Liability and Financial Guarantee

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BC12-002/4400

IMPLEMENTATION OF THE PACKAGE TRAVEL DIRECTIVE IN THE MEMBER STATES

LIABILITY AND FINANCIAL GUARANTEE

AUSTRIATOUR OPERATOR TRAVEL AGENT

Liability for the proper performance of thepackage travel contract

Yes No

Financial guarantee covering the packagetravel contract

Yes No

Form(s) of the financial guarantee Insurance, bank guarantee, guarantee of a statutory bodySpecial note: insurance used by15% of TO, bank guarantee by 85%

-

Amount of the financial guarantee Basis for calculation: annual turnover of the previous year Amounts:

Turnover up to 100,000 €: 10,000 € (basic minimum amount) Turnover up to 220,000 €: 20,000 €

Turnover up to 330,000 €: 30,000 €. Turnover over 330,000 €: 8% of annual turnover, with a minimum of 72,600 € and provided TO has a quarterly

certification of a tax consultant, otherwise, 10% of annual turnover.

TO selling/offering for sale packages including charter flights: 10% of the annual turnover. Guarantee musthowever amount to a minimum of 363,000 €, irrespective of the actual annual turnover. Only TO offering charterflights occasionally that have been fully paid in advance can benefit from a reduced guarantee below 363,000 €.

-

Minimum amount that financial guarantee mustcover

See above -

Legal obligation of separate deposit in additionto financial guarantee

No Even if not required by law, provider of the financial guarantee may ask a separate additional deposit, the

amount of which will depend on the individual business relationships-

Average amount spent on annual basis for thefinancial guarantee -

Competent compliance authority for thefinancial guarantee

Federal Ministry of Economy, Family and Youth -

Special remarks there is an amendement in progress to raise the financial guarantee to 12%

-



BC12-002/4400



BELGIUMTOUR OPERATOR TRAVEL AGENT


Yes No


Yes Yes

Form(s) of the financial guarantee Insurance Insurance

Amount of the financial guarantee 100% of annual turnover of previous year must becovered

The insurer may request an additional guarantee,depending on the financial situation of the TO.

Equity must never be lower than 25,000 €

100% of annual turnover of previous year must becovered

The insurer may request an additional guarantee,depending on the financial situation of the TA.

Equity must never be lower than 25,000 €

Minimum amount that financial guaranteemust cover

No No

Legal obligation of separate deposit inaddition to financial guarantee

No No

Average amount spent on annual basis forthe financial guarantee

Amount: 0,15 % of annual turnover of the previousyear

Amount: 0,01% of the annual turnover of theprevious year when sells packages of TO

Competent compliance authority for thefinancial guarantee Belgian Federal Ministry of Economy Belgian Federal Ministry of Economy

Special remarks As from 2012 the premium will be higher +/-0,20%due to some bankruptcies

As from 2012 the premium will be higher +/-0,11%due to some bankruptcies



BC12-002/4400



BULGARIATOUR OPERATOR TRAVEL AGENT


Yes No


Yes No

Form(s) of the financial guarantee Insurance -

Amount of the financial guarantee Basis for calculation: annual turnover the previous year.For a minimum turnover of 25,000 €: - Minimum sum to be insured: 7,500 € - Minimum insurance premium: 150 €

-


7,500 € -


No -


minimum insurance premium: 150 € -

Competent compliance authority for the

financial guarantee

Ministry of Economy, Energy and Tourism -

Special remarks



BC12-002/4400



CYPRUS

TOUR OPERATOR TRAVEL AGENT


Yes No


Yes No

Form(s) of the financial guarantee Bank guarantee, insurance -

Amount of the financial guarantee The guarantee must cover 20% of annual turnover of theprevious year.

A separate deposit may be given to the bank providing theguarantee, depending on its charges. In addition, the

Association of Cyprus Travel Agents charges a specificamount for administrative expenses.

