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Act No. 58/1995 Coll

Wording valid as from 4 September 2009
Act No. 58/1995 Coll.

on Insurance and Financing of Exports with State Support
and on Supplement to Act No. 166/1993 Coll.,
on the Supreme Audit Office, as amended

The Parliament has passed the following Act of the Czech Republic:

PART ONE
INSURANCE AND FINANCING EXPORTS WITH STATE SUPPORT
§ 1

1. This Act regulates the state support of exports provided in the form of export credit risk insurance, officially supported financing and equalisation of interest differences in accordance with the law of the European Communities1) and obligations arising from the membership of the Czech Republic in the World Trade Organization.1).
2. For purposes of this Act, export credit risk insurance is understood to mean:
   1. insurance of short-term export credits against non-payment resulting from political or combined political and non-marketable commercial risks,
   2. insurance of long-term export credits and credits for the investment against non-payment resulting from political or combined political and non-marketable commercial risks, or non-payment resulting from non-marketable commercial risks,
   3. insurance of investments in foreign countries against political risks, in particular against the risk of prevention of transfer of returns on investment, expropriation, or politically motivated violent damage,
   4. insurance against losses of exporters and investors related to the preparation and carrying on of business activities,
   5. insurance of credits extended to a producer or to an exporter to finance production designated for export against the risk of non-payment of the credit resulting from the inability of the producer or exporter to fulfil the conditions of the export contract,
   6. insurance of bank guarantees or other services extended by the bank of an exporter on behalf of the exporter to a foreign entity against the risk of the exporter's non-performance of its contractual obligations under the export contract,
   7. insurance of risks of exchange rate loss of the Czech crown against foreign currencies arising at the time of payment of an insurance claim due to the difference in the exchange rate valid at the time of conclusion of the insurance contract and the exchange rate valid at the time of payment of the insurance claim,
   8. reinsurance activity2) of foreign credit insurance companies related to insurance provided under letters a., b., and f. in connection with the participation by an exporter in the deliveries of goods or provision of services to an importer made by a foreign entity, up to the extent of the exporter's share in such deliveries,
   9. reinsurance activity towards credit insurance companies in relation to the insurance of the export against non-marketable political and non-marketable commercial risks,
   10. insurance and reinsurance of credits to small- and medium-sized entrepreneurs with permanent residence or registered office on the territory of the Czech Republic.
3. For purposes of this Act, officially supported financing is understood to mean short-term and long-term financing and provision of export credits, credits for the financing of the production for export, credits for investment and for project financing, and short-term and long-term providing of export-related financial services under the provisions of this Act in the form of
   1. refinancing credits to the bank of an exporter for financing of export, to the bank of an exporter and to the bank of a producer for the financing of production for export, to the bank of an investor for the financing of an investment, to the bank of an exporter for project financing and direct credits to an exporter, to a foreign company or to a foreign entity for the financing of export, to an exporter and to the producer for the financing of production for export, to an investor for financing of an investment and to an exporter for project financing,
   2. export-related financial services which include, in particular
      1. bank guarantees,
      2. opening of letters of credit and system of payments and clearing,
      3. hedging operations,
      4. financing of local costs in the country of the importer's registered office or permanent residence.
4. for purposes of this Act, the equalisation of interest differences is understood as topping up the difference between the interest determined by the fixed interest rates for export credits extended by the exporter's bank in compliance with the law of European Communities with international rules regulating officially supported export credits (hereinafter the "international rules") with maturities of at least 2 years and exporter's of bank costs of raising funds for these credits on financial markets at the level of rates of the inter-bank market increased by a predetermined commission for the exporter's bank. The interest rate differences are equalised by transferring this difference to the exporter's bank from the state budget or by transferring the surplus by the exporter's bank into the state budget.

