Forfaiting

Under forfaiting ( French vendre à forfait , "in the package sell") refers to the purchase of claims , waiving any recourse against the seller in default by the debtor ( real forfeiting ). In the case of fake forfaiting , however, recourse is possible. However, the seller is liable in both cases for the legal validity of the claim.

General

The seller of the receivable is called a "forfaitist", the buyer a "forfaiteur". Forfaiting or forfaiting is a classic export financing instrument . In addition, it has gained considerable importance in the financial processing of leasing transactions . For many years, forfaiting has also been used for claims by the public sector against third parties, in particular as an instrument for financing projects in the field of Public Private Partnerships (PPP) or Public Private Partnerships (PPP). Forfaiting is used in modern financing structures such as B. Asset Backed Securities (ABS), used as part of the transaction. If a so-called true sale is to be achieved in ABS transactions, for example, the sale of receivables without recourse is a necessary prerequisite.

In general, forfaiting improves the liquidity of the forfaitist and helps to reduce liabilities.

Legal bases

The term forfaiting, used without restrictive additions, has a clear customary content. It denotes a certain type of financing, namely the purchase of receivables that become due later, in particular from foreign trade transactions, by a credit institution while assuming the credit risk . The fact that the term forfaiting is inherent in a waiver of recourse by the bank in the event that the acquired claim is economically unenforceable corresponds to general opinion. The specialist literature therefore unanimously defines the term forfaiting as the purchase of receivables that become due later, excluding recourse to previous receivables.

According to the prevailing opinion, forfaiting is legally based on a sales contract in accordance with §§ 433 ff. BGB . This purchase contract is a so-called purchase of accounts receivable (legal purchase) within the meaning of § 453 BGB, to which the provisions on the purchase contract are to be applied accordingly. If a claim is sold in the context of forfaiting, the transaction of disposal of the purchase contract consists in its assignment according to §§ 398 ff. BGB. Therefore, the provisions of §§ 398 ff. BGB that apply to the assignment of a claim must be taken into account at the same time , in particular the transfer of full rights ( § 401 BGB) and the notification of assignment ( § 409 BGB).

As a result of the modernization of the law of obligations in January 2002, doubts have arisen as to which legal norm has led to legal liability since then, because it is no longer expressly regulated. Because the unambiguous regulation of § 437 BGB (old version) is no longer available, there is still no prevailing opinion as to who is liable for existing public deficiencies. Some of the specialist literature is of the opinion that the failure to procure a claim represents a non-fulfillment of the obligation to transfer from § 433 Paragraph 1 Clause 1 BGB, so that the legal liability remains with the seller and the seller is responsible for suspected fault ( § 280 Paragraph 1, § 276 para. 1 sentence 1 BGB). Another view assumes that the purchase of the receivable is effective according to § 311a para. 1 BGB, but the seller is liable according to § 311a para. 2 BGB if he knew the non-existence of the claim or was responsible for his lack of knowledge. In any case, the seller of a claim has to ensure that the sold claim exists and is free of third party rights. The existing legal uncertainty can only be eliminated by appropriately drafting the forfaiting contracts, such as the forfaitist's express guarantee liability for the verity risks. It can be agreed that the seller should be liable in the event of fault - or regardless of fault - according to the provisions of § 311a Paragraph 2 BGB ( compensation for damages or reimbursement of expenses). The buyer is also entitled to withdraw from the contract in accordance with Section 326 (5) of the German Civil Code (BGB) when acquiring non-existent claims.

In terms of tax law, the acceptance of a purchase contract presupposes that the risk of the economic usability of the receivables (credit risk) passes to the purchaser, so there is no possibility of recourse; According to the rules of sales law, the seller is only liable for the legal existence and future emergence (verity) of the claims sold. The fake forfaiting is classified as a loan according to §§ 488 ff. BGB.

Forfaiting as a means of export financing

Particularly for medium-sized companies are factoring and forfeiting as funding important because the debt finance through traditional bank loans increasingly more difficult. In business life, forfaiting for export financing is becoming increasingly important, since lending by credit institutions is made more difficult due to stricter banking supervisory regulations ( Basel II ) and therefore supplier credits have to be taken out.

history

Forfaiting goes back to the Soviet Union . During Richard Nixon's visit to Moscow in May 1972, American wheat deliveries for the Soviet Union were agreed. As a result, the Soviet Union also bought wheat in Europe because of a long period of drought. Because of the shortage of foreign exchange , the Soviet Union did not pay immediately, but rather through a medium-term change in the state-owned Soviet foreign trade bank under a guarantee from the Soviet state after discounting at Western European banks. The purchase of accounts receivable was part of the discounting process, while the guarantee by bills of exchange led to a false forfaiting.