-


See above -


No -


-


financial guarantee

ACTA (Association of Cyprus Travel Agents) as well as theMinistry for Commerce & industry & tourism

-

Special remarks Agencies have to deposit 12,000 € to obtain travel agencylicence, another 12,000 € bank guarantee for outgoing

travel, both in favour of the Cyprus Tourism Organisation(these 2 amounts will be soon united to one bank guarantee)

Agencies have to deposit 12,000 € to obtaintravel agency licence



BC12-002/4400



DENMARKTOUR OPERATOR TRAVEL AGENT


Yes Yes

Financial guarantee covering the package travelcontract

Yes Yes

retailares for foreign TO´s only

Form(s) of the financial guarantee Guarantee fundThe required guarantee for TO´s is based on his annual turnover of the previous year, and follows apre-set scale established by law. The guarantee itself can be in various forms, ranging from financialbank guarantees to security in the TO’s assets. The guarantee is higher if charter services constitute

more than 50% of turnover.

Guarantee fund

Amount of the financial guarantee Basis for calculation: annual turnover of the previous year Amounts:

- min. DKK 0 for very small turnovers i.e. less than DKK 250,000- max. DKK 2,5 million for turnovers of more than DKK 250 million + 1 million per additional DKK 100

million- for charters the maximum amount is increased to DKK 30 million for turnovers of more than DKK 700

million + 5 million pr. additional 200 million1

same as TO´s


See above same as TO´s

Legal obligation of separate deposit in additionto financial guarantee

No No

Average amount spent on annual basis for thefinancial guarantee

Competent compliance authority for the financialguarantee

Travel Guarantee Fund (RGF) Travel Guarantee Fund (RGF)

Special remarks turnover 250,000-5 million DKK (guarantee = 300,000 DKK), turnover 5 million-10 million (guarantee =500,000 DKK), turnover 10 million-15 million (guarantee = 750,000 DKK) etc.

intermediary acting on behalf ofan organiser is liable by law

1 The Travel Guarantee Fund can use a series of criteria much like the IATA financial criteria to ascertain the “true” status o f a company at all times (i.e. the seriousness and solidity of the company).

These assessments can provide the basis for an extraordinary demand for additional guarantee for a period or until the Fund is satisfied that the company has dealt with the issues that were thecause of the increased guarantee.



BC12-002/4400



ESTONIA



Yes No


Yes Yes

Form(s) of the financial guarantee Insurance, bank guarantee Insurance, bank guarantee

Amount of the financial guarantee Basis for calculation: planned total annual sales- Domestic packages: not less than 3% of the planned total annual

sales of packages, min. 1,300 € - Packages based on charter and regular flights: not less than 7%

of the planned total annual sales of packages, min. 32,000 € - Packages based on other modes of transport: not less than 7%

of the planned total annual sales of packages, min. 13,000 €

Related to percentage of plannedannual sales of packages and to on

behalf of which TO is acting(EEA, Non EEA or Estonian TO)

1% - 3% - 7%2


1,300 € - 13,000 € - 32,000 € dependig on the area of activity Min. 13,000 € to 32,000 €


No No


Competent compliance authority for thefinancial guarantee Consumer Protection Board Consumer Protection Board

Special remarks intermediary acting on behalf of anorganiser is liable by law

2If acts as agent for TOs operating outside the EEA: not less than 7% of the planned total annual sales of packages, min. 32.000 €. If acts as agent for TOs operating in the EEA: not less than 3% of

planned total annual sales of packages, min. 13.000€. If acts as agent for Estonian TOs: not less than 1 % of the planned total annual sales of packages, min. 13.000€



BC12-002/4400



FINLAND



YesNo

Yes if acts on behalf of a foreign TO


YesNo

Yes if acts on behalf of a a foreign TO

Form(s) of the financial guarantee Bank guarantee, insurance, bank or other letter of security same as TO´s

Amount of the financial guarantee In order to cover transportation and accommodationincluded in the package travel contract, the financial

guarantee is calculated by using a percentage which isbased on the number of passengers and the duration of the

tour.In order to cover reimbursement of advanced payment whenthe package is cancelled, the financial guarantee must cover

the whole amount paid by the consumer in advance.

