, Grenada,Guadeloupe, Guatemala, Guyana, Haiti,Honduras, Jamaica, Martinique, Mexico,Montserrat, Nicaragua, Netherlands Antilles,Panama, Paraguay, Peru, Puerto Rico, St. Kittsand Nevis, St. Lucia, St. Pierre and Miquelon, St.Vincent and the Grenadines, Suriname, Trinidadand Tobago, Turks and Caicos Islands, Uruguay,Venezuela

African developing countries: Algeria, Angola, Benin, Botswana, Burkina Faso,Burundi, Cameroon, Cape Verde, Central AfricanRepublic, Chad, Comoros, Congo, Congo(Democratic Republic), Côte d’Ivoire, Djibouti,Egypt, Equatorial Guinea, Eritrea, Ethiopia,Gabon, Gambia, Ghana, Guinea, Guinea-Bissau,Kenya, Lesotho, Liberia, Libya, Madagascar,Malawi, Mali, Mauritania, Mauritius, Mayotte,Morocco, Mozambique, Namibia, Niger, Nigeria,Reunion, Rwanda, Sâo Tomé and Principe,Senegal, Seychelles, Sierra Leone, Somalia,South Africa, St. Helena, Sudan, Swaziland, Tan-zania, Togo, Tunisia, Uganda, Zambia, Zimbab-we

European developing countries: Albania, Bosnia-Herzegovina, Croatia, Cyprus,Gibraltar, Malta, Macedonia, Moldova, Serbiaand Montenegro, Slovenia, Turkey

Asian developing countries:• Near/Middle east: Bahrain, Iran, Iraq, Israel, Jordan, Kuwait,Lebanon, Oman, Palestine (autonomous territo-ries), Qatar, Saudi Arabia, Syria, United Arab Emi-rates, Yemen

• East Asia:Brunei, Cambodia, China (People’s Republic),East Timor, Hong Kong, Indonesia, Korea, Korea(Democratic People’s Republic), Lao People’sDemocratic Republic, Macao, Malaysia, Mongo-lia, Philippines, Singapore, Taiwan, Thailand,Vietnam (Socialist Republic)

• South/Central Asia:Afghanistan, Armenia, Azerbaijan, Bangladesh,Bhutan, Georgia, India, Kazakhstan, Kyrgyzstan,Maldives, Myanmar, Nepal, Pakistan, Sri Lanka,Tajikistan, Turkmenistan, Uzbekistan

• Oceania:Cook Islands, Fiji, French Polynesia, Guam, Kiri-bati, Marshall Islands, Micronesia, Nauru, NewCaledonia, Niue, Northern Mariana Islands,Palau, Papua New Guinea, Pitcairn Islands,Solomon Islands, Samoa, Tokelau, Tonga,Tuvalu, Vanuatu, Wallis and Futuna

Central/Eastern European countries: Belarus, Bulgaria, Czech Republic, Estonia,Hungary, Latvia, Lithuania, Poland, Romania,Russian Federation, Slovak Republic, Ukraine

Industrial countries:Andorra, Australia, Austria, Belgium, Canada,Canary Islands, Denmark, Germany, Finland,France, Greece, Greenland, Iceland, Ireland,Italy, Japan, Liechtenstein, Luxembourg,Monaco, Netherlands, New Zealand, Norway,Portugal, San Marino, Spain, Sweden,Switzerland, Vatican City, United States, UnitedKingdom

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101

Photographs by courtesy of

P. 8, 21 Nordex AG, Hamburg

P. 10, 35, 37 Airbus S.A.S.

P. 11, 62 KOCKS Krane InternationalGmbH, Bremen

P. 12, 13, 14, Hajo Zylla, Berlin15, 16, 17

P. 19 Jill Flug, Hamburg

P. 20 Peter Wachsmann, Hamburg

P. 23 Uhde GmbH, Dortmund

P. 24, 25 Hinterkopf GmbH, Eislingen

P. 26, 27 Anton Steinecker Maschinenfabrik GmbH, Freising

P. 29 Frank-Hans Popp, Frankfurt

P. 30 Jos. L. Meyer GmbH, Papenburg

P. 31, 70 Siemens AG, München

P. 32, 33 Walter Motorway GmbH, Aschheim

P. 38 Lloyd Werft Bremerhaven GmbH

P. 40, 41 VAI Fuchs GmbH, Willstatt

P. 43 Heye International GmbH,Obernkirchen

P. 44 Technip Germany GmbH, Düsseldorf

P. 46, 47 Otto Wolff Handelsgesellschaft,Düsseldorf

P. 48 ROHDE & SCHWARZ FTKGmbH, Berlin

P. 50 Brückner Maschinenbau GmbH,Siegsdorf

P. 51 Intergrafica Print & Pack GmbH,Essen

P. 52 EUROPIPE GmbH, Ratingen

P. 53 Voith Paper Fiber SystemsGmbH & Co. KG, Ravensburg

P. 54 Zimmer AG, Frankfurt

P. 55 MAN Turbo AG, Oberhausen

P. 56 LOI Thermprocess GmbH, Essen

P. 57 Herborn GmbH, Ginsheim-Gustavsburg

P. 59 Stephan & Machinery GmbH & Co., Hameln

P. 61 MAN Ferrostaal, Essen

P. 65 Taipei Export-Import Bank of China, Taipei (Taiwan)

P. 66, 67 Dirk Bartschat, Hamburg

P. 68 Yusuke Okano, Tokio

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Annex

The leadership function in the InterministerialCommittee, which has the underwriting respon-sibility for Federal Export Credit Guarantees, isexercised by the Federal Ministry of Economicsand Labour.