Forfaiting process

The importer provides security for a supplier credit granted to him (e.g. in the form of a bank guarantee on a promissory note or by opening a deferred payment letter of credit ). The exporter (forfaitist) sells the claim minus interest to the forfaiteur (bank of the exporter) and transfers the rights from the hedging instrument to the latter. When due, the forfaiteer collects the amount and has the interest included in the amount to be paid by the customer as profit.

Requirement for the demands

• short, medium or long term exposures
• must be abstract and detached from the basic business
• Debtor of impeccable creditworthiness be
• Country (domicile) of the importer's bank considered internationally creditworthy
• The claim must be in hard currency (e.g. euros , US dollars )
• Claims must be assignable
• Claims must be free from third party rights.

Advantages for the exporter

• quick cash (by selling to bank)
• Transfer of the default risk
• full balance sheet relief (cash instead of receivables)
• full debt financing (no own funds)
• no credit insurer coverage required
• The exchange rate risk ceases at the time the receivables are sold
• the forfaiter takes over the collection function
• Financing costs lower than with other forms of financing, as the creditworthiness of the debtor i. d. Usually better than that of the seller of the receivables.

Forfaiting as a means of leasing refinancing

Economical meaning

In addition to conventional borrowing, forfaiting is the most important form of refinancing for leasing companies. The leasing companies create liquidity for the purchase of the next leasing objects, save taxes and avoid costs that arise when collecting the sold receivables.

The FlowTex fraud illustrates the economic importance of forfaiting for leasing refinancing. In this case, the largest financial fraud in Germany, which has led to a loss in the billions, the forfeiting of the lease payments by leasing companies was part of the snowballing -like cash cycle. Until the fraud system was discovered, the forfaited leasing installments were paid from the purchase price for new, non-existent leasing devices.

Forfaiting process

The lessor purchases the leased item in order to lease it to the lessee. To refinance the purchase price, as a forfaitist, he sells his claims to payment of the leasing installments from the leasing contract to the bank as a forfaiter. The bank collects the leasing installments when they are due. The purchase price for the leasing installments corresponds to their present value minus administration costs and VAT.

With the purchase of the lease receivables, the bank, as a forfaiteer, also takes on the credit risk , i.e. the risk of the lessee's inability to perform, which it must check beforehand in accordance with the provisions of the German Banking Act (KWG). Recourse in the event of the lessee's insolvency is excluded.

As security - in particular to secure its claim from the legal liability - the bank usually has the leased property transferred or, if the supplier retains ownership, the expectant rights are transferred. In contrast to forfaiting export transactions, leasing forfaiting is based on a continuing obligation that has not yet been settled; there is therefore the possibility that disruptions in performance will affect the legal existence of the receivable sold.

The sold receivables are usually assigned as a silent assignment without disclosure to the lessee. The advance assignment of the leasing installments is also insolvency-proof in the insolvency of the forfaitist (lessor).

Tax benefits

If the default risk is also transferred to the banks, such forfaiting agreements with banks are not considered to be long-term loan agreements within the meaning of the Trade Tax Act , and leasing companies do not pay any long-term interest on the forfaiting amounts. Forfaiting not only reduces the leasing company's credit exposure, it also enables financing that is exempt from trade tax .

Forfaiting does not benefit from trade tax. According to § 8 No. 1a sentence 3 GewStG , the computational effort in the course of forfaiting pending contracts must be fictitiously added to the profit from commercial operations according to § 7 GewStG. That means, as a result, the business tax base increases.

Forfaiting in the public sector

As part of the public-private partnership awarded (PPP or PPP) contracting authority - federal government , states and municipalities whose municipal enterprises or public companies - some of their construction and renovation projects under PPP programs. For this purpose, a project company is set up that has rent claims, claims from leasing fees or license claims against the public sector. The project company sells these receivables to a bank as part of forfaiting. The granting of credit to a project company is a constitutive element of a PPP structure. The bank acquires these claims from the project company, which is organized under private law. At the same time, the public debtor expresses an express waiver of objection.