same as TO´s


No No


No No



Finnish consumer agency Finnish consumer agency

Special remarks



BC12-002/4400



FRANCETOUR OPERATOR TRAVEL AGENT


Yes Yes


Yes Yes

Form(s) of the financial guarantee Guarantee fund, insurance or credit company bond same as TO´s

Amount of the financial guaranteeBasis for calculation:

annual turnover of the previous year Amount: must cover 10% of the annual turnover of the

previous year (direct sales to public, not sales through TAs)

Basis for calculation:annual turnover of the previous year

Amount: must cover 10% of the annualturnover of the previous year (direct sales of

TA to public made in his own name)


100,000 € 100,000 €


No No



Financial Guarantee Supplier same as TO´s

Special remarks 80% of TO/TA enjoy the guarantee provided byL´Association Professionnelle de Solidarité de Tourisme

TA concludes the contract in his ownname with the consumer



BC12-002/4400



GERMANY



Yes No


Yes No

Form(s) of the financial guarantee Insurance (most usually) or bank guarantee -

Amount of the financial guarantee Basis for calculation: annual turnover of the previous yearThe criteria for calculating the financial guarantee are d efined on individual basis by the

provider of the financial guarantee, which is most often an insurance company.Guarantee provider may require an additional separate deposit.

Each provider of a financial guarantee may limit the guarantee that it provides to a

maximum amount of 110 million € / year.This limitation is not per organiser but per financial guarantee provider.

If the total amounts to be reimbursed exceed the limit, the individual reimbursementclaims will be reduced proportionally

(not the case yet in practice)

-


No -


No -


Up to 0,28% of the turnover in general(less if a high cash deposit or bank guarantee is logded jointly)

-


Local competent Trade Office -

Special remarks The percentage of the annual turnovers to be covered by the financial guarantee differs, it dependson the solvency of the TO.

-



BC12-002/4400



GREECE



Yes No


Yes Yes

Form(s) of the financial guarantee Insurance or bank guarantee -

Amount of the financial guaranteeFixed amount: 11.738,81 €

Exceptionally 5.869,41€ on islands Tilos, Kastelorios and all borderisland in Greece with up to 400 residents.

Fixed amount: 11.738,81 € Exceptionally 5.869,41€ on islands

Tilos, Kastelorios and all border islandin Greece with up to 400 residents -


See above -


No -



Greek National Tourism Organisation (GNTO) -

Special remarksTravel agencies provide a financial guarantee of a limited amount

to the GNT when applying for a licence(to cover the general liability)

TA may be liable if he concludes

contracts in his own name with theconsumer without revealing theexistence of another organiser.



BC12-002/4400



HUNGARY



Yes No


Yes No

Form(s) of the financial guarantee Insurance, bank guarantee or cash deposit -

Amount of the financial guarantee Basis for calculation: annual turnover of the previous yearGuarantee must cover:

- 20% of the annual turnover of the previous year(in case of charter flights organisers)

- 12% of the annual turnover of the previous year(non charter flights activity)- 3% (domestic packages)

-


66,000 € (charter flights organisers)16,000 € (non charter flights activity)

1,700 € (domestic packages) -


No -


cca 3-6% of the amount of financial guarantee -


Hungarian Trade Licensing Office -

Special remarks A combination of the 3 possible forms of financial guarantee isallowed, insurance being used mostly.

-



BC12-002/4400



IRELAND



Yes No


YesNo

Yes if acts on behalf of a foreign TO

Form(s) of the financial guaranteeInsurance, cash deposit, collective bond

same as TO´sif TO does not have a place of

business in Ireland

Amount of the financial guarantee Basis for calculation: annual turnover of the previous year andthe projected turnover for coming year

Guarantee must cover 10-15% of the annual turnover of theprevious year and the projected turnover for coming year,

depending on the type of guarantee.

same as TO´sif TO does not have a place of

business in Ireland


No No


No No



financial guarantee

Commission for Aviation Regulation and the National Consumer

Agency

same as TO´s, if TO does not have a

place of business in IrelandSpecial remarks The most used form may be insurance (cca 60%)