§ 2
Definition of terms

For purposes of this Act, it is understood that:

1. the investor's bank is the bank, the branch of a foreign bank or the financial institution1b), which extends a credit to the investor or to a foreign entity,
2. the producer's bank is the bank, the branch of a foreign bank or the financial institution1b), which extends a credit related to the production of goods or the provision of services designated for subsequent export to the producer,
3. the exporter's bank is the bank, the branch of a foreign bank or the financial institution1b), which extends a credit related to export to the exporter or to a foreign entity,
4. a supplier credit is the granting of a time deferral between the fulfilment of an exporter's obligation and the obligation of an importer to pay to the exporter for the fulfilment by the exporter of his obligations to the importer in accordance with the terms of an export contract,
5. an importer is a foreign entity, which carries out the import from the Czech Republic,
6. financing of the production for export is the financing of the development or production of goods and services before their export has been carried out,
7. financial services connected with export are activities carried out by the Česká exportní banka, a.s. - Czech Export Bank, a.s. (hereinafter the "Export Bank") on the basis of a banking license granted in accordance with a separate Act1b), which relate to the export
8. financial markets are domestic and foreign money and capital markets,
9. financial resources are financial funds obtained primarily through the issuance of bonds, sale of bonds or on the basis of credit contracts,
10. export value is the price agreed upon in an export contract,
11. an investment means financial funds or other contributions, which can be assigned a monetary value, or ownership rights expended for a period of at least 3 years by a legal person with the registered seat on the territory of the Czech Republic, and who is an entrepreneur pursuant to the Commercial Code, or a foreign company for the purposes of establishing, acquiring or increasing its ownership participation in a legal person with its registered seat outside the territory of the Czech Republic or for the purposes of expanding the business activities of this legal person,
12. an investor is a person realizing an investment who is a legal person with the seat on the territory of the Czech Republic and who is an entrepreneur pursuant to the Commercial Code or a foreign company,
13. capital markets are domestic and foreign markets, on which the maturity of offered financial resources exceeds 1 year,
14. commercial risk is the risk of non-payment of a receivable from an export credit by a foreign private debtor due to his insolvency or unwillingness to pay (protracted default),
15. local costs are expenses for services and goods, which are necessary to outlay in the country of the final destination of an export in accordance with an export contract or a contract between an importer and a foreign entity for either carrying out of an export or the completion of a project or work, in which an exporter is participating in connection with an export contract; they shall not be financed under conditions that are more favourable than those, under which the export contract will be financed,
16. a buyer credit is a credit extended for the financing of an export contract under a credit contract concluded between a bank, a branch of a foreign bank or a financial institution1b) as a creditor and a debtor,
17. other operations are operations related to an acquisition of financial resources to ensure liquidity of the Export Bank, including hedging operations,
18. outstanding insurance commitments is the sum of the value of insured export credit risks from concluded insurance contracts at their nominal value, including interest and contractual fees, and from reinsurance activity reduced by the value of risks, which had expired, and of values of insurance promise contracts in the amount of 50 % of their nominal value,
