Finnvera seeks to safeguard the competitiveness of Finnish enterprises in export markets by offering them export and project financing at rates comparable to those offered by our main commercial rivals to their export companies. Our clientele comprises both companies and domestic and international banks and financial institutions.
For granting export credit guarantees, countries are classified into eight categories. The classification is based on methods used by export credit agencies and on country risk assessment. Various factors affect the determination of the country category: assessment of the country's ability to manage its external liabilities; expectations of the future trend of the country's economy; and political stability and the legislative framework.
Since there may be considerable differences between individual countries, even within the same category, risk-taking is based on Finnvera’s country-specific guarantee policy.
We monitor the economic and political situations of countries and make adjustments to country categories depending on the changes that have occurred. The category of each country is checked at least once a year.
Political risks are related either to the country of a foreign buyer or borrower, or to a third country which can cause the exporter, investor or financier to incur a credit loss. Political risks include restrictions on transfer of the credit currency, rescheduling of debts, expropriation, and war or insurrection.
Sovereign risk is caused by an entity that represents the full faith and credit of State. In most cases this is the Ministry of Finance or the Central Bank.
When Finnvera covers only the political risks involved, the commercial risks associated with the buyer, the borrower or the guarantor are not covered.
Political risks are assessed by continuously following the creditworthiness of the countries with political risk. The term political risk refers to all factors or events which influence the country's economy, internal stability and international relations.
Political risk may materialise as the consequence of a long course of events, or may result from internal or external economic and political shocks. Political risks are assessed according to the following criteria:
Commercial risks arise from foreign banks, companies or project companies. Typical commercial risks include the buyer's, borrower's or guarantor's insolvency or unwillingness to pay its debt.
Factors considered assessing of the commercial risks of the transaction include:
- export transaction/project
- line of business
- environmental aspects
- buyer's country
- other aspects involved, if any
Further information about commercial risks
- Corporate/buyer risk
- Project risk
- Bank risk
The country policy described is indicative only. Finnvera reserves the right to set additional conditions regarding any particular country, buyer, or bank as well as change the percentage of cover for a transaction. Finnvera assumes no liability to issue a guarantee to any specific transaction. We recommend that you contact our country policy and export credit guarantee advisers prior to making an offer for financing a transaction with intended guarantee support from Finnvera.
Finnvera's country policy determines
- Finnvera's risk-taking in the country
- securities and payment condition requirements
- the acceptable maximum risk period
Finnvera classifies countries into seven categories. A country's category for short-term and medium/long-term guarantees may be different.
A number of international rules and agreements regulate export credit guarantee activities. The purpose of the rules is to make sure that countries do not compete by means of officially supported export credit terms. Close international co-operation is of vital importance to Finnvera in order to adhere to and to develop the regulatory framework.
International export credit co-operation between nations is carried out in the OECD and the EU. The OECD Arrangement on Officially Supported Export Credits is the most important international agreement regulating export credit operations. The EU rules strive to create a level playing field for all exporters in the EU countries.
The Berne Union is the international professional association of export credit agencies, which provides a forum for extensive exchange of information and promotes sound principles of export credit and investment guarantee activities.
The OECD groups 30 member countries sharing a commitment to democratic government and the market economy.
With active relationships with some 70 other countries, NGOs and civil society, it has a global reach. Best known for its publications and its statistics, its work covers economic and social issues from macroeconomics, to trade, education, development and science and innovation.
The European Union Directive aimed at harmonising medium/long-term guarantee activities came into force in June 1998. The Directive strives to provide equal guarantee terms throughout the EU and thus equal competition possibilities for export products, where the related finance terms do not constitute a competitive edge. The Directive encompasses rules for guarantee conditions, guarantee premiums, country policy and notification procedures. As to guarantee premiums and country policy, the Directive observes the OECD's Premium Agreement.
An updated EU communication based on the EU competition rules concerning short-term (risk period less than 2 years) export credit guarantee activities came into force in the beginning of year 2013. Previous version of the communication has been effective since 1997. The communication denies official export credit agencies from cover marketable risks, which are risks that private insurance companies are willing to cover. According to the Communication, Finnvera cannot grant guarantees with a risk period less than 2 years (manufacturing period + repayment period) to the following markets:
- EU countries (Austria, Bulgaria, Belgium, Croatia, Cyprus, Czech Republic, Denmark, Estonia, France, Germany, Greece, Hungary, Italy, Ireland, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom)
- Australia, Canada, Iceland, Japan, New Zealand, Norway, Switzerland, USA
Exceptions to EU communication's principles:
- Special permission to insure short-term exports to the above-mentioned countries in 2013-2020 (link below)
- European Commission's decision to remove Greece from the country list above
In the case of these so-called “marketable risk countries”, the EU rules on transactions with a risk period of under two years only apply to conventional credit insurance for covering buyer risks, not guarantees for bank risks. If the payment method is a letter of credit and the guarantee used is a Letter of Credit Guarantee or some other guarantee where the risk applies to a bank, Finnvera may, under the risk-sharing principle, consider granting a guarantee for said countries.