BC12-002/4400



ITALY



Yes No


Yes Yes

Form(s) of the financial guarantee Guarantee fund Guarantee fund

Amount of the financial guarantee The guarantee fund is financed by a contribution ofTO and TA amounting to 2% of the premium of theirinsurance policy covering their professional liability.

same as TO´s

Minimum amount that financial guaranteemust cover No No


No No



Dipartimento per lo Sviluppo e la Competitività delTurismo presso la Presidenza del Consiglio dei

Ministri

Dipartimento per lo Sviluppo e la Competitività delTurismo presso la Presidenza del Consiglio dei

Ministri

Special remarks Every travel agency (TO or TA) pays annually to theGuarantee Fund 2% of the premium of its policy of

civil professional liability. The premium of the policy isfixed on the turnover, the contribution to the fund is in

proportion to this. Guarantee covers 100% of thepackage (within the limits of Fund availability).



BC12-002/4400



LATVIA



Yes Yes


Yes No


Amount of the financial guarantee Fixed sum negotiated on individual basis with theprovider of the guarantee

-


20,000 LVL (cca 28,500 €)


No -


500 LVL (cca 700 €)


Consumer Rights Protection Centre -

Special remarks Some years ago, the financial guarantee had to cover8% of the annual turnover but this rule has been

abolished-



BC12-002/4400



MALTA



Yes Yes


Yes Yes

Form(s) of the financial guarantee No adequate or suitable insurance or other form ofcover available to local TO&TA’s.

Tour operators have to fend for themselvessame as TO´s

Amount of the financial guarantee None(no minimum or maximum limit is established by law)

same as TO´s

Minimum amount that financial guaranteemust cover No


No No


- -


Malta Tourism Authority same as TO´s

Special remarks



BC12-002/4400



NETHERLANDS



Yes No


YesNo

Yes if considered as a TO (casesof dynamic packaging)

Form(s) of the financial guarantee Guarantee Fund (SGR) -

Amount of the financial guarantee Basis for calculation: annual turnover of the previous year. 100% of the annual turnover ofthe previous year must be covered.

The SGR requires a bank guarantee that is variable, with a minimum of 1,5% of the annualturnover at risk (minimum 5,000 €)

The SGR has, from the accumulated consumer fees, built up a financial reserve over theyears, which at present allows it to cover the risks of failures out of the reserve. Therefore,besides a small membership fee and the bank guarantee requirement, participation to the

fund is free for the organiser and no fee is applied per consumer or package.

same as TO´sif considered as a TO

(cases of dynamic packaging)


- -


No No


300 – 1,200 € as membership fee to the fund -


Consumentenautoriteit(is actively checking since 2008) -

Special remarksThe Guarantee Fund has built up a reserve in 20-30 years, the risks (failures) are now covered by the yearly interests on the

reserve



BC12-002/4400



POLAND



Yes No


Yes No3

Form(s) of the financial guarantee Bank guarantee or insurance

Amount of the financial guarantee Basis for calculation: annual turnover of previous year. Amount: 3-20% of turnover and not less than 4,500 € - 67,000 € depending

on the destination group, means of transport, time and amount of depositcollection. The insurance company may require an additional deposit as a

part of the guarantee towards the insurance company.

No3


4,500 € - 67,000 €


No No



Regional Marshall’s Offices No3

Special remarksExample of the amounts of financial guarantee:

non-flights packages within Europe – 10%, flights packages within Europe – 17%(if more than 30% collected from clients in period 90-180 days prior to departure)

3 Yes, if TA acts on behalf of the client, the competent authority is the same as TO



BC12-002/4400



PORTUGAL



Yes Yes


Yes Yes

Form(s) of the financial guarantee TO/TA must have 2 types of financial guarantees:1. insurance

