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.