Liability and Financial Guarantee

IMPLEMENTATION OF THE PACKAGE TRAVEL DIRECTIVE IN THE MEMBER STATES
LIABILITY AND FINANCIAL GUARANTEE

BC12-002/4400
CZECH REPUBLIC
TOUR OPERATOR
Liability for the proper performance of the package travel contract Financial guarantee covering the package travel contract Form(s) of the financial guarantee Amount of the financial guarantee
Yes Yes Mandatory insurance against the failure (no other forms available) Basis for calculation: annual turnover of the previous year. Guarantee must cover at minimum 30% of the annual turnover of the previous year 30% of the annual turnover Yes A legal mandatory deposit of 2% of the annual turnover of the previous year must be in addition lodged to the insurance company (to be used in case of insolvency) 0,5-1% of the annual turnover + deposit 2% Ministry for Regional Development (in charge of tourism) ACKA making efforts the legal deposit to be cancelled
TRAVEL AGENT
No No -
Minimum amount that financial guarantee must cover Legal obligation of separate deposit in addition to financial guarantee
Average amount spent on annual basis for the financial guarantee Competent compliance authority for the financial guarantee Special remarks

BC12-002/4400
AUSTRIA
TOUR OPERATOR
Liability for the proper performance of the package travel contract Financial guarantee covering the package travel contract Form(s) of the financial guarantee Amount of the financial guarantee Yes Yes Insurance, bank guarantee, guarantee of a statutory body Special note: insurance used by15% of TO, bank guarantee by 85%
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 must however amount to a minimum of 363,000 , irrespective of the actual annual turnover. Only TO offering charte r flights occasionally that have been fully paid in advance can benefit from a reduced guarantee below 363,000 .
TRAVEL AGENT
No No
-
Minimum amount that financial guarantee must cover Legal obligation of separate deposit in addition to financial guarantee Average amount spent on annual basis for the financial guarantee Competent compliance authority for the financial guarantee Special remarks
See above 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
Federal Ministry of Economy, Family and Youth
there is an amendement in progress to raise the financial guarantee to 12%

BC12-002/4400
BELGIUM
TOUR OPERATOR
Yes Yes Insurance 100% of annual turnover of previous year must be covered The insurer may request an additional guarantee, depending on the financial situation of the TO. Equity must never be lower than 25,000 No No Amount: 0,15 % of annual turnover of the previous year Belgian Federal Ministry of Economy As from 2012 the premium will be higher +/-0,20% due to some bankruptcies
TRAVEL AGENT
No Yes Insurance 100% of annual turnover of previous year must be covered The insurer may request an additional guarantee, depending on the financial situation of the TA. Equity must never be lower than 25,000 No No Amount: 0,01% of the annual turnover of the previous year when sells packages of TO Belgian Federal Ministry of Economy As from 2012 the premium will be higher +/-0,11% due to some bankruptcies

BC12-002/4400
BULGARIA
TOUR OPERATOR
Yes Yes Insurance 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 Ministry of Economy, Energy and Tourism
TRAVEL AGENT
No No -

BC12-002/4400
CYPRUS
TOUR OPERATOR
Yes Yes Bank guarantee, insurance The guarantee must cover 20% of annual turnover of the previous year. A separate deposit may be given to the bank providing the guarantee, depending on its charges. In addition, the Association of Cyprus Travel Agents charges a specific amount for administrative expenses. See above No
TRAVEL AGENT
No No -
ACTA (Association of Cyprus Travel Agents) as well as the Ministry for Commerce & industry & tourism Agencies have to deposit 12,000 to obtain travel agency licence, 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 obtain travel agency licence

BC12-002/4400
DENMARK
TOUR OPERATOR
Liability for the proper performance of the package travel contract Financial guarantee covering the package travel contract Form(s) of the financial guarantee
Yes Yes Guarantee fund The required guarantee for TOs is based on his annual turnover of the previous year, and follows a pre-set scale established by law. The guarantee itself can be in various forms, ranging from financial bank guarantees to security in the TOs assets. The guarantee is higher if charter services constitute more than 50% of turnover. 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 See above No
TRAVEL AGENT
Yes Yes retailares for foreign TOs only Guarantee fund
Amount of the financial guarantee
same as TOs
same as TOs No
Travel Guarantee Fund (RGF) 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.
Travel Guarantee Fund (RGF)
intermediary acting on behalf of an organiser is liable by law
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 the cause of the increased guarantee.

