International Cooperation

The Berne Union and the Prague Club

Since 1999, KUKE S.A. is the member of the Berne Union, i.e. The International Union of Credit and Investment Insurers founded in 1934. The Berne Union promotes uniform principles for export credit and investment insurance establishing also the forum of cooperation among public and private insurance agencies, within organized twice-a-year meetings of all members, ad hoc seminaries and workshops, and within the current exchange of the information and experiences among the insurers. In accordance with the message included in “Value Statement”, members of the Berne Union declare theirs commitment to operate in a professional manner that is financially responsible, respectful of the environment and which demonstrates high ethical values. Internally, the Berne Union activity is bound up with the rules covered by “Guiding Principles”, adopted in October 2008 which duly replaced “General Understanding” and sectoral understandings. The document reflects the main idea of members activity and promoting practices that contribute to sustainable economic growth. Based on this “Guiding Principles”, the detailed and practical guidelines have been worked out and collected in “Operational Guidelines” separately set for investments, medium and long term and short term credits. In the external relations the Berne Union acts as an advocate of its members within the “Berne Union Advocacy”. One of the relevant aspects of this cooperation is the support given to newly established credit and investment insurance agencies within the Prague Club.

The Prague Club was founded in 1993, under the auspices of the Berne Union and among others by the initiative of KUKE S.A. The aim was to work out an information exchange forum for newly established credit and investment agencies as well as encouraging the international trade development in a course of supporting unified rules both for export credit insurances and foreign investments. Members of the Prague Club which aim to participate in the Berne Union, originate in Central and Eastern Europe, Asia and Africa. KUKE S.A. being the member of the Berne Union, still actively participates in the Prague Club meetings.

OECD

Since 1996, KUKE S.A. participates in the meetings of the Organisation for Economic Co-operation and Development (OECD). The main OECD founding objectives were supporting sustainable economic growth and raising living standards. Delegates from the Corporation actively participate in the following working groups, related to medium – and long - term export credits (i.e. for two years or more) supported by the State:

• The Working Party on Export Credits and Credit Guarantees
• The Participants to the Arrangement on Officially Supported Export Credits
• The Working Group of Experts on Premia and Related Conditions
• The Sub-Group of Country Risk Experts.

The rules assumed within OECD related to officially supported export credits should encourage competition for export sales based on the price and quality of the goods and/or services being exported rather than  more favourable cost of official export credit financing. First innovative  set of such rules was adopted in 1978 as Consensus. The OECD Consensus was many times modified to be finally agreed as the  OECD Arrangement on Officially Supported Export Credits, covering regulations determining export credits discipline for member states. In the recent period, within the process of continuing Arrangement unification in the scope of sector understandings ,(Sector Understanding on Export Credits for Civil Aircraft (Annex III) – ASU was the first which was revised and adopted in 31 July 2007), following international market changes, the two  new annexes, i.e. Sector Understanding on Export Credits for Nuclear Power Plants (Annex II) – NSU and Sector of Understanding on Export Credits for Renewable Energies and Water Projects (Annex IV) – RE/WSU, came into force on 1 July 2009. Full text of the OECD Arrangement you will find at www.oecd.org

Apart from export credit financing regulations supported by the State, other  initiatives regarding international trade are raised by OECD members, as for  example  environmental protection issues along with combating bribery of foreign public officials in international transactions and sustainable lending dedicated to low income countries. More information on OECD activities, you will find in our current offer of insurance products.

Cooperation with export credit insurance agencies

Regardless of activity on international forums, KUKE S.A. cooperates with export credit i agencies based on bilateral cooperation agreements as well. Such agreements facilitate common activities of insurers concerning projects carried out jointly by exporters from states that are parties to the agreement and realized in the market of a third party. Mutual cooperation agreements also facilitate the sharing of information on entities based in Poland as well as the partner country. The Corporation has signed cooperation agreements with the following export credit insurance agencies:

Cooperation concerning reinsurance of medium- and long-term credits

Facing needs of Polish exporters, the Corporation cooperates with export credit agencies concerning mutual reinsurance of medium- and long-term credits. The bilateral cooperation enables reinsuring  credits financing Polish deliveries included in large-scaled export project which is insured by partner agency, with whom the reinsurance agreement was signed. The agreements signed by the Corporation are based on reciprocity. Reinsurance enables covering part of deliveries which are performed by the same country of origin as partner export credit agency.

This kind of cooperation means for both sides easier and quicker insurance procedures due to  the following aspects:

• new and simpler project financing solutions which enable to apply uniform terms of payment for goods delivered by Polish and foreign exporters,
• one insurance policy instead of two policies issued by both export credit agencies.

In the light of reinsurance agreements signed by KUKE S.A., cooperation in this aspect is possible with the following export credit insurance agencies:

Cooperation within the European Union

Within the European Union, the Corporation participates in the meetings of the Council Working Group on Export Credits (CWG Group), which was set up by the Council Decision in 1960. The main objective of the CWG Group is putting forward suggestions for the harmonization between Member States of terms and conditions for export credit insurance, financial credits and investment guarantees, as well as promoting exchange of information in this field of interest and encouraging consultation on all concrete problems. Simultaneously, the CWG Group stands for the significant forum of coordinating the positions of the Member States within international organizations.
Most of the EC legislation in the field of export credits consists of texts which have been elaborated within the framework of the OECD (above all - Agreement on Officially Supported Export Credits, i.e. OECD Consensus). The most important internal legislation on export credits in the EC is the Directive on harmonization of the main provisions concerning export credit insurance for transactions with medium and long-term cover of 7 May 1998.

Cooperation within the Credit Alliance

The Credit Alliance network affiliates export credit societies, business intelligence agencies, rating firms and debt collecting agencies from ca. 100 countries for which the strategic objective is to support export credit insurance through the exchange of the information on risk assessment. Maintaining their commercial and insurance autonomy, partners work out the common insurance and reinsurance strategy. Credit Alliance partners sharing experiences exchange also the information about economic entities which database covers over 50 million entities from all the continents. As a founding member KUKE S.A. is the Credit Alliance network partner since 1994.