Finnvera is a member of the Berne Union (International Union of Credit and Investment Insurers). Berne Union is the international association for export credit and investment insurance worldwide, with over 50 members from over 40 countries.
BU aims at developing export credit and investment insurance activities mainly based on extensive professional exchange of information among its members.
The BU members have committed to guiding principles reflecting their way to conduct their business and pursue the purpose of the BU. More information about the Berne Union and the Guiding principles can be found from the association’s website.
Co-operation between guarantee agencies becomes significant in situations where export companies have production operations in more than one country and when an export project includes deliveries from exporters in different countries.
Finnvera has concluded co-operation agreements with various guarantee agencies. These agreements form the basis for co-operation in individual projects, but they are not a necessary condition for co-operation - Finnvera may be involved in mutual projects although such a bilateral agreement does not exist.
The simplest method for involvement in projects including exports from many countries is to include the foreign deliveries in the guarantee issued by Finnvera.
Joint guarantee and reinsurance arrangements
Joint guarantee and reinsurance arrangements are practical in large-scale projects or projects involving risky markets.
In a joint guarantee, each agency covers its own national share according to their guarantee terms, and co-operation takes place mainly in the form of exchanging information.
In a reinsurance arrangement, the principal insurer is the guarantee agency in the country from where the largest share of exported share is supplied. The main insurer creates a guarantee contract for the project as a whole, and then draws up a reinsurance contract with the guarantee agency in the subcontractor's country. The subcontractor's guarantee agency usually accepts the guarantee terms of the main insurer to a large extent.
Finnvera has co-operation or reinsurance agreements with the following organisations:
- Austria - OeKB
- Belgium - ONDD
- China - China EximBank
- China - SINOSURE
- Czech Republic - EGAP
- Denmark - EKF
- Estonia - KredEx
- France - COFACE
- Germany - EULER HERMES
- Great Britain - ECGD
- Iran - EGFI
- Iran - OIETAI
- Italy- SACE
- Japan - NEXI
- Luxemburg - ODL , Northstar
- Meksiko - BANCOMEXT
- Multilateral - CABEI
- Multilateral - EBRD
- Multilateral - IIC
- Multilateral - MIGA
- Netherlands - ATRADIUS
- Norway - GIEK
- Russia - Vneshekonombank / Eximbank of Russia
- Singapore - ECICS
- South-Korea - KEIC
- Sweden - EKN
- Switzerland - SERV
- USA - EX-IM BANK
- USA - OPIC
- USA - Steadfast Insurance Company
Export credit guarantees and financing of export credits can be granted for transactions that fulfil a requirement of Finnish interest. Finnish interest is demonstrated if the Finnish content is significant. Finnish content is considered significant when it is at least 27 % of the export transaction’s value (including local cost) or 33 % or more of the export credit.
In case the transaction based Finnish content requirement is not fulfilled, exporters need to demonstrate the Finnish interest otherwise e.g.
- The average Finnish content of the export transactions concluded in the previous year or the average Finnish content of the companys’s production is 27 % or more.
- The exporter is a SME striving for growth and internationalization.
- The export transaction is based on deliveries a from a number of countries and there is no clear prime exporter.
- A subsidiary of a Finnish company cannot get export credit guarantees from the country where it is located.
- The transaction is based on risk sharing.
- A transaction containing low Finnish interest may boost further sales with a higher Finnish content (customer relationship).
- The activities of the exporter as a whole bring considerable economic benefits to Finland.
When financing exports, Finnvera considers environmental and social impacts as part of the overall risk assessment of the projects financed.
In November 2016, Finnvera’s Export Financing updated its policy concerning the review of projects.
The following principles guide Finnvera’s export financing in environmental and social issues:
- Environmental impacts as part of the overall risk assessment of projectsWhen export credit guarantees are granted and their terms and conditions are confirmed, attention is paid, among other things, to environmental and social impacts as part of the overall risk assessment of the project.
- Cooperation among export credit agencies in environmental and social issuesFinnvera contributes actively to discussions between export credit agencies (ECAs) and participates in working groups seeking common approaches to environmental and social issues. Finnvera supports international efforts to create common rules for export credit agencies so that exporters from all countries would be ensured a level playing field in this respect.Finnvera adheres to the Recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence adopted by the Organisation for Economic Co-operation and Development (OECD).
- Other International agreements and frameworksThe OECD Recommendation is also grounded in the following international agreements and frameworks: the UN Guiding Principles on Business and Human Rights; the ILO Declaration on Fundamental Principles and Rights at Work; the UN Framework Convention on Climate Change; and the OECD Guidelines for Multinational Enterprises.
- Continuous improvementFinnvera’s policy for reviewing the environmental and social impacts of projects is under constant development. International competition factors, the development of environmental and social issues pertaining to export financing, and Finnvera’s own experiences are taken into account in planning. Finnvera trains its personnel to identify environmental and social aspects and to assess the related risks. Relevant information and lessons from individual projects are exchanged among experts within Finnvera.
Attachments: OECD Common Approaches
In line with the OECD Recommendation, this policy applies to all export financing products provided by Finnvera where the accompanying credit has a repayment term of two years or more.