BC12-002/4400
ESTONIA
TOUR OPERATOR
Yes Yes Insurance, bank 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 1,300 - 13,000 - 32,000 dependig on the area of activity
No
TRAVEL AGENT
No Yes Insurance, bank guarantee Related to percentage of planned annual sales of packages and to on behalf of which TO is acting (EEA, Non EEA or Estonian TO) 1% - 3% - 7%2 Min. 13,000 to 32,000
No
2
Consumer Protection Board
Consumer Protection Board

If 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
TOUR OPERATOR
Yes Yes Bank guarantee, insurance, bank or other letter of security In order to cover transportation and accommodation included in the package travel contract, the financial guarantee is calculated by using a percentage which is based on the number of passengers and the duration of the tour. In order to cover reimbursement of advanced payment when the package is cancelled, the financial guarantee must cover the whole amount paid by the consumer in advance. No No
TRAVEL AGENT
No Yes if acts on behalf of a foreign TO No Yes if acts on behalf of a a foreign TO same as TOs
same as TOs
No No
Finnish consumer agency
Finnish consumer agency

BC12-002/4400
FRANCE
TOUR OPERATOR
Yes Yes Guarantee fund, insurance or credit company bond Basis 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) 100,000 No
TRAVEL AGENT
Yes Yes same as TOs Basis for calculation: annual turnover of the previous year Amount: must cover 10% of the annual turnover of the previous year (direct sales of TA to public made in his own name) 100,000 No
Financial Guarantee Supplier 80% of TO/TA enjoy the guarantee provided by LAssociation Professionnelle de Solidarit de Tourisme
same as TOs TA concludes the contract in his own name with the consumer

BC12-002/4400
GERMANY
TOUR OPERATOR
Yes Yes Insurance (most usually) or bank guarantee Basis for calculation: annual turnover of the previous year The criteria for calculating the financial guarantee are defined 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 reimbursement claims 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
The percentage of the annual turnovers to be covered by the financial guarantee differs, it depends on the solvency of the TO.
TRAVEL AGENT
No No -

BC12-002/4400
GREECE
TOUR OPERATOR
Yes Yes Insurance or bank guarantee Fixed amount: 11.738,81 Exceptionally 5.869,41 on islands Tilos, Kastelorios and all border island in Greece with up to 400 residents. See above No
TRAVEL AGENT
No Yes Fixed amount: 11.738,81 Exceptionally 5.869,41 on islands Tilos, Kastelorios and all border island in Greece with up to 400 residents -
Greek National Tourism Organisation (GNTO) Travel 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 the consumer without revealing the existence of another organiser.

BC12-002/4400
HUNGARY
TOUR OPERATOR
Yes Yes Insurance, bank guarantee or cash deposit Basis for calculation: annual turnover of the previous year Guarantee 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 A combination of the 3 possible forms of financial guarantee is allowed, insurance being used mostly.
TRAVEL AGENT
No No -

BC12-002/4400
IRELAND
TOUR OPERATOR
Yes Yes Insurance, cash deposit, collective bond Basis for calculation: annual turnover of the previous year and the projected turnover for coming year Guarantee must cover 10-15% of the annual turnover of the previous year and the projected turnover for coming year, depending on the type of guarantee. No No
TRAVEL AGENT
No No Yes if acts on behalf of a foreign TO same as TOs if TO does not have a place of business in Ireland same as TOs if TO does not have a place of business in Ireland No No
Commission for Aviation Regulation and the National Consumer Agency The most used form may be insurance (cca 60%)
same as TOs, if TO does not have a place of business in Ireland