Waiver of objection

The decisive factor is the waiver of objection, in particular due to poor performance , rights of avoidance , set-off , retention and other rights of refusal of performance by the public third-party debtor . This waiver of objection means that the forfaiting bank remains unaffected by service disruptions within the contractual relationship between the municipality and the project company. It must also be ensured that forfaiting is at least the amount of the loan service. The bank is then positioned as if it had concluded the loan agreement with the municipality, because the loan servicing is not affected by any service disruptions within the contractual relationship between the municipality and the project company. This construction is considered "a declaration of liability equivalent to the express guarantee" according to § 70 No. 1 b SolvV, because the municipal payment obligation has been completely detached from the basic transaction and therefore the municipality still has to pay even if it no longer receives any consideration from the basic transaction . As a result, from the point of view of the credit institutions, this construction is a municipal loan .

"Forfaiting with waiver of objection" are all forms of financing in which a project company transfers its claims from a PPP contract in whole or in part to the financing banks and the public client exempts these claims. The essence of forfaiting with waiver of objections - which is part of the market standard - consists in exchanging part of the project risks for the lower credit risk of the public sector. There is therefore no economic risk transfer from the public to the private sector. Usually only that part of the claims is waived with an objection waiver that is required to cover the debt service. Such a transaction is rounded off by the fact that the project company's claim to payment of damage in the event of premature termination of the contract against the municipality is assigned to the bank and the municipality waives the objections to which it is entitled.

Authorization under local law

In some municipal regulations, municipal forfaiting with the waiver of objections requires the approval of the municipal supervisory authority , but is viewed as subject to municipal law approval, since for the public sector, forfaiting for the investing part of a PPP project does not represent any additional risks.

• Because the public sector is also the debtor in the case of public self-realization in the traditional way of municipal credit.
• While in a PPP project the public sector does not begin paying the remuneration until after construction has been completed, the public sector has to pay for the construction progress in the conventional manner when it is implemented.

The ability of a PPP contract to be approved under municipal law , which is a legal transaction similar to a credit ( e.g. Section 82 (5) Saxon GemO), depends in particular on the following two requirements:

• The profitability of a PPP project compared to a conventional solution must be proven.
• The municipality must also be able to meet its long-term obligations to pay ongoing PPP installments, taking into account its other tasks.

Advantages and disadvantages of PPP forfaiting

The following are seen as advantages of municipal forfaiting in particular:

• The reduction of the financing requirement and thus also the relief of the municipal budget through interest savings due to municipal conditions (without guarantee).
• The reduction of the interest rate risk during the forfaiting period, since fixed interest rates of more than 10 years can be agreed with the investor and the planning and calculation security can be improved.
• The objection u. A declaration of objection waiver as a financial security by the municipality is not counted towards the guarantee framework, because it works like a guarantee, but is not legally legal.
• The trade tax relief for the investor due to the lack of permanent debt.

Complete forfaiting from the outset with no defense in case of poor performance in relation to future trades is viewed critically.

Differentiation between factoring and forfaiting

Forfaiting contains contractually specific requirements, so it is legally to be qualified as a species purchase . Factoring, on the other hand, also relates to the purchase of claims that arise later and are still unknown at the time the contract is concluded and is therefore a generic purchase. This difference is expressed when the seller of the receivables is liable. If a sold claim does not exist or if it is not assignable or if it is subject to defenses, the seller of the receivables can replace it with another claim in the case of factoring; in the case of forfaiting, however, he is liable for damages under Section 311a (2) sentence 1 BGB. This is a case of the initial impossibility, since when purchasing a species, the defective claim cannot be replaced by a defect-free one.

Risk of fraud

Factoring and forfaiting are subject to the risk that receivables that do not even exist are sold and assigned to the factor bank or the forfaiter. Admittedly, these risks are part of the debt seller's liability, but they are ineffective if he has used the purchase price proceeds for other purposes with criminal intent. Spectacular cases of fraud in factoring (especially Balsam AG ) have caused great damage because these forms of financing make it easier to sell bogus receivables. Balsam AG had invented claims in 1993 "simply in order to obtain liquid funds by selling them to Procedo GmbH ." The fraud was noticed in June 1994. FlowTex sold drilling machines, 85% of which did not exist, on a sale-lease-back basis . Factor or forfaiter must therefore permanently ensure through suitable control measures that there is no verity risk for them. In particular, balance confirmations or acknowledgments of debt can be obtained from the debtor .

