Guarantee as aid
According to EU legislation, the guarantees issued by the Foundation are treated as state subsidy due to the state counterguarantee in the event the guarantee is issued at a rate lower than the market guarantee fee calculated on the basis of methodology approved by the European Commission. For guarantees treated as state subsidy, the difference between the market fee payable conditionally for the guarantee and the present value of the fee payable actually represents the aid element of the guarantee.
Categories of the Foundation's guarantees
Currently the Foundation issues guarantees in the following two categories:
Guarantees qualified as state subsidy:
- Agricultural guarantee: a guarantee issued by the Foundation for credit, loan, bank guarantee, financial leasing and factoring contracts, as well as general credit and bank contracts relating to agriculture and fishing provided that the guarantee is granted for a fee lower than the market-based guarantee fee.
- General guarantee: a guarantee issued by the Foundation for contracts other than those relating to agriculture and fishing provided that the guarantee is granted for a fee lower than the market-based guarantee fee.
Guarantees not qualified as state subsidy:
- Guarantees under market conditions: guarantees that cannot be granted as state subsidy, e.g. when the statutory conditions are not met or the maximum aid intensity or aid percentage is exceeded.