Promoting exports with export credit guarantees (Hermes)
The Federal Government offers a facility to exporters and credit institutes that safeguards them against the risks of export business related to the foreign country (buyer’s risks and political risks in the country). Export credit guarantees are a most successful and important instrument of foreign trade and investment promotion. Hermes guarantees protect exporters and banks against defaults caused for political and economic reasons. They are an indispensable tool for guaranteeing export credits, especially for deliveries and services to difficult and risky markets in emerging economies and developing countries, as well as for major projects.
More information is available on the website of the Federation’s partner (Euler Hermes): www.agaportal.de
Investment guarantees from the Federation
The Federal Government has supported German direct investments in developing countries and emerging economies for over fifty years by safeguarding them against political risks with investment guarantees and by offering companies long‑term protection against incalculable risks (e.g. expropriations) when investing abroad. Treaties promoting and safeguarding investments guarantee investors permanent and reliable legal protection that is binding under international law, thereby facilitating stable and predictable framework conditions in the long term. They are, generally speaking, the basis for granting investment guarantees.
More information is available on the website of the Federal Government’s partner (pwc) on investment guarantees: www.investitionsgarantien.de/en
Guarantees for untied loans
Germany is one of the world’s biggest industrialised countries. Owing to its limited domestic raw materials, companies depend on a stable supply of such resources from abroad. While individual companies are responsible for procuring the raw materials they need, the Federal Government can, under certain conditions, support them with federal guarantees for untied loans for the purchase of raw materials. These guarantees safeguard creditors against economic and political credit defaults abroad. Projects must, as a rule, be eligible for support in political terms and be in Germany’s state and macroeconomic interests. Moreover, a requirement for receiving support in the form of a guarantee from the Federal Republic of Germany is the conclusion of a long‑term raw materials agreement with a German buyer.
Further information can be found on the following webpage:
Guarantees For Untied Loans
Involvement of the Federation in trade fairs abroad
Trade fairs abroad offer a good opportunity for sales and presentation of goods. They are also ideal forums for orientation, exchanging information and establishing contacts. Two‑fifths of German industrial companies regularly exhibit abroad. Contracts sealed at trade fairs abroad and follow‑up business resulting from trade fairs account for roughly a quarter of export turnover for the companies involved.
The Federation’s involvement in trade fairs abroad is designed in particular to support small and medium-sized enterprises (SMEs) as they seek to tap export markets. According to the Association of the German Trade Fair Industry (AUMA), over 6500 exhibitors at around 230 trade fairs abroad are supported each year. The lion’s share of these are small and medium-sized enterprises. The trade fairs that the Federation takes part in are selected in close cooperation with business associations, German missions abroad, German Chambers of Commerce Abroad and AUMA.
Further information is available on the following webpages:
Association of the German Trade Fair Industry: www.auma.de