Eximbank conditions

This information material has been prepared in Hungarian and English, English translation is for information purposes only. In the event of discrepancies between English and Hungarian version, the Hungarian version shall prevail.

Hungarian Export-Import Bank Private Limited Company (“Eximbank”), based on the relevant Hungarian and international statutory regulations, provides medium and long-term credit with budgetary interest support (interest equalisation), while the Hungarian Export Credit Insurance Private Limited Company (“MEHIB”) provides export credit insurance, backed by a payment guarantee from the central budget, to cover non-marketable risks.

In accordance with the statutory regulations related to these two institutions (collectively known as “EXIM”) – specifically, Government Decree 85/1998 (V. 6.) (the “Eximbank decree”) and Government Decree 312/2001. (XII.28.) (the “MEHIB decree”) – a condition for use of the above-mentioned interest subsidy and the export credit insurance provided against the central budget is that the exported goods or service should have a certain degree of Hungarian content.

 

A) EXPORT OF GOODS

In the case of goods export, the regulations stipulate that at least a half of the content of the delivered goods should be of Hungarian origin.

The Exporter must obtain a certificate of origin proving the Hungarian content of the delivered goods from the competent territorial body of the chamber authorised to issue it (Hungarian Chamber of Commerce and Industry – MKIK, National Chamber of Agriculture – NAK) and submit it to Eximbank, and in the case of refinancing, to the financing financial institution, or in the case of insurance, to MEHIB (in the manner prescribed in the insurance contract).

If the business entity conducting foreign trade activity exports goods to the same customer under the foreign trade contract in respect of goods of the same name, customs tariff number and place of origin more than once, in order to prove the Hungarian origin of the goods it is sufficient to obtain a certificate of origin complete with a special clause issued by the competent chamber after the performance of the first export of the goods and send it to Eximbank, and in the case of refinancing, to the financing financial institution, or in the case of insurance, to MEHIB.

If a change occurs in the designation, customs tariff number or place of origin of the goods described in the certificate of origin complete with a clause or in the person of the buyer (customer), the business entity conducting foreign trade activity must obtain a new certificate of origin from the competent chamber for its first export after the change, and must submit it to Eximbank, and in the case of refinancing, to the financing financial institution, or in the case of insurance, to MEHIB

NAK is responsible for products subject to the European Union’s common agricultural policy (CAP), while MKIK is responsible for all other (non-CAP) products.

The rules of origin applied by the chamber body authorised to issue the certificate of origin, available on the website of the authorised chamber body, and the provisions of the chamber procedure with respect to the issuing of the certificate of origin, must be applied to establish and certify the Hungarian origin of the goods.

B. EXPORT OF SERVICES

Compliance with this condition must be substantiated by the Exporter with a certificate issued by the body responsible for registering the insured relationship. Accordingly, in the case of service exports, the verification of the conformity of Hungarian origin is carried out by EXIM on the basis of the EP certificate on the number of insured persons issued by the health insurance administrative body of the territorially competent government office, based on the examination of the insurance status of the staff employed.

In the case of service exports, more than half of the persons employed by the Exporter (or its domestic subcontractor involved in the provision of services) under the rules of the Act on Social Security Benefits and Private Pensions and the Coverage of these Services and on the Small Business Tax must be in a legal relationship with it that involves an insurance obligation.

The submission of the certificate of origin and the fulfilment of the required Hungarian share of origin is a precondition for the disbursement of the loan, the provision of the export credit guarantee and the discounting of receivables, and in the case of insurance, it is a condition of eligibility for such insurance. If an insurance event occurs in relation to which a claim for damages is filed, the insured party shall be obliged to make available to MEHIB an original copy of the certificate of origin. During the claims assessment process following the submission of the claim for damages, MEHIB verifies that the requirement regarding the Hungarian share of origin has been met.

The certificate issued to the insured employees of the business entity providing the service can also be requested electronically through a customer gateway. The electronic form for the certificate is submitted to the National Health Insurance Fund Manager (NEAK, formerly: National Health Insurance Fund, OEP).

C. CONSTRUCTION AND ASSEMBLY CONTRACTS

At least a quarter of the value of the foreign trade contract for construction, assembly, technology-installation and planning services, and for services directly related thereto, less any financing costs, must be classed as an export of Hungarian origin, and the certificate of Hungarian origin with regard to this is issued by the head office of the Hungarian Chamber of Commerce and Industry.