19. project financing is the extension of a credit, which is repaid from revenues and income of a foreign entity established for the purpose of implementation of a project,
20. a direct credit is a credit granted by the Export Bank to the producer, exporter, investor or to a foreign entity,
21. a refinancing credit is a credit granted by the Export Bank to the bank of a producer, the bank of an exporter or the bank of an investor,
22. an export contract is a contract concluded by and between the exporter and the importer on export of goods or services, or on export of goods and services,
23. political (territorial) risk is the risk of non-payment of a receivable from an export credit due to extraordinary and accidental events in the country of destination of deliveries or in the country, from which the settlement of the receivable is to be made, or in a third country, as are unwillingness to pay of a public debtor, a decision of a third country, prohibition of payments (moratorium), impossibility of or delay in the transfer of funds, a decision of authorities in the country of the debtor, a decision of authorities in the country of an insurer or of an insured and events constituting force majeure,
24. non-marketable commercial risks are commercial risks, which cannot be reinsured on the market for private commercial credit reinsurance on terms offered usually on the international markets,
25. a public debtor is a person who has been authorized with the execution of the state power or public administration who cannot legally be declared as being incapable of fulfilling his obligations, other persons are deemed to be private debtors,
26. a producer is a person who produces goods or provides services designated for a subsequent export, who is either a natural person with the permanent residence on the territory of the Czech Republic or a legal person with the registered seat on the territory of the Czech Republic and who is an entrepreneur pursuant to the Commercial Code or a foreign company,
27. an exporter is a person realising the export who is either a natural person with the permanent residence on the territory of the Czech Republic or a legal person with the registered seat on the territory of the Czech Republic, who is an entrepreneur pursuant to the Commercial Code,
28. an export means a delivery of goods or provision of services or a delivery of goods and provision of services to an importer pursuant to the export contract for the purpose of their use outside the territory of the Czech Republic,
29. an export credit is a supplier credit and a buyer credit,
30. a foreign entity is a natural person who has no permanent residence on the territory of the Czech Republic or a legal person who has no registered seat on the territory of the Czech Republic,
31. a foreign credit insurance company is a foreign entity providing credit insurance with the support of a member state of the Organization for Economic Co-operation and Development,
32. hedging operations are operations leading particularly to the reduction of currency, interest and other risks
33. a bank guarantee is a guarantee issued by a bank or by a savings and credit cooperative,
34. a foreign company is a legal person with the registered seat abroad who is controlled by a legal person having its registered seat on the territory of the Czech Republic and who is an entrepreneur pursuant to the Commercial Code, and who participates - directly or indirectly - in the basic capital of the Company by more than 50 %, or who controls the majority of voting rights related to the participation in the basic capital of the Company, or who can appoint a majority of members of the Board of Directors, Supervisory Board or other similar managing body of the Company,
35. a credit for the investment is a credit for acquisition of the investment or a credit for operation of the foreign company extended by the investor's bank.. .

