Counter Guarantee Scheme 2017.

• Published date: 08 December 2017
• Statutory Instrument No.: 551/2017

Notice of the making of this Statutory Instrument was published in

“Iris Oifigiúil” of 8th December, 2017.

I, PAT BREEN, Minister of State at the Department of Business, Enterprise and Innovation, in exercise of the powers conferred on me by Section 13 of the Credit Guarantee (Amendment) Act 2016 (No. 1 of 2016) and the Jobs, Enterprise and Innovation (Delegation of Ministerial Functions) Order 2017 ( S.I. No. 362 of 2017 ) (as adapted by the Jobs, Enterprise and Innovation (Alteration of Name of Department and Title of Minister) Order 2017 ( S.I. No. 364 of 2017 )), with the consent of the Minister for Finance and the Minister for Public Expenditure and Reform, hereby make the following Scheme:

1. Citation

This Scheme may be cited as the Counter Guarantee Scheme 2017 (the “Scheme”).

2. Commencement

This Scheme comes into operation on the day of its making.

3. Interpretation and Definitions

In this Scheme:

“Acts” as used in this Scheme mean the Credit Guarantee Acts 2012 and 2016:

any word or expression used in this Scheme and also used in the Acts has, unless the contrary intention appears, the same meaning in this Scheme as it has in the Acts:

references in this Scheme to a “Section” are references to Sections of this Scheme unless otherwise provided:

“counter-guarantee” means to give a counter guarantee in accordance with Section 11 of the Credit Guarantee (Amendment) Act 2016 :

“PFI” means promotional financial institution as defined in Section 10 of the Credit Guarantee (Amendment) Act 2016 .

4. Objectives

The objective of the Scheme is to encourage additional credit provision to viable enterprises at a reasonable cost and without unduly onerous terms and conditions from the finance provider. Such support is designed to complement rather than substitute existing means of financing.

5. Powers of the Minister

The Minister may, subject to the provisions of the Acts, this Scheme and any counter guarantee agreements concluded pursuant to the Scheme, counter-guarantee the repayment to any PFI of such part, as is specified in the counter guarantee agreement, of moneys (excluding interest and any other charges) paid by that institution to finance providers pursuant to qualifying PFI finance agreements.

6. Minister’s Liability

6.1 The Minister will not, in any particular year, counter-guarantee any PFI in such a manner as would result in the aggregate of his or her liabilities in respect of:

(a) all qualifying finance agreements entered into in that year under Section 4 of the Credit Guarantee Act 2012 as amended, and

(b) all qualifying finance agreements entered into in that year under Section 11 of the Credit Guarantee (Amendment) Act 2016

exceeding €15.6 million.

6.2 The Minister’s liability in respect of credit amounts under qualifying finance agreements due to a finance provider shall not exceed 80% of the credit amounts outstanding to that finance provider.

6.3 All Scheme operators and participating PFIs must report on their liabilities as set out in Section 6.1 to the Minister either on a monthly basis or at more frequent intervals as the Minister requests. This information will be used to maintain a register to ensure the Minister’s liability does not exceed the limit in Section 6.1.

7. Other Scheme Requirements

7.1 Management of Guarantees (policies, procedures, supervision.)

The PFI must satisfy the Minister as to its competence in managing the business of giving and administering guarantees both (1) generally and (2) specifically in respect of moneys provided to qualifying enterprises.

The PFI must undertake a credit and risk analysis on a qualifying finance provider prior to concluding a qualifying PFI guarantee agreement and must review any such agreement on an annual basis.

The PFI must ensure at all times that the entry into, supervision, management and administration of a qualifying PFI finance agreement is lawful and...