For the details, please consult the Guide for Customers on the procedure for certifying the Hungarian content of goods and services carefully, including Annex 1 of that guide that addresses the regulatory framework with regard to the share of foreign origin.

Pursuant to its environmental policy, it plays a key role to perform risk assessment for projects in order to review their environmental and social risks. Accordingly, the Bank does not support a transaction that has a negative, i.e. adverse environmental impact, or transaction which demonstrably violates fundamental human rights standards or results in significant greenhouse gas emissions. In order to screen these projects at an early stage of financing, the Bank applies environmental and social risk assessment.

 

Process of environmental and social evaluation:

 

Pre-screening – screening and assessment of project whether the transaction falls under the scope of the procedure. Pre-screening is implemented at an early stage of the transaction. During this stage some basic information should be obtained from the exporter.

Transactions outside the scope of the procedure – i.e. project period does not exceed 2 years, and exports of goods / services relate to basic agricultural products and military assets (livestock, cereals, etc.) and where risk is not on the exporter – are not classified but indicated with “K” and are exempted from further steps of the environmental and social risk assessment.

 

Screening – all the information provided by the exporter is reviewed during screening. Screening can only be applied to projects with a risk-taking period of more than 2 years and if the value of the transaction exceeds 10 million SDRs, or if the project is on or near sensitive area or sector, or if it can be assumed that the implementation of the project involves potential environmental risk.

 

Classification – the project is classified into two main categories (new project or existing facility) and three environmental and social risk categories (A – sensitive, B – moderate, C – neutral). Further information can be obtained from the exporter if it is required.

 

Three categories of environmental and social classification:

  • Category A: a project is classified as Category A if it has the potential to have significant adverse environmental and/or social impacts, which are diverse, irreversible and/or unprecedented. These impacts may affect an area broader than the sites or facilities subject to physical works. Category A includes projects in sensitive sectors or located in or near sensitive areas.
  • Category B: a project is classified as Category B if its potential environmental and/or social impacts are less adverse than those of Category A projects. Typically, these impacts are few in number, site-specific, irreversible, and mitigation measures are more readily available.
  • Category C: a project is classified as Category C if it has minimal or no potentially adverse environmental and/or social impacts.

 

Result of the classification may vary flexibly (reclassification) on a case by case basis depending on the scope, depth and timing of the necessary information.

 

Information required for environmental and social risk categories:

  • Category A: Environmental and Social Questionnaire, Environmental and Social Impact Assessment (hereinafter referred to as ESIA) and if it is necessary Human Rights Impact Assessment (hereinafter referred to as HRIA)
  • Category B: Environmental and Social Survey Questionnaire (on a case-by-case basis ESIA)
  • Category C: no further information is needed (on a case-by-case basis ESQ)

 

Assessment – The assessment of the environmental and social impact of the transaction is based on the Questionnaire and all the relevant information and documentation that had been provided previously. In order to be able to perform the appropriate evaluation of projects different kind of information should be obtained depending on the environmental and social category of the project.

 

In order to evaluate the financing of category A, client must provide the ESIA on environmental impacts and documents on mitigating compensatory measures.

 

ESIA may be requested on a case-by-case basis for assessing category B projects which has a moderate impact on the environment, but the classification and evaluation of the project will be implemented based on the outcome of the Questionnaire and the consideration of the relevant environmental impacts.

 

For category C projects, only the result of the evaluation of the Questionnaire and the evaluation of the documents provided will be taken into account as the environmental and social risks of the transaction are negligible. However after evaluating the ESQ additional documents can be requested.

 

Decision – the Bank mainly take into consideration the information for which the customer is responsible when assessing environmental and social impacts. It is the responsibility of the client to be able to provide the necessary documentation, basic and additional information to the Bank. In addition, the Bank may obtain independent information if it is required (e.g. from a funder, other insurer, green organization, etc.).

Based on the outcome of the due diligence, the transaction will be accepted, conditionally accepted or rejected.

 

Monitoring – in case of all project classified as category A, the Bank requires regular ex post reports and related information to be provided during the involvement in the project to ensure that relevant potential environmental and/or social impacts are addressed according to the information provided by applicants during the environmental and social review. If project monitoring is included as a condition in the contract client should periodically provide a monitoring report on the environmental and social impact as long as the Bank is in risk.

