The Act was approved in parliament on May 1997 (Act no. 385/1997), extending an existing scheme regarding the new building of small ships. It is not yet determined when it will come into force.
The Act makes it possible to obtain guarantees of loans to buy or rebuild used ships meeting specific criteria relating to size, value, age and use:
- the ship must be registered in Denmark or in the Faroe Islands. Because all EU/EEA citizens may register ships in Denmark the scheme is considered non-discriminatory by the European Commission.
- to keep true to market conditions, guarantees can only be issued for 80% of the purchase or rebuilding price, and a financial institution must bear a risk of at least 55% of that price. An annual premium of at least 2% is payable under the scheme.