See also

• Vendor loan
• Factoring

Individual evidence

1. ↑ ^{a b} BGH, judgment of November 10, 2004 (PDF; 113 kB), Az.VIII ZR 186/03, full text
2. ↑ cf. Georg Obst / Otto Hintner, Geld-, Bank- und Börsenwesen 39th edition, p. 478; Bank Lexikon (Gabler), 10th edition. Keyword “Forfaiting”; Vahlens Großes Wirtschaftslexikon , 2nd edition. Keyword “Forfaiting”; Michael Martinek, Modern Contract Types Vol. I, p. 241 f .; Count v. Westphalen, Rechtsprobleme der Exportfinanzierung 3rd edition, p. 483
3. ↑ BGH NJW 1994, 2483, 2484 ( Memento of the original from July 18, 2014 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. 
4. ↑ ^{a b} Hartmut Oetker / Felix Maultzsch, contractual obligations , 2007, p. 61.
5. ↑ ^{a b} Elisabeth Schütze, Zession und Einheitsrecht , 2005, p. 235f.
6. ↑ Rolf Bergjahn, The Effects of the Law of Obligations Reform 2002 on Company Acquisitions , 2003, p. 51
7. ^ Wolfgang Fikentscher / Andreas Heinemann, Schuldrecht , 2006, p. 450
8. ↑ Claudia Bannier, The Liability Problems under the Law of Obligations and Bill of Exchange Law in the Forfaiting of Export Claims , 2005, p. 8 ( Memento of the original of July 14, 2012 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 1.3 MB) 
9. ↑ Claudia Bannier, The liability problems under the law of obligations and bill of exchange law in the forfaiting of export claims , 2005, p. 46
10. ↑ Ulf-Gregor Schulz / Uni Leipzig, The purchase of receivables - Effects of the law of obligations reform in factoring and forfaiting , June 2002, p. 22 (PDF; 133 kB)
11. ↑ BFH judgment of May 5, 1999, Az .: XI R 6/98, BStBl. 1999 II p. 735
12. ↑ OSTRANDEL: grain for Moscow . In: Der Spiegel . No. 44 , 1972 ( online ).
13. ↑ Schmalenbach, in: Ebenroth / Boujong / Joost, HGB, Commentary (Volume 2: Banking and Stock Exchange Law), V Rn. 60.
14. ↑ Leasing Glossary ( Memento of the original from January 17, 2005 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. of Deutsche Leasing . 
15. ^ Yvonne Matz, Regulation of typical leasing transactions in the new law of obligations , dissertation Karlsruhe 2002, p. 62.
16. ↑ Martinek / Oechsler in: Schimanski / Bunte / Lwowski, Banking Law Handbook, Volume II, § 103 Rn. 34.
17. ↑ Leasing Glossary ( Memento of the original from January 17, 2005 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. Deutsche Leasing. 
18. ↑ BMF letter of January 9, 1996 - IV B 2 - S 2170 - 135/95.
19. ↑ BStBl I 2008, 730.
20. ↑ PPP series, Volume 1, Effects of the financial market crisis on PPP, especially in building construction , November 2010, p. 65 (PDF; 1 MB)
21. ↑ on completed projects cf. Bauakademie Biberach "Chance PPP" ( Memento of the original from August 15, 2007 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. , P. 12 f. University projects can also be financed by PPP, cf. Hochschul Informations Service HIS GmbH "PPP - Suitability and Approach for University Projects" ( Memento of the original dated August 12, 2011 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 1.9 MB)  
22. ↑ BAFin circular (then BAKred) dated August 6, 1997, case no. III 1 - 11.33.10.1
23. ↑ ^{a b} Bauakademie Biberach “Chance PPP” ( Memento of the original from August 15, 2007 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. , P. 9. 
24. ↑ Financing of PPP / Öpp projects (PDF; 230 kB), IHK Bielefeld.
25. ↑ PPP - New ways of realizing public building projects  ( page no longer available , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice. , WL Bank.  
26. ↑ Public private partnership in Lower Saxony , N-Bank.
27. ↑ Werner Rügemer, "Forfaiting with no objection" article in Friday of September 7, 2007.
28. ↑ Claudia Bannier, The liability problems under the law of obligations and bill of exchange law in the forfaiting of export claims ( memento of the original of July 14, 2012 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. , 2005, p. 9 (PDF; 1.3 MB) 
29. ↑ ^{a b} Marc Albertus, The claim for reimbursement from § 31 Paragraph 1 GmbHG after restoration of the share capital , 2004, p. 23 ff. (PDF; 1.5 MB)
30. ↑ BGH, judgment of November 10, 2004, Az .: VIII ZR 186/03

Please note the information on legal issues!

literature

Michael Hakenberg, Das Forfaitierungsgeschäft, in: Ebenroth / Boujong / Joost, HGB, Commentary (Volume 2: Banking and Stock Exchange Law), 2nd edition 2008, V Rdn 35 ff., ISBN 978-3-8006-3382-1