The Bank should publish national ECA environmental and other related policy statements or principles and procedural guidance relevant to the implementation of the OECD common approaches.

 

For Category A projects the Bank should disclose publicly project information, including project name, location, description of project (ESIA report, summary) as early as possible during the review process but at least 30 calendar days before a final commitment to grant official support.

 

The Bank is ready to share information between other entities in case of co-financing or other partnerships.

 

The project sponsor is encouraged by the Bank to publish information with regards to the environmental and social impacts. Information related to the transaction shall not be disclosed by the Bank in accordance with business secrecy without the consent of the parties. The Bank considers legal and competition aspects for the protection of business secrets in accordance with the law on publishing environmental information.

 

The Bank provides information on funded projects (A, B, C) for OECD on a continuous basis, but at least in every six months. The Bank prepares reports annually (ex post) on A and B categories projects accepted according to the form and content of the OECD common approaches.

 

At least annually, the Bank ensures the availability to the public – considering the possibilities of national legislation –, all environmental information of categories A and B transactions.

 

In case of category A and B projects, if the provisions of the OECD Common Approaches have been applied, the projects will be reported to the OECD. The OECD annually publishes a summary of these reports on its website. In this manner, this information is made available to the public in an aggregated form. The report can be accessed using the following link: http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=tad/ecg(2017)3/final&doclanguage=en

 

The Bank annually publishes (on its website) the information (project description, technical data, standards, regulatory compliance, etc.) of the accepted environmentally and socially screened projects including categories A, B and C as well.

 

If you have any questions or concerns about the disclosure of environmental data for projects, please contact us at the following e-mail address: csecsei.adam@exim.hu

 

The OECD recognized that it can promote the coherence between the international environmental, climate change, social and human rights policies of the export credits and their commitments of relevant international agreements and conventions, thereby contributing to the sustainable development and the reduction of adverse environmental impacts through the export credit policy.

 

The OECD Common Approaches was developed and adopted in 2003. It established a set of rules for the environmental risk assessment of officially supported export financing. The document contains common practices for identifying and mitigating the environmental impact of projects. In addition to the impact on the environment, there has been an increasing emphasis on assessing social impacts. The OECD has expanded its existing approach with elements on social impact assessment and finalized it in 2012. In 2016, it has been revised which is the current version in use. The OECD Common Approaches aims to develop procedures for assessing the environmental and social impacts of officially supported export financing, to prevent and mitigate the adverse environmental and social impacts of projects, and to create the overall process of financial risk assessment for a supported project.

 

Hungary is being a full member of the ECG decision-making process. In 2001 the country formally declared that it accepts and will implement the common approaches. Accordingly, the institutions dealing with export credit financing and insuring had to integrate the environmental monitoring system, which is being operated according to the OECD Common Approaches. Hungarian legislations related to the Bank contain the condition according to which the environmental screening must be carried out.

 

Related Legislation and Regulatory Documents:

  • Government Decree 85/1998. (V. 6.) on the Interest Equalisation System of the Hungarian Export-Import Bank
  • Government Decree 435/2012. (XII. 29.) on Guarantees Assumed by the Hungarian Export-Import Bank with a State Payment Guarantee and on the Conditions and Detailed Regulations of the Replacement and Interest Costs of Foreign Currency and Interest Swap Transactions
  • Government Decree 312/2001. (XII. 28.) on the terms of the insurance of non-marketable risks by the Hungarian Export Credit Insurance Plc. with a government payment guarantee provided from the central budget
  • Act XLII of 1994 on the Hungarian Export-Import Bank PLC and the Hungarian Export Credit Insurance PLC
  • TAD/ECG(2016)3 recommendation of the council on common approaches for officially supported export credits and environmental and social due diligence (the “common approaches”)
  • Government decree 232/2003 on Tied Aid Loans Disbursed by Eximbank

STANDARD SETTLEMENT INSTRUCTIONS OF MAGYAR EXPORT-IMPORT BANK (HUNGARIAN EXPORT-IMPORT BANK) BIC: HEXI HU HB

as from December 2018

Please find below the List of our correspondents in the main currencies:

Currency: Correspondent Bank: BIC: A/C:
EUR OTP Bank, Budapest OTPV HU HB HU90117820072100478600000000
USD Citibank NA, New York CITI US 33 36119273
GBP Citibank London Branch CITI GB 2L 10393347
HUF Magyar Nemzeti Bank MANE HU HB 19017004 00201483