BC12-002/4400
ITALY
TOUR OPERATOR
Liability for the proper performance of the package travel contract Financial guarantee covering the package travel contract Form(s) of the financial guarantee Amount of the financial guarantee Minimum amount that financial guarantee must cover Legal obligation of separate deposit in addition to financial guarantee Average amount spent on annual basis for the financial guarantee Competent compliance authority for the financial guarantee Special remarks
Yes Yes Guarantee fund The guarantee fund is financed by a contribution of TO and TA amounting to 2% of the premium of their insurance policy covering their professional liability. No No
TRAVEL AGENT
No Yes Guarantee fund same as TOs No No
Dipartimento per lo Sviluppo e la Competitivit del Turismo presso la Presidenza del Consiglio dei Ministri Every travel agency (TO or TA) pays annually to the Guarantee Fund 2% of the premium of its policy of civil professional liability. The premium of the policy is fixed on the turnover, the contribution to the fund is in proportion to this. Guarantee covers 100% of the package (within the limits of Fund availability).
Dipartimento per lo Sviluppo e la Competitivit del Turismo presso la Presidenza del Consiglio dei Ministri

BC12-002/4400
LATVIA
TOUR OPERATOR
Yes Yes Insurance or bank guarantee Fixed sum negotiated on individual basis with the provider of the guarantee 20,000 LVL (cca 28,500 ) No 500 LVL (cca 700 ) Consumer Rights Protection Centre Some years ago, the financial guarantee had to cover 8% of the annual turnover but this rule has been abolished -
TRAVEL AGENT
Yes No -

BC12-002/4400
MALTA
TOUR OPERATOR
Yes Yes No adequate or suitable insurance or other form of cover available to local TO&TAs. Tour operators have to fend for themselves None (no minimum or maximum limit is established by law) No No Malta Tourism Authority No same as TOs
TRAVEL AGENT
Yes Yes same as TOs same as TOs

BC12-002/4400
NETHERLANDS
TOUR OPERATOR
Yes Yes Guarantee Fund (SGR) Basis for calculation: annual turnover of the previous year. 100% of the annual turnover of the previous year must be covered. The SGR requires a bank guarantee that is variable, with a minimum of 1,5% of the annual turnover at risk (minimum 5,000 ) The SGR has, from the accumulated consumer fees, built up a financial reserve over the years, 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. No 300 1,200 as membership fee to the fund Consumentenautoriteit (is actively checking since 2008)
TRAVEL AGENT
No No Yes if considered as a TO (cases of dynamic packaging) -
same as TOs if considered as a TO (cases of dynamic packaging)
No -
The 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
TOUR OPERATOR
Yes Yes Bank guarantee or insurance 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 deposit collection. The insurance company may require an additional deposit as a part of the guarantee towards the insurance company. 4,500 - 67,000 No No
TRAVEL AGENT
No No3
No3
Regional Marshalls Offices

Example 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)
No3
Yes, if TA acts on behalf of the client, the competent authority is the same as TO

BC12-002/4400
PORTUGAL
TOUR OPERATOR
Yes Yes
TRAVEL AGENT
Yes Yes
TO/TA must have 2 types of financial guarantees: 1. insurance 2. contribution to a fund Basis 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 In 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
TOUR OPERATOR
Yes Yes Insurance for insolvency/bankruptcy Basis for calculation: Fixed amount: 50,000 $ No No 150-350 $ Ministry for tourism
TRAVEL AGENT
Yes Yes same as TOs Fixed amount: 10,000 $ No No 150-350 $ Ministry for tourism Travel agent is contractually liable if he concludes the contract with the consumer in his own name

BC12-002/4400
SLOVAKIA
TOUR OPERATOR
Yes Yes Insurance or bank guarantee Basis for calculation: annual turnover of the previous year Guarantee must cover at minimum 25% of the annual turnover of the previous year 25% of the annual turnover No
TRAVEL AGENT
No No -
Slovak Trade Inspection (SOI) (state supervisory body)

BC12-002/4400
SLOVENIA
TOUR OPERATOR
Yes Yes Insurance or bank guarantee Basis for calculation: Fixed amount: 41,730 41,730 No
TRAVEL AGENT
No No -
Tourism and Hospitality Chamber which is part of Commerce and Industry of Slovenia The sum of 41,730 is a fixed sum of the financial guarantee to be covered by TO regardless of the company size, namely the big company and the small company provide the same amount

