Compañía Española de Seguros de Crédito a la Exportación

CESCE, S.A.Calle Velázquez, no. 74 de Madrid (C.P. 28001)

Each year the Spanish State designates millions of Euros from the public coffers to support the internationalization of Spanish business, assisting Spanish transnational corporations via a number of different mechanisms. Within the complex architecture involved, the Spanish Export Credit Agency CESCE is the state’s principal financial instrument.

CESCE’s main objective is to facilitate the internationalization of the private sector, by covering the risk involved in the sale of Spanish companies’ products and services in foreign markets. Through this type of insurance the State assumes the political risks that could affect business operations abroad (both direct investment and exports).

CESCE offers two types of insurance, based on the nature of the initial investment:

  • insurance for investors in the asset allocation of the foreign company (equity, permanent contributions)
  • insurance for financiers, for banks or companies financing the foreign subsidiary of a Spanish company for a particular investment project.

Who is involved

The Spanish government is majority shareholder in CESCE (see diagram).

CESCE is linked to the Ministry of Finance by the Secretary of State for Trade and Tourism. The Secretary establishes performance standards and coordinates negotiations with the OECD and the European Union on guidelines for ECAs. Representatives of the Ministry of Finance participate at the Management Board of CESCE and in the Commission which assesses the risk or not to support projects.

CESCE insures against the risk of defaulted payments from the sale of products and services overseas, and covers any losses that a company might incur through overseas investment. Policy coverage from CESCE is for a minimum of 5 years and a maximum of 20 years.

Risk factors that can be covered by the State include:

  • Political risk: linked to the performance of the host states. It may consist of balances of payments crisis, significant changes in monetary parity generating widespread insolvency, civil wars, revolutions, terrorist acts, significant alterations of public order, acts of expropriation or nationalization, confiscation or seizure, and others.
  • Extraordinary risks: natural disasters, nuclear accidents caused by chemicals or similar.
  • Commercial risks: breach of contract by a foreign private entity that can generate economic losses to the company or financial institution that contracts for insurance, where the duration of the operation is more than two years.


In 2009, the General State Budget (Ley de Presupuestos Generales del Estado) set the maximum limit for state expenditure on CESCE-directed insurance at 4,547.28 million Euros, but by 2010 this sum had doubled, reaching 9.000 million Euros, although actual CESCE transactions in this year only reached EUR 6,306 million. Only in 2012 has the maximum limit begun to drop.


CESCE is responsible for 40% of all foreign debt that southern countries owe to the Spanish state.

CESCE insurance covers operations with high political or commercial risks; if the operations fail they generate a debt which the CESCE initially pays but then reclaims from the administration of the country where the operation took place. This is the ‘sovereign guarantee’ clause, which converts debt incurred through a failed private transaction in to national foreign debt owed to the Spanish state.

At the end of 2008, the debt generated through the CESCE totalled 3.425,89 million Euros. Almost 20% of this total is owed by Heavily Indebted Poor Countries (HIPC) such as the Ivory Coast, Republic of Congo, Nicaragua, Bolivia, Togo and Haiti.

Transparency and corruption

In general, in matters concerning any of the public mechanisms for the promotion of direct investment abroad, it is impossible to know (a priori or a posteriori), the details of the projects that have been supported using public resources.

Transparency International produces yearly reports, including the “Bribe Payers Index” (BPI), which classifies 22 of the most economically influential countries in the world in terms of the propensity of their companies to pay bribes abroad. Spain is placed in 12th place, representing a significant likelihood that Spanish businesses will participate in bribery as part of their foreign activities.

Since 2003, CESCE has begun to implement proposals to fight corruption as agreed within the OECD framework, which requires companies or bodies requesting State insurance to formally recognise the OECD guidelines on corruption. These include a commitment against participating in bribery. However this process is of limited credibility given that the CESCE does not allow citizens exhaustive access to information about the projects it covers, so it is impossible to externally monitor compliance.

A further contradiction in the matter of transparency arises between the legal protection given to CESCE in maintaining strictest confidentiality about data held on the projects they insure (ECO/180/2003), and the legal right of any Spanish citizen to access information and justice in matters relating to the environment (27/2006 law of 18th July 2006).

Environmental concerns

The CESCE has underwritten projects which have serious environmental and social impacts in the destination countries, as recognised by bodies including the OECD and condemned by numerous different social collectives.

It is difficult to perform a complete assessment of the overall environmental impact of activities supported by the CESCE, given the problems with transparency highlighted in the previous section. The environmental assessment system for CESCE projects is based on the obligatory OECD guidelines. Nevertheless, there are significant deficiencies in its application.

These deficiencies include a failure to dedicate resources to in-the-field assessment of the projects CESCE considers insuring. There are also no independent assessors ensuring projects comply with environmental aspects, and not all those affected are taken into account by the internal assessments that do occur. There are also no protocols to assess the development impacts of a project. In effect, unlike other ECAs, CESCE has no system to evaluate the real impact of a project on the area in which it is located after the insurance has been approved.

Human rights

A particularly worrying aspect of the financial support given to the internationalization of Spanish business, in terms Human Rights violations, is the case of the arms industry.

Some identified CESCE operations are linked to the sale of armaments to countries with a high level of conflict. Even in the context of the notoriously opaque arms sector, it is particularly difficult to obtain access to information about CESCE support for Spanish arms dealers.

In 2002, 54% of the operations of CESCE took place in countries with a very low level of democratic control.

The CESCE also continues to demand repayment of odious debts, often related to armed conflicts with no regard for the impact of their demands on Human Rights.

The campaign against CESCE in Spain

Since November 2008 ‘Who owes Who?’, a national campaign for the abolition for foreign debt and recognition of ecological debt, has been calling for the abolition of CESCE and a full audit of foreign debt created through it. In March 2009 the campaign created a series of proposals for a complete review of CESCE in the event that it was not dissolved.

By February 2010, the ‘Who owes Who?’ campaign demands had received the support of more than 100 local, state and international networks and organisations, as well as 390 individual endorsements. These demands also include reform of Spain’s Development Aid Fund (FAD by its Spanish acronym).

For more information on ‘Who owes Who?’, see this document (in Spanish).

Dodgy deals associated with CESCE

For an insight into some of the most controversial cases in which CESCE has been involved, see (Spanish): here and here.

Publications related to Compañía Española de Seguros de Crédito a la Exportación