§ 2a

Provisions of this Act related to banks are similarly applicable to savings and credit cooperatives.

§ 3
Conditions for Export Credit Risks Insurance an for Provision of Officially Supported Financing

1. When insuring export credit risks and providing officially supported financing, the risk of repayment of the export credit is assessed with regard to the creditworthiness of the foreign entity having the position of a debtor and of the country, from which the settlement of the receivable is to be made or to which the investment is directed; when extending credits and issuing bank guarantees, the risk of re-payment is assessed, in particular, the creditworthiness of the debtor and the ability of the exporter to meet the terms of the export contract.
2. Provision of officially supported financing is subject to arranging a loan security in accordance with § 8 (5), unless insurance of export credit risks insurable by Exportní garanční a pojišťovací společnost, a.s. - Export Guarantee and Insurance Corporation (hereinafter the "Export Insurance Company") has been arranged in accordance with § 1 par. 2.

§ 4
Insurance of Export Credit Risks

1. The provision of insurance of export credit risks is assigned to the Export Insurance Company. A precondition for the provision of insurance of export credit risks is that the State shall be the sole shareholder of the Export Insurance Company and shall exercise its shareholder rights through the ministries. Unless stipulated otherwise by this Act, provisions of a separate act regulating insurance industry3) apply to the Export Insurance Company. Apart from the requirements stated in the Commercial Code, Articles of Association of the Export Insurance Company must contain prohibition on granting employees approval to carry out business or other form of profit-making activities coincident to the business activities of the Export Insurance Company.
2. The Export Insurance Company must not establish any legal persons or acquire any equity stake in legal entities, with the exception of:
   1. the Export Bank,
   2. an acquisition of an interest in a legal person which is a debtor, however only for the period necessary to ensure recovery of receivables from the debtor,
   3. a legal person having as its line of business insurance and reinsurance activity in the class credit insurance and activities connected with the insurance or reinsurance activity pursuant to the separate act regulating insurance industry3), with the exception of insurance pursuant to this Act; a prior consent of the Ministry of Finance is necessary for establishment of such legal person. The official support of export pursuant to this Act shall not apply to this legal person.
3. Funds for export credit risk insurance shall be made up of allocations from the distribution of profits of the Export Insurance Company and by subsidies from the State budget designated for the creation of such funds. The subsidies from the State budget shall be provided in dependence on the development of outstanding insurance commitments and they shall become a permanent part of these funds. Reserves shall be created in compliance with separate legal regulations governing the creation of reserves for insurance companies and for the purpose of determining the basis for income tax5a), while the Export Insurance Company shall create a separate equalization reserve for insurance of export credit risks according to § 1 par. 2. The Export Insurance Company shall manage these funds and reserves separately from other provisions and funds.
4. When insuring export credit risks, the Export Insurance Company shall submit the basic economic parameters of individual newly introduced types of export credit risk insurance to the Ministry of Finance for its approval, particularly their business plans; at the same time, it shall ensure economically prudent use of subsidies from the State budget and of the State guarantee.
5. The Export Insurance Company must not accept for insurance export credit risks which would exceed its insurance capacity. The insurance capacity is understood as the upper limit of outstanding insurance commitments from concluded insurance contracts and insurance promise contracts, by which the Export Insurance Company can be contractually bound for the period ending at the end of a given calendar year. The State budget for the given year shall set out the amount of the insurance capacity of the Export Insurance Company as well as the amount of the subsidy from the State budget for an addition to insurance funds. The Ministry of Finance shall set out in a legal regulation the procedure for calculating insurance capacity, which shall be based on the total value of export credit risks covered by valid and by processed insurance contracts and insurance promise contracts, on expected additions to the insurance funds from the distribution of profits, on changes in the technical reserves of the Export Insurance Company and a breakdown of the insurance contracts and insurance promise contracts already in existence and those being processed by the degree of risk.
6. The Export Insurance Company may insure individual export credit risks of up to 20 per cent of the insurance capacity as it was set for the year, in which the insurance of the given risk is arranged With the consent of the Minister of Finance and the Minister of Industry and Trade, the Export Insurance Company may insure an individual export credit risk of up to 40 per cent of the insurance capacity. Individual credit risks exceeding 40 per cent of the insurance capacity may be insured by the Export Insurance Company with the consent of the Government.
7. The Ministry of Finance shall set out in a legal regulation the procedure for the creation of the funds mentioned in paragraph 3, the ratio between the amount of reserves and funds mentioned in the par. 3 and the amount of outstanding insurance commitments, and the Export Insurance Company's share in the claims paid utilizing these reserves and funds. For insurance transactions with an extraordinary high insurance risk, the Ministry of Finance shall stipulate by a legal regulation differently from the determination of the ratio mentioned in the first sentence, the ratio between the amount of reserves and funds as mentioned in paragraph 3 and the amount of outstanding insurance commitments and the Export Insurance Company's share in the claims paid from these provisions and funds. The extraordinary high insurance risk for the purposes of this Act is understood as normally uninsurable insurance risk5b) arising from political and combined commercial and political risks and the risk of non-payment of the credit as a result of inability of a producer or exporter to fulfil terms and conditions of an export contract in which there is national economy interest of the state in its fulfilment.
8. Annually, the Export Insurance Company shall submit information regarding export credit risk insurance to the Chamber of Deputies of the Parliament of the Czech Republic. This information shall contain, in particular:
   1. data on the Export Insurance Company, primarily its registered capital, changes in the composition of ministries exercising shareholder rights of the State, changes in the composition of its Board of Directors and Supervisory Board, and, further, the balance sheet of the Export Insurance Company,
   2. data on providing export credit risk insurance, primarily an analysis of this insurance, including a breakdown by territory and sector, the use of funds received from the State budget, further, data on the relationship between demand for this insurance and the insurance capacity of the Export Insurance Company, as well as data on expected development of this insurance.