2. contribution to a fund

Amount of the financial guaranteeBasis for calculation: The insurance must be of a minimum amount of 75,000 €. The contribution to the

fund is of 2,500 € per TO/TA


- -


No No



Turismo de Portugal I.P

Special remarksIn Portugal, the legislation only knows the notion of “travel agent” and does not make a distinction between

tour operators and travel agents



BC12-002/4400



ROMANIA



Yes Yes


Yes Yes

Form(s) of the financial guarantee Insurance for insolvency/bankruptcy same as TO´s

Amount of the financial guarantee Basis for calculation:Fixed amount: 50,000 $

Fixed amount: 10,000 $


No No


No No


150-350 $ 150-350 $


Ministry for tourism Ministry for tourism

Special remarks Travel agent is contractually liable if he concludesthe contract with the consumer in his own name



BC12-002/4400



SLOVAKIA



Yes No


Yes No


Amount of the financial guarantee Basis for calculation: annual turnover of the previousyear

Guarantee must cover at minimum 25% of the annualturnover of the previous year

-


25% of the annual turnover-


No -


Competent compliance authority for thefinancial guarantee Slovak Trade Inspection (SOI)

(state supervisory body)-

Special remarks



BC12-002/4400



SPAINTOUR OPERATOR TRAVEL AGENT

Liability for the proper performance of the packagetravel contract

Yes Yes

Financial guarantee covering the package travelcontract Yes Yes

Form(s) of the financial guarantee Collective guarantee or individual guarantee(bank guarantee, insurance, cash deposit) same as TO´s

Amount of the financial guarantee Basis for calculation: Fixed amountDepends on the specific regulation of each Spanish Region (Comunidad

Autónoma). In most of the Regions, the financial guarantee is a fixed amount,based on the actual activities:

- TO exclusively: 120,202,42 € - TO and TA activity: 180,303,63 €

The Region of the Canary Island requires a single guarantee of 60,102,21 €,irrespective of the activities.

Basis for calculation: Fixed amount

- TA exclusively: 60,101,21 €

The Region of the Canary Island requires a singleguarantee of 60,102.21 €, irrespective of the activities.

Minimum amount that financial guarantee must cover120,202,42 € 60,101,21 €

Legal obligation of separate deposit in addition tofinancial guarantee

No No

Average amount spent on annual basis for the

financial guarantee

Competent compliance authority for the financialguarantee DG Tourism of every Region (Comunidad Autónoma)

DG Tourism of every Region(Comunidad Autónoma)

Special remarks Financial guarantee is a fixed amount regardless of the company size,insurance is the most used form

The law provides a joint and several liability of both(organiser and retailer)



BC12-002/4400



SWEDENTOUR OPERATOR TRAVEL AGENT

Liability for the proper performance of thepackage travel contract Yes No

Financial guarantee covering the package travelcontract

Yes Yes

Form(s) of the financial guarantee Bank guarantee, insurance same as TO´s

Amount of the financial guarantee Basis for calculation:The authority calculates a fixed amount of the guarantee on the basis of the

number of sold packages, the number of expected sales in the coming year, theprice and how long payments have to be made before departure.

The guarantee must, at all time, cover all payments made by consumers for

packages that have not yet started and the costs for repatriation of thoseconsumers actually travelling.The amount of the guarantee ranges between 5,500 € and 110,000,000 €.

The enforcement authority hasdecided that a retailer selling

packages arranged by an organizershall lodge a guarantee of at least

5,500 €.


5,500 € 5,500 €


No No

Average amount spent on annual basis for thefinancial guarantee


Kammarkollegiet(The Legal, Financial and Administrative Services Agency)

same as TO´s

Special remarks Providers of guarantee, in particular banks, may additionally require a counter-obligation from the organizer. This counter-obligation could be a deposit, blocked

bank account (escrow account), mortgage or personal guarantee.Insurance companies seldom require a counter-obligation but their fees are higher.

Travel guarantees have to be lodged for both business and leisure customers.

Financial guarantee provided by TA may notbe used if TO provides the guarantee.Therefore, consumer may only use TA

guarantee when TA sells a package of a TOnot established in Sweden and not providing

a guarantee in Sweden.



