CESCE

CESCE is Compania Espanola de Seguros de Credito a la Exportacion, Spain's official export credit agency. Since 1972 it has exclusively managed, on behalf of the Spanish State, the political, commercial and extraordinary risks associated with the internationalisation of Spanish companies. CESCE is listed in the Berne Union member directory as Cesce Credit Insurance.

State-backed coverage is designed as an instrument to promote Spanish internationalisation. The Spanish state assumes ultimate liability as guarantor of the coverage offered by CESCE. The instrument is also backed by a state-owned Internationalisation Risk Reserve Fund endowed with resources generated by the insurance activity itself.

Legal and Arrangement framework

Nationally, CESCE's state-backed activity is governed by Law 8/2014 of 22 April on State-backed cover of the risks of internationalisation of the Spanish economy, by Royal Decree 1006/2014 of 5 December implementing that law, by private insurance legislation and by other private law regulations. Internationally, CESCE follows World Trade Organization guidelines, OECD Recommendations and European Union legislation.

Medium and long-term officially supported export credits observe the OECD Arrangement. CESCE states that it has a Climate Change Strategy and that it has been part of the Net-Zero Export Credit Agencies Alliance since that alliance's creation. Anti-corruption underwriting follows the OECD Recommendation on Bribery and Officially Supported Export Credits.

CESCE buyer credit and eligibility

The Buyer Credit Policy covers banks that finance foreign buyers of Spanish goods and services. The policyholder and insured party are the financial institution or institutions that grant the credit. Coverage can be obtained by financial institutions based in Spain or abroad. Maximum published coverage is 99 percent for commercial and political risks.

Commercial risks include non-payment due to insolvency in fact or a statutory filing in law of a private debtor and, where applicable, of the guarantor. Political risks include non-payment or lack of transfer or convertibility due to political violence, catastrophic events, serious economic difficulties abroad, expropriation, nationalisation, measures adopted by the Spanish government or by a foreign government, and non-payment by a public debtor or guarantor.

For transactions with a payment term of two years or more, the buyer must make an advance payment of at least 15 percent of the Exported Value, consistent with the OECD Arrangement's minimum cash payment rule. Local costs may not exceed 50 percent of the Exported Value, or 40 percent in Category I countries, mirroring the Arrangement's local-cost caps. Domestic content included in the contract must constitute at least 30 percent of the credit covered by CESCE in operations in countries in groups 0 to 4, 40 percent in countries in groups 5 to 7, and at least 20 percent in green operations or with SME exporters. Those national content requirements sit alongside the Arrangement's down-payment and local-cost rules.

For transactions with a payment term under two years, the OECD Arrangement does not apply to advance payment or local cost rules. Only the minimum national content requirement described above applies to those shorter transactions. Costs on Arrangement business are calculated in accordance with the OECD Consensus. Approval runs through risk analysis and the State Risks Committee, then an Offer of Conditions and formalisation of the export credit insurance policy.

Products and cooperation

CESCE's state account menu supports collection of exports from public and private clients, competitive financing for foreign clients, working capital financing, bank guarantees for contractual obligations, protection and financing of investments, and green and strategic-sector projects. Buyer credit cover is the core bank-facing medium and long-term product for financed Spanish exports.

CESCE collaborates with other ECAs, private reinsurers and multilateral organisations. Reinsurance agreements allow multi-source exports to be insured under a single lead policy issued generally by the ECA of the main contractor's country. CESCE publishes reinsurance relationships with a wide set of European and other ECAs. Cooperation agreements with multilaterals support information exchange and joint operations where interests align.

An inter-ministerial State-Backed Risk Committee is responsible for the State's control, monitoring and participation in management of State-backed risk cover undertaken by CESCE. Applications for cover are analysed on the basis of information provided by the insured, then submitted to that decision-making body. Upon approval, CESCE issues an Offer of Conditions. Formalisation follows signature of the insurance policy and payment of premium.

Boundaries

CESCE's state-account business, run under Law 8/2014 and Royal Decree 1006/2014 on behalf of the Spanish State, is a distinct legal regime from CESCE's other, non-state-backed insurance lines, even where both are written by the same company. State-account cover follows Arrangement rules for medium and long-term business with Participants and Spanish national content rules on all tenors. CESCE is Spain's official state-account insurer for defined internationalisation risks under Spanish statute and OECD disciplines, and is recognised internationally through Berne Union membership.