§ 5
Particulars of an Application for Export Credit Risk Insurance

1. An application for export credit risk insurance related to a particular export transaction shall be submitted to the Export Insurance Company by the exporter, producer, investor, bank of the producer, Export Bank, or by the exporter's bank (hereinafter the "Applicant").
2. The Applicant is obligated to specify in the application for insurance of export credit risks at least:
   1. own identification data6),
   2. the value of own net business assets and the composition of business associates,
   3. the characteristics of the export and its volume, the expected share of the value of the export, which will be produced in the Czech Republic, the expected amount of the export credit, payment terms and the schedule of drawings and repayment of the extended credit, and the extent of any bank guarantee or of other banking services, which are being provided in connection with the export,
   4. data on the foreign entity, to which the export credit is being extended, especially its identification data6), data on its economic position and credit history,
   5. further data specified in the insurance conditions of the Export Insurance Company.
3. On the basis of the submitted application for export credit risk insurance, the Export Insurance Company and the Applicant may conclude an insurance contract7), and if no export contract has been negotiated yet, an insurance promise contract8).
4. There is no legal entitlement to export credit risk insurance.

§ 6
Officially Supported Financing

1. The provision of officially supported financing is assigned to the Export Bank. It is a condition for the provision of officially supported financing that at least two thirds of the shares of the Export Bank be owned by the State, with the remaining part owned by the Export Insurance Company. The State exercises its shareholder rights through the relevant ministries. Unless stipulated otherwise in this Act, provisions of a separate Act regulating bank industry9) shall apply to the Export Bank. Apart from requirements stated in the Commercial Code, Articles of Association of the Export Bank must contain,:
   1. provisions on preferential use of profits for additions to funds for ensuring the operations of the Export Bank,
   2. prohibition on granting employees approval to carry out business or other profit-making activities coincident to the business activities of the Export Bank.
2. The Export Bank shall provide officially supported financing under § 1 par. 3 and carry out related activities in compliance with the banking license granted pursuant to a separate Act1b). The Export Bank shall provide officially supported financing under terms and conditions, which are standard on international markets for officially supported export credits and for export-related financial services8a). The Export Bank shall acquire funds needed for officially supported financing primarily on financial markets. The Export Bank shall cover the costs connected with providing officially supported financing primarily from a part of the interest income remaining at its disposal in the amount equal to the fixed margin of 100 basis points from the interest rate used for the provision of officially supported financing.
3. The Export Bank must not hold any interest in legal persons with the exception of:
   1. legal persons business of which is to provide and transfer inter-bank payments and transmit inter-bank information,
   2. interest in legal persons, which the Export Bank acquires and holds for a period of no more than 1 year from the date of acquisition in connection with the realization of security negotiated in accordance with § 8 par. 5,
   3. a legal person established for a fixed period of time for the purpose of extending officially supported financing and acquiring of financial resources, in which the Export Bank is or shall be a majority partner at the time of acquisition of its interest, a prior approval of the Ministry of Finance is required for the acquisition of the interest in such legal persons.
4. Losses of the Export Bank, resulting from the provision of officially supported financing, shall be subsidized from the State budget. The losses consist of the differences between the booked interest income related to the provision of officially supported financing8a) reduced by the interest income in accordance with par.2, by the interest income from the temporary use of financial resources available for the officially supported financing and booked interest expenses incurred in order to acquire such resources, fees agreed in writing between a creditor and the Export Bank related to the acquisition of such financial resources, the costs of creating reserves and provisions pursuant to separate legal regulations governing the creation of reserves and provisions by banks, the differences between revenues and expenses from financial derivatives transactions, exchange rate differences and other costs demonstrably incurred by the Export Bank in acquiring financial resources. Application for a subsidy to compensate its losses shall be submitted by the Export Bank to the Ministry of Finance. The Ministry of Finance shall specify in a decree the forms and procedures for submitting the application for a subsidy to compensate losses and the form of reimbursement of such subsidy.
5. If, under exceptional circumstances, the Export Bank exceeds credit exposure limits set forth in separate Acts governing banking industry9) and immediately reports this fact to the Czech National Bank, the Czech National Bank may, in justified cases, grant the Export Bank a limited period of time to reach compliance with these limits.
6. When providing officially supported financing, the Export Bank shall proceed in accordance with the General Business Conditions. If the General Business Conditions cover the provision of refinancing credits, they must also contain the maximum margin, which the banks that receive the refinancing credits may add to the interest, at which they have obtained refinancing credits and loans from the Export Bank.
7. Annually, the Export Bank shall submit information on officially supported financing to the Chamber of Deputies of the Parliament of the Czech Republic. This information shall contain in particular:
   1. data on the Export Bank, primarily its registered capital, changes in the composition of ministries exercising shareholder rights of the State, changes in the composition of its Board of Directors and Supervisory Board, and, further, the balance sheet of the Export Bank,
   2. data on provision of officially supported financing, primarily an analysis of this financing, including a breakdown by territory and sector, the use of funds received from the State budget, further, data on the relationship between demand for the officially supported financing and the ability of the Export Bank to satisfy this demand as well as data on expected development of the officially supported financing.
8. The provisions of a separate act restricting the acquisition and holding of interests in legal persons by banks1b) shall not be affected by any application of the exceptions set forth in the par. 3.