Bundesministerium für Wirtschaft und ArbeitReferat VC 2Scharnhorststraße 34-37D-10115 BerlinInternet: http://www.bmwa.bund.de

The Federal Government has appointed a con-sortium formed by Euler Hermes Kreditver-sicherungs-AG, Hamburg, as lead partner, andPricewaterhouseCoopers AktiengesellschaftWirtschaftsprüfungsgesellschaft, Hamburg, tomanage the official export credit guaranteescheme. Further details and information may beobtained by contacting the Head Office of EulerHermes Kreditversicherungs-AG in Hamburg orone of the branch offices. Additional informationon the official export guarantee scheme, e.g. cur-rent editions of the AGA-Report, the GeneralConditions and information leaflets as well as theAnnual Reports can also be accessed via Inter-net. You may also request additional informationmaterial or raise your questions directly via e-mail.

Head OfficeEuler Hermes Kreditversicherungs-AGFriedensallee 254D-22763 HamburgMailing address:D-22746 HamburgFederal Republic of Germany

Phone: (+49 40) 8834 9192Fax: (+49 40) 8834 9175Telex: 2 12 115 hk [email protected]

This report on the official export credit guaranteescheme of the Federal Republic of Germany isavailable in German and English.

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Annual Report

Head Office

Euler HermesKreditversicherungs-AGFriedensallee 254D-22763 HamburgPhone: (+49 40) 88 34-91 92Fax: (+49 40) 88 34-91 75Telex: 212115 [email protected]

D-60311 FrankfurtGroße Gallusstraße 1-7Phone: (+49 69) 13 48-159Fax: (+49 69) 13 [email protected]

D-79100 FreiburgBasler Straße 61Phone: (+49 7 61) 40 07 9-39Fax: (+49 7 61) 40 07 [email protected]

D-20251 HamburgStraßenbahnring 11Phone: (+49 40) 2 36 36-190Fax: (+49 40) 2 36 [email protected]

D-30159 HannoverGeorgstraße 36Phone: (+49 5 11) 3 64 01-90Fax: (+49 5 11) 3 64 [email protected]

D-50672 KölnHohenzollernring 31-35Phone: (+49 2 21) 9 20 60-293Fax: (+49 2 21) 9 20 [email protected]

D-04157 LeipzigLandsberger Straße 23Phone: (+49 3 41) 9 08 23-0Fax: (+49 3 41) 9 08 [email protected]

D-68259 MannheimHauptstraße 161Phone: (+49 6 21) 1 29 05-18Fax: (+49 6 21) 1 29 05-99 [email protected]

D-80339 MünchenRidlerstraße 35Phone: (+49 89) 5 43 09-143Fax: (+49 89) 5 43 [email protected]

D-90429 NürnbergSpittlertorgraben 3Phone: (+49 9 11) 2 44 05-15Fax: (+49 9 11) 2 44 [email protected]

D-66111 SaarbrückenBahnhofstraße 80Phone: (+49 6 81) 3 89 96-0Fax: (+49 6 81) 3 89 [email protected]

D-70597 StuttgartLöffelstraße 44Phone: (+49 7 11) 9 00 49-38Fax: (+49 7 11) 9 00 [email protected]

Export credit guaranteedepartment,Berlin

D-10117 BerlinFriedrichstadt-PassagenQuartier 205Friedrichstraße 69Phone: (+49 30) 20 94-53 10Fax: (+49 30) 20 94-53 [email protected]

Branch offices of Euler Hermes Kreditversicherungs-AG

D-12435 BerlinAn den Treptowers 3Phone: (+49 30) 20 28 43-23Fax: (+49 30) 20 28 [email protected]

D-33602 BielefeldZimmerstraße 8Phone: (+49 5 21) 9 64 56-0Fax: (+49 5 21) 9 64 [email protected]

D-28195 BremenMartinistraße 34Phone: (+49 4 21) 1 65 97-0Fax: (+49 4 21) 1 65 [email protected]

D-44137 DortmundLindemannstraße 79Phone: (+49 2 31) 1 82 99-90Fax: (+49 2 31) 1 82 [email protected]

D-01129 DresdenRiesaer Straße 5Phone: (+49 3 51) 8 53 77-0Fax: (+49 3 51) 8 53 [email protected]

D-40472 DüsseldorfKanzlerstraße 4Phone: (+49 2 11) 9 65 76-80Fax: (+49 2 11) 9 65 [email protected]


Documents

Berlin Annual Report - AGA-Portal · PDF file2004 Annual Report 2004 – Export Credit Guarantees of the Federal Republic of Germany Export Credit Guarantees of the Federal Republic