How Do I Get Paid (Methods of Payment)
For U.S. exporters, financing export sales is basically the same
as financing domestic sales. The fundamental concern in both
cases is that one is paid in a timely manner for the goods and/or
services delivered.
France's modern banking system offers a full range of payment
methods, the most significant of which are:
• Commercial letters of credit
• Sight and time drafts
• Bank transfers
• Certified checks
Electronic payments including electronic payment orders,
pre-formatted inter-bank payment orders, electronic commercial
trade bills, and electronically processed promissory notes. As of
January 28, 2008, businesses are able to make faster euro credit
transfers in the Single Euro Payments Area (SEPA). By November 1,
2009, payments with direct debit will follow and businesses will
be able to set up cross-border direct debits in euros between any
two SEPA countries. SEPA will also help businesses simplify
business management, as all financial transactions can be done
centrally from one bank account using SEPA payment
instruments.
Although bank transfers and certified checks are fairly
self-explanatory methods of payment, commercial letters of credit
and sight and time drafts may be less familiar to the would-be
exporter but are potentially attractive terms of payment.
How Does the Banking System Operate
The French banking system underwent a fundamental structural
reform in 1984, which removed most of the distinction between
commercial banks and merchant banks and grouped most financial
institutions under a single supervisory system. The largest
commercial banks, such as Crédit Agricole - LCL, Société
Générale, BNP Paribas, Natixis, Crédit Mutuel - CIC group, and
HSBC France rank among the largest banks in the world. These
commercial banks offer all classic financing instruments,
including short, medium, and long-term loans, short-and
medium-term credit facilities, and secured and non-secured
overdrafts. Commercial banks also assist in public
offerings of shares and corporate debt, as well as mergers,
acquisitions and takeovers. Banks also offer hedging against
interest rate and currency fluctuations. France also has 161
foreign banks; some have sizeable branch networks.
The Bank of France ("Banque de France") is a member of the
European Central Bank (ECB) system and the Banque de France's
governor sits on the executive board of the European Central
Bank. The Banque de France introduced Euro-denominated banknotes
and coins in January 2002, completing the transition to the Euro,
and eliminating the French franc.
The Banque de France participates in the regulation and
supervision of the French banking and financial system. Its
governor is the chair of the Committee on Credit Institutions,
which grants or withdraws banking licenses. The governor is also
president of the Banking Commission, which ensures that banks
adhere to banking regulations. The system also includes two
consultative committees, the Committee on Financial Regulation,
and the Financial Sector Consultative Committee.
The French government has sold its majority equity stakes in
major banks and insurance companies. However, it retains
ownership of the Caisse des Dépôts et Consignations and minority
stakes in several major financial institutions. The French postal
service, La Poste, an independent public entity, holds 10 percent
of the French financial services market. La Poste has created its
own bank “La Banque Postale,” which in 2006 acquired the status
of a regular bank.
Foreign-Exchange Controls
As part of the international effort to combat money laundering and the financing of terrorism, France's banking regulations have undergone several changes, which affect the handling of checks, as recommended by the Financial Action Task Force http://www.fatf-gafi.org. In addition to implementing EU Common Positions regarding terrorists or arms proliferators, France sometimes uses its powers under national law to execute asset freeze orders against terrorists. In general, all inward and outward payments must be made through approved banking intermediaries by bank transfers.
Repatriation of Capital and Earnings:
There is no restriction on repatriation of capital provided this
is carried out through an approved bank and the investment in
question was authorized. Similarly, there is no restriction on
transfers of profits, interest, royalties, or service fees,
provided the investment was authorized and made through approved
banks.
Businesses:
Foreign-controlled French businesses are required to have a
resident French bank account and are subject to the same
regulations as other French legal entities. The use of foreign
bank accounts by residents is permitted.