§ 7
Particulars of an Application for Officially Supported Financing

1. An application for officially supported financing for a particular export shall be submitted to the Export Bank by the Applicant. The Applicant for the officially supported financing may only be the exporter's bank, producer's bank, investor's bank, a foreign entity, an exporter, an investor or a producer.
2. In the application for the officially supported financing, the Applicant is obligated to specify:
   1. requirements mentioned in § 5 par. 2 letters a through d,
   2. additional data given in the General Business Conditions of the Export Bank,
   3. identification data6) on the exporter's bank, investor's bank or producer's bank unless they are the Applicants for officially supported financing, who are to receive the officially supported financing.
3. The Applicant for the officially supported financing, who is to receive this financing, shall be obligated to provide the Export Bank with information regarding its registered capital, balance sheet and further information decisive for the assessment of its ability to ensure the repayment of the provided officially supported financing.
4. On the basis of the submitted application for the officially supported financing, the Export Bank may conclude an agreement for the extension of a credit, an agreement for the provision of other export-related financial services or a commitment agreement for the extension of a credit or for the provision of export-related financial services.8)
5. There is no legal entitlement to officially supported financing.

§ 7a
Equalisation of Interest Differences

1. A condition for equalisation of interest differences is
   1. compliance of the export credit with international rules,
   2. agreement on fixed interest rate of the export credit,
   3. extension of the export credit in Euros or US dollars,
   4. insurance of export credit risks by the Export Insurance Company
   5. the fact that the exporter is not a foreign company.
2. An application for inclusion of the export credit in the system of the equalisation of interest differences related to such export credit shall be submitted by the exporter's bank for decision of the Ministry of Finance. In addition to general requirements, the exporter's bank is obligated to specify in the application for inclusion in the system of the equalisation of interest differences also
   1. identification data of the exporter, importer and the foreign entity to which the export credit is extended,
   2. item exported and its value,
   3. basic data of the export credit agreement, particularly amount of the export credit and time schedule of its drawdown and repayment,
   4. agreed fixed interest rate, and
   5. declaration that the export credit is in compliance with the international rules.
3. Together with the application for inclusion in the system of the equalisation of interest differences, the exporter's bank shall submit the statement of the Export Insurance Company on possibility of insurance of the export credit. The Ministry of Finance may call upon the exporter's bank to documentation of the draft export credit agreement and of additional data necessary for the decision on inclusion in the system of the equalisation of interest differences. The exporter's bank is the sole participant of the proceedings.
4. There is no legal entitlement to include the export credit in the system of equalisation of interest differences. In case of its inclusion in the system of the equalisation of interest differences, the interest differences will be equalised between the Ministry of Finance and the exporter's bank for the entire duration of inclusion of the export credit in the system of the equalisation of interest differences.
5. The exporter's bank shall send the original or a notarially certificated copy of the export credit agreement to the Ministry of Finance without unnecessary delay. The equalisation of the interest differences shall be provided by the Ministry of Finance to the exporter's bank from the day of the first drawdown of the export credit which the bank notifies to the Ministry of Finance not later than 5 working days from the day of the first drawdown of the export credit.
6. The exporter's bank shall present the application for the reimbursement of interest differences or a notification of the transfer of an interest surplus to the Ministry of Finance after expiration of 6 months from the day of the first drawdown of the export credit or after completing the drawdown of the credit and during the repayment in regular six-months intervals from the first day of the repayment period of the export credit until the full repayment of the export credit. In case of an interest surplus , the exporter's bank is obligated to transfer this surplus to the revenue account of the State budget always within 15 working days from the day of sending of the notification on the transfer of the interest surplus.
7. In case the exporter's bank is entitled to the reimbursement of interest differences, the Ministry of Finance effects the payment of interest differences within 15 working days from the delivery of the application for the equalisation of the interest differences.
8. The Ministry of Finance shall conduct inspection of compliance with conditions and obligations laid down by this Act. In case of a breach of these conditions or obligations, the Ministry of Finance may decide on a time limit for removal from the system of the equalisation of interest differences and on the return of the funds paid from the State budget after deduction of surpluses remitted by the exporter's bank to the State budget, and, simultaneously, to set the interest relating to this amount at a usual rate.
9. In case the exporter's bank fails to meet the deadline for the transfer of the interest surplus according to the par. 6, or the deadline for returning of the funds paid from the State budget pursuant to the par. 8, it is obligated to pay a late payment penalty in the extent of 1 per mille from the owed amount for each day of default but no more than the owed amount.
10. Method of calculating the equalisation of interest differences and the commission of the exporter's banks shall be laid down by the Ministry of Finance in a decree.

