In the beginning
The Norwegian government export guarantee system can trace its roots back to the early 1920s. It started in the Eastern Trade Office of the Ministry of Trade, with its own commercial officer during the 1st World War.
Annual Storting resolutions between 1922-28 formally supported the export of salted fish, herring and aluminium to the Soviet Union which was a major market. The first resolution had an exposure limit of NOK 19.3 million.
In 1929 a commission was established under the auspices of the Ministry of Trade called the Russia Commission, which made the guarantee scheme system more permanent, and which administered and drew up insurance.
The aim was to help the unemployed and prevent job losses, particularly within the fishing industry. The scheme was limited, but as of 1934 was expanded to include all countries. At the same time the name was changed to the Government Export Credit Commission. The scheme was not well-used, and apart from the Soviet Union the majority of the insured export volume was to Germany, Italy, Greece, Spain and Brazil.
The period until 1947
The guaranteed volume of exports in the years 1929-1940 and in 1946 was some NOK 248 million, with guaranteed values of NOK 192 million. It is worth noting that no losses were recorded during this period. The amount guaranteed during the war is somewhat uncertain. Available information shows a guaranteed amount of NOK 90.5 million, but there were also special financing schemes available at the time.
The types of goods guaranteed were the traditional Norwegian export products, with a clear predominance of fish and fish products, paper and cellulose, but also vessels, machinery and airport facilities were guaranteed before the war.
The period until 1960
After the war it became more common to open credit insurance for long credit terms for production equipment and insurance against insolvency and transfer risk.
In addition there was a need to cover foreign goods that were purchased and incorporated into the Norwegian export. In 1947 the first step was taken and the export of goods that with regard to their value were primarily of Norwegian origin and whose production was important to society were included.
In 1948 a greater change was included in the Storting resolution and in the framework conditions for operations. Changes were made to offer credit insurance to cover insolvency, war, transfer risk etc. This is the same main group of risks that are found in the industry today. At the same time it was decided that the profits from operations would be invested in an Export Guarantee Fund. In many ways this was the start of the modern GIEK.
In 1951 Norway joined the Berne Union, which provided the basis for modernization, and these experiences were important in the design of new terms and guidelines. At the same time there was increased Scandinavian cooperation.
The 1960s
In 1960 the name was changed to Garanti Instituttet for Eksportkreditt (GIEK) to cover the purpose of the institution and to better mirror its actual operations. A GIEK committee consisting of 9 members from interest groups was established in 1962. This committee processed the annual report and took an active part in operations.
On the international stage the debate began within the OECD regarding the political follow-up of terms of trade, particularly credit terms, which were developed through the Berne Union. The OECD Trade Committee was established in 1963. This has a strong interest in international cooperation and the need for equal competition.
In 1963 the guarantee scheme for export to developing countries was established. Cooperation with Norsk Utviklingshjelp was emphasized, and guidelines were stipulated for utilizing the new guarantee schemes to ensure additional export that could not be carried out under normal conditions. Norsk Utviklingshjelp sat on the Board on cases that fell under the guarantee scheme.
When the operational conditions were discussed in 1968, emphasis was placed on self-financing. The guarantee exposure limit was now NOK 1.5 billion. Market adaptations were carried out, as were changes to the resolutions, guarantee rates, the system for guarantees to banks etc., and GIEK also began to invest funds in bonds, not just bank deposits. At the same time an expanded range of services was introduced for long-term credit and guarantees to banks.
The 1970s
The decade was characterised by the oil crisis, the restructuring of the shipbuilding industry, the shipping industry crisis and an active counter-cyclical policy.
The exchange rate guarantee scheme was introduced in 1975, and it was emphasised that the scheme was vital for shipyards to be able to obtain contracts. The exposure limit was NOK 3 billion.
In 1976 the Storting established an interest rate support scheme, export permits were increased and a new case processing body was established to help companies obtain contracts.
Use of the Special scheme for Developing Countries for the so-called ship export campaign, combined with interest relief and donations characterized the second half of the decade.
The 1980s
GIEK implemented major organisational and administrative changes in 1980. The increased delegation of authority from the Ministry resulted in increased independence and the organisation expanded its workforce. In the same year GIEK, along with its 31 employees, moved to Dronning Mauds gate 15 in Vika, the same premises as it uses today.
The tender guarantee scheme was established in 1974 and was one of the Ministry of Trade’s measures. The scheme was to be repealed, but in 1982 was transferred to GIEK and modernized. The scheme was more like a grant, as compensation was paid if the company did not win a tender.
The general opinion in the Storting in 1983 that guarantees should be furnished in a new manner, like a simple security, and that the coverage rate from the government should not normally exceed 50% for commercial risk, was an extremely serious piece of policy tightening. Guarantees for credit exceeding NOK 10 million would now be granted purely on a pro rate basis with the private market. This led to a marked decline in the number of guarantees for long credit facilities. No exceptions were made for export guarantees, and thereby GIEK had one of the most restrictive sets of regulations in the world.
The exchange rate guarantee scheme was abandoned in 1987. The same year the GIEK Committee was also abolished. As of 1988 it was decided to repeal the special schemes for guarantees for export to and investment in developing countries.
The 1990s
Changes took place rapidly in Europe after the fall of the Berlin wall. The need for guarantees increased, particularly to maintain traditional export of paper and cellulose to Russia, but also to attempt to obtain contracts for the sale of ships. This resulted in a specific guarantee scheme for former CIS countries and the Baltic countries with an original guarantee exposure limit of NOK 1.8 billion which was later increased to NOK 3 billion. Guarantees were given under the scheme until 2002.
In 1994 GIEK was established as a separate public sector enterprise with its own independent Board.
New EU rules created great pressure, particularly from ESA, to change the market-focused part of GIEK’s operations into a separate company. In 2000 it was therefore decided to establish GIEK Kredittforsikring AS as a separate subsidiary, in order to look after the needs of SMBs and ensure the provision of credit insurance. The company’s capital came from its own funds and from the repayment of capital that in previous years was used to pay compensation for long-term credit facilities. 2001 was the first year of operation for GIEK Kredittforsikring.