Individuals:
France has few controls on the use of foreign exchange. For
exchange control purposes, foreigners are considered to be
residents from the time they arrive in France. French and foreign
citizens are subject to the same rules. Residents are entitled to
open an account in foreign currency with a bank established in
France and to establish accounts abroad. Residents must
report the account number for all foreign accounts on their
annual income tax returns. French-source earnings may be
transferred abroad, without limitations if carried out through an
approved bank.
U.S. Banks and Local Correspondent Banks
All large French banks have correspondent U.S. banking
arrangements. Many
French banks also have subsidiaries or branch offices in the
United States based on Federal Reserve list Error! Hyperlink
reference not valid:
BNP Paribas: Bank of the West (San Francisco); BNP Paribas
(Chicago, Dallas, New York, Houston, Miami, San Francisco); First
Hawaiian Bank (Honolulu); Banca Nazionale Del Lavoro (New York,
Chicago); BNP Mexico (New York); French American banking
corporation (New York)
http://www.bnpparibas.com
Société Générale: Société Générale (Chicago, Dallas, Houston, New
York); Trust Co of the West (Los Angeles)
http://www.socgen.com
Crédit Industriel et Commercial: CIC (New York); Banque
Transatlantique (Washington)
http://www.cic.fr; http://www.transat.tm.fr
NATIXIS (Los Angeles, Houston, New York): http://www.natixis.com
Crédit Agricole - Société Anonyme Simplifiée rue la Boetie :
Calyon (Chicago, Dallas, Houston, Miami, New York); LCL
(Miami); http://www.credit-agricole.fr; http://www.lcl.com; http://www.caylon.com
Dexia Credit Local (New York): http://www.dexia.com
Major American banks and financial institutions present in
Paris:
American Express Cartes France
4, rue Bleriot
92500 Rueil Malmaison Cedex
Tel: (+33) 1 47 77 77 07
Website: http://www.americanexpress.fr
Bank of America
51, rue Francois Premier
75008 Paris
Tel: (+33) 1 45 02 68 00
Fax: (+33) 1 45 01 77 89
Website: http://www.bankofamerica.com
The Bank of New York Mellon (representative office)
13-15, boulevard de la Madeleine
75001 Paris
Tel: (+33) 1 42 97 90 20
Fax: (+33) 1 42 97 43 73
Website: http://www.bankofnewyork.com
Banque AIG (subsidiary)
46, rue Bassano
75008 Paris
Tel: (+33) 1.49.52.36.00
Website: http://www.aig.com
Goldman Sachs (subsidiary)
2, rue Thann
75017 Paris
Tel: (+33) 01.42.12.10.00
Website: http://www.gs.com
Citibank International
19 Le Parvis
92800 Puteaux
Tel: (+33) 01 70 75 50 00
Website: http://www.citibank.fr
Citigroup Global Markets Limited
1-5 rue Paul Cézanne
75008 Paris
Tel : (+33) 01.70.75.50.00
Fax : (+33) 01.70.75.50.01
Website: http://www.citibank.fr
JP Morgan Chase Bank (subsidiary)
14, Place Vendôme
75001 Paris
Tel: (+33) 1 40 15 45 00
Website: http://www.jpmorganchase.com
Lazard Freres bank
121, boulevard Haussman
75008 Paris
Tel: 01.44.13.01.11; Fax: 01.44.13.01.10
Telex: LFCX 651666F; LFINTX651684F
Website: http://www.lazard.com
Project Financing
Foreign companies have access to all banking services described
in Section A. The other main financing is through French
financial markets. The center of the French stock market is the
Paris stock exchange (the "Bourse") that is part of the
transatlantic exchange NYSE Euronext. More details can be found
in the Investment Climate Section of this report (A9).
EU financial assistance programs provide a wide array of grants,
loans, loan guarantees and co-financing for feasibility studies
and infrastructure projects in a number of key sectors (e.g.,
environmental, transportation, energy, telecommunications,
tourism, public health). From a commercial perspective, these
initiatives create significant market opportunities for U.S.
businesses, U.S.-based suppliers, and subcontractors.
