New Act on EKF future-proofs Danish export credits
On 1 July 2016 a new legal base applies to EKF Denmark’s Export Credit Agency. Under the new Act EKF will be converted to an independent public company providing EKF with a strengthened and future-proofed basis for helping Danish export companies.
The new Act will not change the purpose of EKF which is to continue to facilitate Danish companies' export and internationalisation opportunities. However, the Act modernises and updates EKF’s legal basis adapting it to the current as well as the future expected tasks of EKF.
Export credits have developed considerably since EKF’s previous legal basis was laid down in 1999, especially in the wake of the financial crisis. The development in export credits with a sharp increase in demand and several new solutions was not reflected in the previous Act.
At the same time, the Danish state has introduced a new state ownership policy that applies to EKF. This is the background for the conversion of EKF to an independent public company.
”At first, the new Act will not mean significant changes for EKF’s customers and partners. It will be business as usual. However, in the long term the new Act makes it easier for EKF to continuously adapt to changes in the market and develop financing solutions if/when the need arises. In this way the Act ensures that EKF also in future can help Danish companies in the best possible way”, says Anette Eberhard, CEO at EKF.
EKF’s new Board of Directors begins its service on 1 July with Christian Frigast as new Chairman and Dorrit Vanglo as Deputy Chairwoman. The Board of Directors will consist of six members from the business community appointed by the Minister for Business and Growth as well as two employee representatives elected by EKF’s employees, thus EKF will no longer have civil servants on its Board of Directors.
In the new Act the separation between the business responsibility and the political responsibility for EKF’s activities is somewhat clearer, but EKF is still very much a part of the Danish state and one of Denmark’s most important export promotion tools.
EKF’s state guarantee is more explicitly expressed in the new Act. This is essential to the banks who are EKF’s most important partners. Basically it means that credits guaranteed by EKF are still attractive to banks as EKF’s guarantees continue to be zero-weighted in the bank’s balance sheet, and in this way the guarantees do not affect the regulatory capital requirements of the banks negatively.
Furthermore, with the new Act EKF changes its name from Eksport Kredit Fonden to EKF Denmark’s Export Credit Agency.