BC12-002/4400



UNITED KINGDOMTOUR OPERATOR TRAVEL AGENT

Liability for the proper performance of the package

travel contract Yes NoFinancial guarantee covering the package travel contract

Yes No

Form(s) of the financial guarantee Fund managed by the CAA(TO organising air packages (licensable) must have an ATOL and participate

in fund)Bond, insurance or trust account

(TO organising non-air packages (non-licensable))

-

Amount of the financial guarantee TO organizing air packages: £ 2,50 levy per passenger paid to the CAA fund(new ATOL holders are required to bond at 15% licensable turnover subject to

£ 40,000 minimum, this normally decreases over 4 years)

TO organizing non-air packages: minimum amount is the lower of £ 5,000 or10% of non-licensable turnover Above both calculated on the basis of historical turnover and projections for

the coming year. The financial guarantee must cover 100% of the annualturnover.

-

Minimum amount that financial guarantee must coverSee above No


No No

Average amount spent on annual basis for the financialguarantee

-


- UK Civil Aviation Authority (CAA) - Air Travel Organisers Licence (ATOL)scheme

- Bodies approved by B IS (Dept of Business, Innovation and Skills) e.g. ABTA, AITO, CTP, PSA

-

Special remarks



BC12-002/4400



CROATIA



Yes No


Yes No

Form(s) of the financial guarantee Insurance, fund or bank guarantee -

Amount of the financial guarantee Basis for calculation:annual turnover of the previous year

Guarantee must cover at minimum 10% of the annualturnover

The percentage will vary taking into account the amountof advance payments made by consumers.

-


10% of the annual turnover -


No No


Minimum 4,000 HRK (approx. 535 EUR) -


State Inspectorate -

Special remarks



BC12-002/4400



NORWAY


Liability for the proper performance of the package travelcontract

Yes Yes

Financial guarantee covering the package travel contract Yes No

Form(s) of the financial guaranteeBank guarantee and participation in a fund -

Amount of the financial guarantee Basis for calculation:turnover in 3 consecutive months: the “TOP” month + the month on each side

The guarantee is calculated on the basis of and must cover the month in the previous yearwith the highest gross turnover, as well as the previous and the next months to that month.

The minimum amount of the financial guarantee is approximately of 31,000 €. Currently,participation in the fund does not entail payment of annual contributions because the fund

has sufficient financial means to cover potential bankruptcies. When the fund has usedmonies to cover expenses and refunds, it will decide how TOs shall re-built the fund either

by a one-time contribution or an annual contribution. In case of bankruptcies, TOs´guaranteeis primarily used, the fund only being used if the guarantee is not sufficient.

-

Minimum amount that financial guarantee must coverapprox. 31,000 € -

Legal obligation of separate deposit in addition to financialguarantee

No No

Average amount spent on annual basis for the financialguarantee -

Competent compliance authority for the financialguarantee The Fund administrator The Fund administrator

Special remarks Scale of financial guarantee (based on 3 months in question):Turnover 31,000-250,000 € – guarantee = 100% of the actual amount

Turnover 250,000-625,000 € – guarantee = 75% of the actual amount over 250,000 € Turnover 625,000-1,250,000 € – guarantee = 50% of the actual amount over 625,000 €

intermediary acting on behalf ofan organiser is liable by law



BC12-002/4400



SWITZERLAND



Yes Yes


Yes Yes

Form(s) of the financial guarantee Guarantee fund, insurance same as TO´s

Amount of the financial guarantee Basis for calculation:annual turnover of the previous year

Guarantee must cover 1% of the annual turnoverwith a minimum of 50,000 CHF

same as TO´s


50,000 CHF same as TO´s


No No


600 - 1,200 CHFdepending on the financial situation

same as TO´s


The Fund administrator

Special remarks The guarantee can be replaced by a deposit with aspecific bank. Special conditions have been negotiated

by the Guarantee Fund of the Swiss Travel Industry,e.g. annual interest, running of deposit free of charge

In case of bankruptcy of the retailer, the organisercan claim the money not received from retailerfrom the Guarantee Fund of the Swiss Travel

Industry

Liability and Financial Guarantee

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