The EU supports projects within its Member States, as well as
EU-wide "economic integration" projects that cross both internal
and external EU borders. In addition, the EU provides assistance
to accession countries in Eastern and Southern Europe and Turkey,
as well as some of the former Soviet republics.
The European Union provides project financing through grants from
the European Commission and loans from the European Investment
Bank. Grants from the Structural Funds are distributed through
the Member States’ national and regional authorities, and are
only available for projects in the 27 EU Member States. All
grants for projects in non-EU countries are managed through the
EuropeAid Cooperation agency in conjunction with various European
Commission departments, called "Directorates-General."
The CSEU Tenders Database
The U.S. Commercial Service at the U.S. Mission to the European
Union offers a tool on its website to help U.S.-based companies
identify European public procurement opportunities. The database
features all current public procurement tenders issued by all
national and regional public authorities in the 27 Member States
of the European Union, plus four other European countries, and
that are open to U.S.-based firms under the terms of the
Government Procurement Agreement (GPA) implemented in 1995. The
database is updated twice weekly and is easy to use with a range
of search options, including approximately 20 industry sectors.
The database also contains tenders for public procurement
contracts relating to structural funds. Readers may access the
database at http://www.buyusa.gov/europeanunion/eu_tenders.html
EU Structural Funds
The EU Structural Funds, including the European Regional
Development Fund, were created in 1975 to assist economically
depressed regions of the European Union that required industrial
restructuring. The EU earmarked EUR 308 billion for projects
under the Structural Funds and the Cohesion Fund programs for the
2007-2013 period for the EU-27. In addition to funding economic
development projects proposed by Member States or local
authorities, EU Structural Funds also support specialized
projects promoting EU socioeconomic objectives. Member States
negotiate regional and “sectoral” programs with officials from
the regional policy Directorate-General at the European
Commission. For information on approved programs that will result
in future project proposals, please visit:
http://ec.europa.eu/regional_policy/atlas2007/fiche_index_en.htm
For projects financed through the Structural Funds, Member State
officials are the key decision-makers. They assess the needs of
their country; investigate projects; evaluate bids; and award
contracts. To become familiar with available financial support
programs in the Member States, it is advisable for would-be
contractors to meet with local officials to discuss local
needs.
Tenders issued by Member States’ public contracting authorities
for projects supported by EU grants are subject to EU public
procurement legislation if they meet the EU minimum contract
value requirement for the eligible sector. Below this threshold,
tender procedures are subject to national procurement
legislation. There are no overt prohibitions against the
participation of U.S. companies, either as developers or
concessionaires of projects supported partially by the Structural
Funds, or as bidders on subsequent public tenders related to such
projects, but it is advisable to team up with a local partner.
All Structural Fund projects are co-financed by national
authorities and most may also qualify for a loan from the
European Investment Bank. The private sector is also involved in
project financing. For more information on these programs, please
see the market research section on the website of the US Mission
to the EU: http://www.buyusa.gov/europeanunion/mrr.html
The Cohesion Fund
The Cohesion Fund is another instrument of EU structural policy.
Its EUR 61.5 billion (2007-2013) budget seeks to improve cohesion
within the EU by funding transport infrastructure and
environmental projects in Portugal, Spain, Greece and the twelve
new (since 2004) EU Member States from Central and Eastern
Europe. These projects are generally co-financed by national
authorities, the European Investment Bank, and the private
sector.
Key Link: http://ec.europa.eu/regional_policy/funds/cf/index_en.htm
The Trans-European Networks
The European Union also provides financial support to the
Trans-European Networks (TENs) to develop infrastructure,
strengthen cohesion and increase employment across greater
Europe. Launched at the Essen Counsel (Germany) in 1994, the TENs
are a series of transport, telecommunications and energy projects
that are continually being expanded and upgraded. The TENs are
largely financed by private sector and non-EU sources. The EU
does, however, provide grants from the Cohesion Fund, loans from
the European Investment Bank (and loan guarantees from the
European Investment Fund), and partial feasibility study grants
for the TENs. There are no overt EU restrictions on the
participation of U.S. firms in the TENs.