BC12-002/4400
SPAIN
TOUR OPERATOR Liability for the proper performance of the package travel contract Financial guarantee covering the package travel contract Form(s) of the financial guarantee Amount of the financial guarantee Yes Yes Collective guarantee or individual guarantee (bank guarantee, insurance, cash deposit) Basis for calculation: Fixed amount Depends on the specific regulation of each Spanish Region (Comunidad Autnoma). 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. Minimum amount that financial guarantee must cover Legal obligation of separate deposit in addition to financial guarantee Average amount spent on annual basis for the financial guarantee Competent compliance authority for the financial guarantee Special remarks 120,202,42 No TRAVEL AGENT Yes Yes same as TOs Basis for calculation: Fixed amount - TA exclusively: 60,101,21
The Region of the Canary Island requires a single guarantee of 60,102.21 , irrespective of the activities. 60,101,21 No
DG Tourism of every Region (Comunidad Autnoma) Financial guarantee is a fixed amount regardless of the company size, insurance is the most used form
DG Tourism of every Region (Comunidad Autnoma) The law provides a joint and several liability of both (organiser and retailer)

BC12-002/4400
SWEDEN
TOUR OPERATOR Liability for the proper performance of the package travel contract Financial guarantee covering the package travel contract Form(s) of the financial guarantee Amount of the financial guarantee Yes Yes Bank guarantee, insurance 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, the price 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 those consumers actually travelling. The amount of the guarantee ranges between 5,500 and 110,000,000 .
TRAVEL AGENT No Yes same as TOs The enforcement authority has decided that a retailer selling packages arranged by an organizer shall lodge a guarantee of at least 5,500 . 5,500 No
5,500 No
Kammarkollegiet (The Legal, Financial and Administrative Services Agency)

Providers of guarantee, in particular banks, may additionally require a counterobligation 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.
same as TOs
Financial guarantee provided by TA may not be used if TO provides the guarantee. Therefore, consumer may only use TA guarantee when TA sells a package of a TO not established in Sweden and not providing a guarantee in Sweden.

BC12-002/4400
UNITED KINGDOM
TOUR OPERATOR Liability for the proper performance of the package travel contract Financial guarantee covering the package travel contract Form(s) of the financial guarantee Yes Yes 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)) 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 or 10% 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 annual turnover. See above No TRAVEL AGENT No No
Amount of the financial guarantee
No No -
- UK Civil Aviation Authority (CAA) - Air Travel Organisers Licence (ATOL) scheme - Bodies approved by BIS (Dept of Business, Innovation and Skills) e.g. ABTA, AITO, CTP, PSA

BC12-002/4400
CROATIA
TOUR OPERATOR
Yes Yes Insurance, fund or bank guarantee Basis for calculation: annual turnover of the previous year Guarantee must cover at minimum 10% of the annual turnover The percentage will vary taking into account the amount of advance payments made by consumers. 10% of the annual turnover No Minimum 4,000 HRK (approx. 535 EUR) State Inspectorate
TRAVEL AGENT
No No -
No -

BC12-002/4400
NORWAY
TOUR OPERATOR
Liability for the proper performance of the package travel contract Financial guarantee covering the package travel contract Form(s) of the financial guarantee Amount of the financial guarantee Yes Yes Bank guarantee and participation in a fund 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 year with 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 used monies 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, TOsguarantee is primarily used, the fund only being used if the guarantee is not sufficient. Minimum amount that financial guarantee must cover Legal obligation of separate deposit in addition to financial guarantee Average amount spent on annual basis for the financial guarantee Competent compliance authority for the financial guarantee Special remarks approx. 31,000 No
TRAVEL AGENT
Yes No -
No -
The Fund administrator 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
The Fund administrator


BC12-002/4400
SWITZERLAND
TOUR OPERATOR
Yes Yes Guarantee fund, insurance Basis for calculation: annual turnover of the previous year Guarantee must cover 1% of the annual turnover with a minimum of 50,000 CHF 50,000 CHF No 600 - 1,200 CHF depending on the financial situation The Fund administrator The guarantee can be replaced by a deposit with a specific 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 organiser can claim the money not received from retailer from the Guarantee Fund of the Swiss Travel Industry
TRAVEL AGENT
Yes Yes same as TOs same as TOs same as TOs No same as TOs

Liability and Financial Guarantee

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IMPLEMENTATION OF THE PACKAGE TRAVEL DIRECTIVE IN THE MEMBER STATES