This policy excludes Environmental Guarantees handled by the Large Corporates unit, Finnvera Guarantees, Finance Guarantees and Bond Guarantees, as well as guarantees pertaining to military equipment or agricultural commodities.
Guarantees pertaining to shipyards and shipping companies that operate in accordance with the requirements of EU legislation or similar legislation are assessed in Finnvera whenever necessary. However, the assessments and reviews conducted and, for instance, any environmental permits granted must be submitted to Finnvera, if necessary.
Raw Material Guarantees are included in the scope of the policy. Raw Material Guarantees are granted by virtue of the Act on State Guarantees for Ensuring the Supply of Basic Raw Materials. For Raw Material Guarantees, environmental and social issues are determined separately for each project.
In a reinsurance situation where Finnvera agrees on reinsurance with the original insurer, Finnvera’s project review can be conducted on the basis of the assessment made by another export credit agency, a major multilateral financial institution participating in the financing, or the original insurer. The precondition is that the assessment is comprehensive enough.
In general, Finnvera’s project review encompasses the whole project even when export financing is granted only for a part of the project or for an individual delivery of equipment that is associated with a project.
Project-specific information searches are conducted to determine any environmental and social risks associated with Credit Risk Guarantees that are applied for to cover pre-delivery risks. Whenever necessary, applicants for export financing are asked to provide additional information.
The concessional credits granted by the Ministry for Foreign Affairs are always accompanied by Finnvera’s export credit guarantees. However, the Ministry’s Department for Development Policy is responsible for the review of the environmental and social impacts of these projects and for the related costs. The Ministry for Foreign Affairs determines the object and scope of the review required.
Screening, classification and review of projects
The purpose of screening is to identify the applications falling within the scope of Finnvera’s project review. The application is reviewed if it pertains to a project. The level of potentially negative and positive environmental and social impacts is identified during the screening and classification of projects. This information is then used to determine the appropriate scope of review and the project category.
Finnvera encourages parties who apply for export financing and carry out projects, whenever possible, to make available information about the environmental and social impacts of projects and about the monitoring of these impacts.
A prerequisite for granting financing for Category A projects is that the information on environmental and social impacts is published 30 days before Finnvera signs the agreement on export financing. The relevant parties are requested to give their consent to publication.
In Category A projects, the international ESIA practice generally requires that information on environmental and social aspects is disclosed locally. Finnvera’s website contains a link to the Internet address where the ESIA report or its summary can be accessed. The scope of the information disclosed varies, depending on the project. It may also be agreed that the information is given in some other manner.
In addition, the following basic data on the project are published on our website:
- the name and location of the project;
- a description of the project; and
- the project category (A).
Feedback given by stakeholders is collated and its contents can be reviewed in the event that the feedback brings out some new, important aspect of the project. If necessary, it may be agreed that any questions posed by stakeholders are passed on, for instance, to the party applying for export financing.
In addition, in line with the OECD Recommendation, at least once a year Finnvera makes available to the public information on projects classified in Category A and Category B for which it has made a commitment during the year. The information made available on Category A projects is the same as in the above case of advance publication, supplemented with more detailed information on export financing. A brief summary is drawn up of the main environmental and social aspects of Category B projects. This includes information on the background material and international standards used for the review, and the contact information for the export credit agency. For both Category A and Category B projects, the relevant parties are requested to give their permission to disclose the information.
The requirement for disclosure of information may be waived for exceptional reasons (see the OECD Recommendation).
Finnvera publishes basic information on medium-term and long-term (two years or over two years) transactions when the principal guaranteed by Finnvera is over EUR 10 million or when a project is in categroy A (having potentially significant adverse environmental and/or social impacts).
The information includes:
- Guarantee holder/ Lender
- Buyer's country
- Exported goods/ Project
- Guaranteed principal amount
- Credit period
- Project classification
- Source of environmental and/or social impact information (projects in category A)
- The date of publication of environmental and/or social information
According to the OECD’s Recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence Finnvera also publishes environmental and/or social impact information on category A projects before the guarantee agreement is signed. This information can be found from page Guarantee offers for projects in category A.
The practices as regards publishing information have been renewed and adopted in January 2013. Consequently, the information published in previous years can differ from the information published since 2013.
According to the OECD’s Recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence Finnvera shall publish environmental and social impact information on category A projects, which possibly may have significant adverse environmental and/or social impacts. The information shall be published when the guarantee still is an offer, at least 30 calendar days before Finnvera signs the financing agreement. After the agreement has entered into force the information is transferred with the relevant parties’ consent to the Guaranteed Transactions -page.
Offers regarding projects in category A to report.
Buyer's country: Republic of Panamá
Exported goods/Project: Raw material guarantee
Project classification: A
Information published: 19 January 2018
Environmental and/or social impact information on Project in category A:
ESIA summary (PDF)
Should you need more information, please send questions to this email address:
Buyer's country: Australia
Exported goods/Project: Container handling equipment
Project classification: A
Information published: 19 August 2015
Environmental and/or social impact information on Project in category A: