LegalizeRegulation (EU) No 1233/2011 of the European Parliament and of the Council of 16 November 2011 on the application of certain guidelines in the field of officially supported export credits and repealing Council Decisions 2001/76/EC and 2001/77/EC
Article 1
Application of the Arrangement
The guidelines contained in the Arrangement on Officially Supported Export Credits (‘the Arrangement’) shall apply in the Union. The text of the Arrangement is annexed to this Regulation.
Article 2
Delegation of power
The Commission shall adopt delegated acts in accordance with Article 3 to amend Annex II as a result of amendments to the guidelines agreed upon by the Participants to the Arrangement.
Where, in the case of amendments to Annex II as a result of amendments to the guidelines agreed upon by the Participants to the Arrangement, imperative grounds of urgency so require, the procedure provided for in Article 4 shall apply to delegated acts adopted pursuant to this Article.
Article 3
Exercise of the delegation
Article 4
Urgency procedure
Article 5
Transparency and reporting
The transparency and reporting measures to be applied in the Union are set out in Annex I.
Article 6
Repeal
Decisions 2001/76/EC and 2001/77/EC are hereby repealed.
Article 7
Entry into force
This Regulation shall enter into force on the day following its publication in the Official Journal of the European Union.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
ANNEX I
1.Without prejudice to the prerogatives of the Member States' institutions exercising the supervision of the national export credit programs, each Member State shall make available to the Commission an Annual Activity Report in order to step up transparency at Union level. Member States shall report, in accordance with their national legislative framework, on assets and liabilities, claims paid and recoveries, new commitments, exposures and premium charges. Where contingent liabilities might arise from officially supported export credit activities, those activities shall be reported as part of the Annual Activity Report.
2.In the Annual Activity Report, Member States shall describe how environmental risks, which can carry other relevant risks, are taken into account in the officially supported export credit activities of their ECAs.
3.The Commission shall produce an annual review for the European Parliament based on this information, including an evaluation regarding the compliance of ECAs with Union objectives and obligations.
4.The Commission, according to its competencies shall provide to the European Parliament an annual report on negotiations undertaken, where the Commission has negotiating authorisation in the various forums of international cooperation, to establish global standards in the field of officially supported export credits.
The first reporting period, under the scope of this Regulation, covers the year 2011.
ANNEX II
CHAPTER I
GENERAL PROVISIONS
1. PURPOSE
The main purpose of the Arrangement on Officially Supported Export Credits, referred to throughout this document as the Arrangement, is to provide a framework for the orderly use of officially supported export credits.
The Arrangement seeks to foster a level playing field for official support, as defined in Article 5 a), in order to encourage competition among exporters based on quality and price of goods and services exported rather than on the most favourable officially supported financial terms and conditions.
2. STATUS
The Arrangement, developed within the OECD framework, initially came into effect in April 1978 and is of indefinite duration. The Arrangement is a Gentlemen’s Agreement among the Participants; it is not an OECD Act (1), although it receives the administrative support of the OECD Secretariat (hereafter: ‘the Secretariat’).
3. PARTICIPATION
The Participants to the Arrangement currently are: Australia, Canada, the European Union, Japan, Korea, New Zealand, Norway, Switzerland, Türkiye, the United Kingdom and the United States. Other OECD Members and non-members may be invited to become Participants by the current Participants.
4. INFORMATION AVAILABLE TO NON-PARTICIPANTS
The Participants undertake to share information with non-Participants on notifications related to official support as set out in Article 5 a).
A Participant shall, on the basis of reciprocity, reply to a request from a non-Participant in a competitive situation on the financial terms and conditions offered for its official support, as it would reply to a request from a Participant.
5. SCOPE OF APPLICATION
The Arrangement shall apply to all official support provided by or on behalf of a government for export of goods and/or services, including financial leases, which have a repayment term of two years or more.
Official support may be provided in different forms:
Export credit guarantee or insurance (pure cover).
Official financing support:
— direct credit/financing and refinancing, or — interest rate support.
Any combination of the above.
The Arrangement shall apply to tied aid; the procedures set out in Chapter IV shall also apply to trade-related untied aid.
The Arrangement does not apply to exports of military equipment and agricultural commodities.
Official support shall not be provided if there is clear evidence that the contract has been structured with a purchaser in a country which is not the final destination of the goods, primarily with the aim of obtaining more favourable repayment terms.
6. PROHIBITIONS ON ARRANGEMENT SUPPORT
Participants shall not provide officially supported export credits or tied aid for:
The export of new coal-fired electricity generation plants or parts thereof, comprising all components, equipment, materials and services (including the training of personnel) directly required for the construction and commissioning of such power stations. The addition of a new coal-fired electricity generation unit to an existing plant is deemed to be a new coal-fired electricity generation plant.
The export supply of equipment to existing coal-fired electricity generation plants, unless all the following conditions are met:
i. The purpose of the equipment supplied is air pollution abatement, water pollution abatement, or CO2 emissions abatement. ii. The equipment supplied induces neither an extension of the useful lifetime of the plant nor a capacity increase.
The prohibitions set out in paragraphs a) and b) above do not apply to coal-fired electricity generation plants that operate with effective carbon capture utilisation and storage (CCUS) facilities or the retrofitting of existing coal-fired electricity generation plants to install CCUS, as provided for under Project Class B, Type 1 of Appendix I to Annex I.
Participants agree to undertake a review, upon request by a Participant, of non-CCUS CO2 emission abatement technologies which may be developed in the future, for purposes of exceptions from paragraphs a) and b) above. The inclusion of any future exception shall be based on a consensus decision by the Participants.
The provisions set out in paragraphs a) through d) above shall be reviewed no later than 31 December 2022, in order to contribute to the common goal of addressing climate change, taking into account:
i. The most recent reports on climate science and the implications for global infrastructure investment decisions of holding the increase in the global average temperature to well below 2 degrees Celsius above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 degrees Celsius above pre-industrial levels; ii. Officially supported export credits or tied aid support to other coal related projects; iii. Availability of CCUS technology; and iv. Availability of non-CCUS CO2 abatement technologies.
7. SECTOR UNDERSTANDINGS
The following Sector Understandings are part of the Arrangement:
— Climate Change (Annex I) — Nuclear Power Plants (Annex II) — Civil Aircraft (Annex III) — Ships (Annex IV)
A Participant to either Annex I, II, or IV may apply the respective provisions for official support for export of goods and/or services covered by the relevant Sector Understandings. For Annex I or II, where the Sector Understanding does not include a corresponding provision to that of the Arrangement, a Participant to that Sector Understanding shall apply the provision of the Arrangement.
For the export of goods and/or services covered by Annex III, the Participants that are also Participants to that Sector Understanding shall apply the provisions of that Sector Understanding.
8. WITHDRAWAL
A Participant may withdraw by notifying the Secretariat in writing by means of instant communication, e.g. using the electronic mail system that is maintained by the Secretariat to facilitate communications amongst Participants and the Secretariat. The withdrawal takes effect 180 calendar days after receipt of the notification by the Secretariat.
9. MONITORING
The Secretariat shall monitor the implementation of the Arrangement.
CHAPTER II
FINANCIAL TERMS AND CONDITIONS FOR EXPORT CREDITS
Financial terms and conditions for export credits encompass all the provisions set out in this Chapter which shall be read in conjunction one with the other. The Arrangement sets out limitations on terms and conditions that may be officially supported. The Participants recognise that more restrictive financial terms and conditions than those provided for by the Arrangement traditionally apply to certain trade or industrial sectors. The Participants shall continue to respect such customary financial terms and conditions, in particular the principle by which repayment terms do not exceed the useful life of the goods and services.
10. CLASSIFICATION OF COUNTRIES FOR LOCAL COSTS SUPPORT
Category I countries are High Income (2) OECD Countries. All other countries are in Category II.
The following operational criteria and procedures apply when classifying countries:
Classification for Arrangement purposes is determined by per capita GNI as calculated by the World Bank for the purposes of the World Bank classification of borrowing countries.
In cases where the World Bank does not have enough information to publish per capita GNI data, the World Bank shall be asked to estimate whether the country in question has per capita GNI above or below the current threshold. The country shall be classified according to the estimate unless the Participants decide to act otherwise.
If a country is reclassified in accordance with Article 10 a), the reclassification will take effect two weeks after the conclusions drawn from the above-mentioned data from the World Bank have been communicated to all Participants by the Secretariat.
In cases where the World Bank revises figures, such revisions shall be disregarded in relation to the Arrangement. Nevertheless, the classification of a country may be changed by way of a Common Line and Participants would favourably consider a change due to errors and omissions in the figures subsequently recognised in the same calendar year in which the figures were first distributed by the Secretariat.
A country will change category only after its World Bank category has remained unchanged for two consecutive years.
11. DOWN PAYMENT, MAXIMUM OFFICIAL SUPPORT AND LOCAL COSTS
The Participants shall require purchasers of goods and services, which are the subject of official support, to make down payments of a minimum of 15 % of the export contract value at or before the starting point of credit as defined in Annex XIII. For the assessment of down payments, the export contract value may be reduced proportionally if the transaction includes goods and services from a third country which are not officially supported. Financing/insurance of 100 % of the premium is permissible. Premium may or may not be included in the export contract value. Retention payments made after the starting point of credit are not regarded as down payment in this context.
Official support for such down payments shall only take the form of insurance or guarantee against the usual pre-credit risks.
Except as provided for in paragraphs b) and d), the Participants shall not provide official support in excess of 85 % of the export contract value, including third country supply but excluding local costs.
The Participants may provide official support for local costs, under the following conditions:
The maximum amount of official support for local costs shall not exceed:
— For Category I countries, 40 % of the export contract value. — For Category II countries, 50 % of the export contract value.
Official support for local costs shall not be provided on terms more favourable/less restrictive than those agreed for the related exports.
Where official support for local costs exceeds 15 % of the export contract value, such official support shall be subject to prior notification, pursuant to Article 44, specifying the nature of the local costs being supported.
12. MAXIMUM REPAYMENT TERMS
The repayment term shall not exceed the useful life of the goods and services exported or, as appropriate, the useful life of the project to which goods and services are being exported.
Notwithstanding Article 12 a), the maximum repayment term is 15 years.
Notwithstanding Article 12 b), the maximum repayment term for any power plant (3) that is not eligible to be supported under Annex I or II is 12 years.
The Participant shall give prior notification in accordance with Article 44 when official support will be provided for any transaction with a repayment term of greater than 10 years and that has a credit value of SDR 10 million or more.
13. REPAYMENT OF PRINCIPAL AND PAYMENT OF INTEREST
The principal sum of an export credit shall normally be repaid in equal and regular instalments or, when appropriate (e.g. when support is provided for lease transactions or for the export of stand-alone machinery or equipment), equal repayments of principal and interest combined.
Principal shall be repaid no less frequently than annually and the first instalment of principal shall be made no later than one year after the starting point of credit.
Interest shall be paid no less frequently than every six months and the first payment of interest shall be made no later than six months after the starting point of credit. In the case of annual repayments of principal, interest shall be paid no less frequently than every 12 months and the first payment of interest shall be made no later than 12 months after the starting point of credit.
Interest due after the starting point of credit shall not be capitalised.
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