Key Link: http://ec.europa.eu/ten/transport/index_en.htm
Other EU Grants for Member States
Another set of sector-specific grants offers assistance to EU
Member States in the fields of science, technology,
communications, energy, environmental protection, education,
training and research. Tenders related to these grants are posted
on the various websites of the directorates-generals of the
European Commission. Conditions for participation are strict and
participation is usually restricted to EU firms or tied to EU
content. Information pertaining to each of these programs can be
found on:
http://europa.eu.int/grants/index_en.htm
External Assistance Grants
The EuropeAid Cooperation Office is the European Commission
agency in charge of managing the EU’s external aid programs. This
Agency is responsible for the management of the entire project
cycle, from identification to evaluation, while the
Directorates-General in charge of External Relations and
Development, are responsible for the drafting of multi-annual
programs. The EuropeAid website offers extensive information on
the range of grant programs, the kind of projects that are
eligible, as well as manuals to help interested parties
understand the relevant contract law. However, participation to
calls for tender for contracts financed by EuropeAid is reserved
for enterprises located in the EU Member States and require that
the products used to respond to these projects are manufactured
in the EU or in the aid recipient country. European subsidiaries
of U.S. firms are eligible to participate in these calls for
tender.
Key Link: http://europa.eu.int/comm/europeaid/index_en.htm
All tenders related to EU-funded programs outside the territory of the European Union (including the accession countries) are located on the EuropeAid Cooperation Office website: http://europa.eu.int/comm/europeaid/tender/index_en.htm
Two new sets of programs have been approved for the financing period 2007-2013. As of January 2007, the EU will provide specific Pre-Accession financial assistance to the accession candidate countries that seek to join the EU through a new instrument called the Instrument for Pre-accession Assistance (IPA). Also, the European Neighborhood and Partnership Instrument (ENPI) will provide assistance to countries that are the Southern Mediterranean and Eastern neighbors of the EU.
IPA replaces the following programs: PHARE (Poland and Hungary Assistance for Restructuring of the Economy), ISPA (Instrument for Structural Pre-Accession financing transport and environment projects), SAPARD (projects in the agriculture sector), CARDS (aid to southern Balkans) and the Turkey Facility Fund. IPA focuses on priorities linked to the adoption of the acquis communautaire (the body of European Union law that must be adopted by accession candidate countries as a precondition to accession), i.e., building up the administrative and institutional capacities and financing investments designed to help them comply with European Commission law. IPA will also finance projects destined to countries that are potential candidate countries, especially in the Balkans. The budget of IPA for 2007-2013 is EUR 11.4 billion.
Key Link: http://ec.europa.eu/enlargement/financial_assistance/ipa/index_en.htm
ENPI: replaces the former TACIS and MEDA programs. The European Neighborhood Policy program covers the EU’s neighbors to the east and along the southern and eastern shores of the Mediterranean i.e. Algeria, Armenia, Azerbaijan, Belarus, Egypt, Georgia, Israel, Jordan, Lebanon, Libya, Moldova, Morocco, the Palestinian Authority, Syria, Tunisia and Ukraine. ENPI budget is € 11,9 billion for 2007-2013.
Loans from the European Investment Bank
Headquartered in Luxembourg, the European Investment Bank (EIB)
is the financing arm of the European Union. Since its creation in
1958, the EIB has been a key player in building Europe. As the
EIB's lending practices evolved over the years, it became highly
competent in assessing, reviewing and monitoring projects. As a
non-profit banking institution, the EIB offers cost-competitive,
long-term lending in Europe. Best known for its project financial
and economic analysis, the Bank makes loans to both private and
public EU-based borrowers for projects in all sectors of the
economy, such as telecommunications, transport, energy
infrastructure and environment.
While the EIB mostly funds projects within the EU, it lends outside the EU as well (e.g., in Central, Eastern and Southeastern Europe; Latin America; and Pacific and Caribbean states). In 2006, the EIB approved loans for projects worth EUR 53.3 billion, of which around 14% was lent outside the EU. The EIB also plays a key role in supporting EU enlargement with loans used to finance improvements in infrastructure, research and industrial manufacturing to help those countries prepare for eventual EU membership.
Projects financed by the EIB must contribute to the socioeconomic objectives set out by the European Union, such as fostering the development of less favored regions; improving European transport and telecommunication infrastructure; protecting the environment; supporting the activities of SMEs; assisting urban renewal; and, generally promoting growth, competitiveness and employment in Europe. Last year, the EIB created a list of projects to be considered for approval and posted the list on its website. As such, the EIB website is a source of intelligence on upcoming tenders related to EIB-financed projects:
http://www.eib.org/projects/.
The EIB presents attractive business opportunities to U.S.
businesses. EIB lending rates are lower than most other
commercial rates. Like all EIB customers, however, U.S. firms
must apply the loan proceeds to a project that contributes to the
European objectives cited above.
The EIB’s i2i (Innovation 2010 Initiative) is designed to
highlight projects that support innovative technology in the
European Union, in particular by financing broadband and
multimedia networks; the physical or virtual infrastructure
providing local access to these networks; and research and
development infrastructures, especially in the less developed
regions of the European Union. i2i will also finance projects to
computerize schools and universities and to provide information
technology training in conjunction with public authorities.
Key Link: http://www.eib.org/Attachments/thematic/innovation_2010_initiative_en.pdf
Web Resources
U.S. Banks in France
AMERICAN EXPRESS INTERNATIONAL BANKING CORPORATION
http://www.americanexpress.fr
BANK OF AMERICA
http://www.bankamerica.com
BANK OF NEW-YORK
http://www.bankofny.com
Banque AIG
http://www.aig.com
Goldman Sachs
http://www.gs.com
CITIBANK
http://www.citibank.fr
JP MORGAN
http://www.jpmorganchase.com
Lazard Freres bank
http://www.lazard.com
French Banks
FEDERATION BANCAIRE FRANCAISE
http://www.fbf.fr
SOCIETE
GENERALE
http://www.societegenerale.fr
BNP-PARIBAS
http://www.bnpparibas.com
CREDIT AGRICOLE
http://www.credit-agricole.com
CREDIT INDUSTRIEL ET COMMERCIAL
http://www.cic.fr
LCL (CREDIT LYONNAIS)
http://www.lcl.fr
NATIXIS
http://www.natixis.fr
EU websites:
EuropeAid Co-operation Office: http://europa.eu.int/comm/europeaid/index_en.htm
EU Grants and Loans index: http://ec.europa.eu/grants/index_en.htm
The European Investment Bank: http://www.eib.org/
The EU regional policies, the EU Structural and Cohesion Funds:
http://ec.europa.eu/regional_policy/index_en.htm
European Union Tenders Database:
http://www.buyusa.gov/europeanunion/euopportunities.html
U.S. websites:
Export-Import Bank of the United States: http://www.exim.gov
Country Limitation Schedule: http://www.exim.gov/tools/country/country_limits.html
OPIC: http://www.opic.gov
Trade and Development Agency: http://www.tda.gov/
SBA's Office of International Trade: http://www.sba.gov/oit/
USDA Commodity Credit Corporation: http://www.fsa.usda.gov/ccc/default.htm
U.S. Agency for International Development: http://www.usaid.gov
Groupe d'Action Financiere: http://www.fatf-gafi.org
Links to web sites outside the U.S. Government or the use of trade, firm, or corporation names within U.S. Commercial Service web sites are for the convenience of the user. Such links and use do not constitute an express or implied official endorsement or approval by the United States Department of Commerce of any private sector web site, or of the products or services of specifically identified companies or of any of the private entities that may have contributed to a U.S. Commercial Service web site.