24/09/2011 - It is often complicated for a production company to afford on its own the production of a film in terms of financing and workload. The articles explains how to find solutions as financial co-production, access to national public incentives or bi-national agreement to actively foster the cooperation of countries in the field of cinema production.

Bilateral treaties by country

1.- Introduction

Cinema financing can be a difficult business; especially for small companies (which is the most common case within the European film production industry), releasing one film every one or two years, or even less. It is often complicated for a production company to afford on its own the production of a film in terms of financing and workload. A co-production generates a pool of creative and technical expertise, at the time it allows sharing risks and could bring more financial resources to the project. But what if even in the best national scenario it is impossible to get the film financed inside the country? Or what if due to the character of the screenplay, the expertise of a foreign producer is required? Then, it is time to look for synergies, to find solutions abroad; either through a financial co-production or a so called “natural co-production” respectively.

2.- Co-production and nationality

The concept of co-production is directly linked to the idea of nationality of the film. A producer needs to obtain a certificate of nationality for his film, issued by the correspondent administrative body in his country, in order to have access to most of the national public incentives, as well as to qualify for the screen and television quota for national films existing in many European countries.

The different national cinema laws traditionally distinguish among three kinds of countries: those which an agreement on co-production has been signed with, those taking part at the European Convention of Cinematographic Co-production, and the others, with no applying agreement. For the last ones, the rules governing the certification of nationality in each country are quite protective with their respective cinema industries regarding the talent and the technical crew, the percentage of investment abroad and the national cultural content and contribution to the film (language, representation of the national culture and heritage, setting of the film…).
These elements are used by the film institutions to plan their strategies by binding the percentage of national investment and talent, defining the borders of a majority and minority co-production, as well as drafting the rules on co-financing or considering non-national Europeans as foreigners or not.
Such rules were usually set up to close the access to national subsidies (created to protect the local culture) to de facto foreign productions shot in the country, as well as to local producers shooting abroad so as to put borders to the flight of capitals. At the same time it is intended to give some leeway to allow national producers not to get isolated in their own countries.

Even if there are differences among the regulations on this issue across Europe the philosophy of all of them is similar, as can be observed, for instance, in the German Cinema Support Act -art. 16- , the British Cultural Test or the Spanish Royal Decree 526/2002 on Cinema Support and Co-production, -art. 3 and Chapter VII .

3.- European bi-national agreements

The bi-national agreement is a further step in the relation between two countries. It happens when two national film institutions decide to actively foster the cooperation of their countries in the field of cinema production. In other words, it means relaxing the existing rules on nationality of the film so that the producers can more easily get the certificates of nationality in both countries when a coproduction takes place within the framework of the ad hoc agreement, guaranteeing access to the respective national subsidies in proportion to the participation of each national co-producer to the project.

The signature of an agreement of this nature responds neither to an interest in a country as a potential strategic partner –emerging cinema countries- nor to a market reality of prolific collaboration with a country due to historical, geographic or linguistic reasons.

The United Kingdom holds 7 treaties with France and six members of the Commonwealth (Australia, Canada, India, Jamaica, New Zealand and South Africa). France is the country with most cinema agreements in the world: 45 all around the globe. Spain has signed 17 agreements, 7 of them with Latin-American countries and additionally a multinational Spanish-Latin-American treaty. Germany has 18 co-production agreements, being the German-French Mini-Traité the jewel of the crown and including a fund for the production of films between both countries.

4.- The European Convention of Cinematographic Co-production

The European Convention is open to the member States of the Council of Europe and other States party to the European Cultural Convention. It was first signed by some of the countries, such as Sweden, Denmark or Switzerland, in Strasbourg in 1992, coming into force two years later. By the beginning of 2010 forty two countries will have ratified the Convention, after the signature of Norway and Albania during this year. Even if an agreement is a more desirable option, the Convention is a widely accepted lowest common denominator, which makes easier that all range of co-productions in Europe get ahead. It is an especially efficient tool in co-productions involving three producers from three different countries and can apply also for bi-national co-production in absence of agreement between the countries.

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5.- Common elements of a bi-national treaty

a) a definition of “national” and “resident” in each country,
b) the sharing of rights and revenues among the parties,
c) the rights of entry and abode for the members of the crew during the production, as well as the applicable employment legislation,
d) the regulation on taxes and borders,
e) the entitlement to fully profit from the benefits for national films in both countries,
f) the treatment of potential non-national co-producers and co-financers under determined circumstances,
g) the setting-up of a mixed commission to guarantee the balance between both countries during a given period of time (commonly two years),
h) the minimum contribution of each party, varying from agreement to agreement from 10% to 30%. It also fixes the minimum participation of other potential? parties (usually 10%),
i) the set of the shooting and the place where the post-production has to be carried out,
j) in bi-national treaties between parties of the European Convention, the Convention usually applies on what the treaty does not regulate.