§ 8

1. The State guarantees the obligations
   1. of the Export Insurance Company from export credit risk insurance according to § 1 par. 2,
   2. of the Export Bank for the repayment of financial resources obtained by the Export Bank and for obligations from other transactions of the Export Bank on the financial markets.
2. Relationships arising between the State and the foreign entity, which is a beneficiary of the guarantee issued pursuant to the paragraph 1 letter b are governed by the provisions of a separate act.12a)
3. Unless it is contrary to the legislation of another state, the State guarantees pursuant to the par. 1 letter b unconditionally and irrevocably The Ministry of Finance is authorized to confirm the State guarantee in a written form.
4. The consent of the Ministry of Finance is required for the raising of financial resources on financial markets by the Export Bank, unless specified otherwise by a separate act13)
5. In order to secure the repayment of officially supported financing, with the exception of refinancing credits, the Export Bank shall be obligated to arrange for security.
6. In the event of payment by the State resulting from a provided State guarantee, the Export Insurance Company and the Export Bank shall be obligated to settle their obligations towards the State arising from such payment by assigning to the Ministry of Finance the receivables assumed by them in connection with export credit risk insurance or with officially supported financing to the extent corresponding to the State's share in the repayment of obligations under the issued State guarantee, provided the Export Bank arranged for the provision of security.

§ 9

State support provided pursuant to this Act must be in compliance with a separate act regulating state aid.14)

PART TWO
SUPPLEMENT TO ACT NO. 163/1993 COLL., ON THE SUPREME AUDIT OFFICE AS AMENDED
§ 10

The Act No.166/1993 Coll., on the Supreme Audit Office as amended by the Act No. 331/1993 Coll., Act No. 117/1994 Coll., and the Act No. 224/1994 Coll., has been amended as follows:

The dot shall be deleted at the end of the § 3 par. 5 and the following words shall be added:

"and the Export Guarantee and Insurance Corporation's, Prague, management of funds provided from the State budget for the operation of insurance of export credit risks and of the Czech Export Bank's Prague, management of funds provided from the State budget for the operation of the officially supported financing according to the separate act as well as management by these two companies of funds for which the State accepted the guarantee.

PART THREE
§ 11

This Act shall become effective on the day of its promulgation.

Uhde (undersigned)
Havel (undersigned)
Klaus (undersigned)