Commission Delegated Regulation (EU) 2016/155 of 29 September 2015 amending Annex II to Regulation (EU) No 1233/2011 of the European Parliament and of the Council on the application of certain guidelines in the field of officially supported export credits

Taking into account a Participant's international obligations and consistent with the purpose of the Arrangement, a Participant may match, according to the procedures set out in Article 45, financial terms and conditions offered by a Participant or a non-Participant.

CHAPTER IV

PROCEDURES

SECTION 1

Common procedures for export credits and trade-related aid

43. NOTIFICATIONS

The notifications set out by the procedures in the Arrangement shall be made in accordance with, and include the information contained in Annex VII, and shall be copied to the Secretariat.

44. INFORMATION ON OFFICIAL SUPPORT

• (a) As soon as a Participant commits the official support which it has notified in accordance with the procedures in Articles 47 to 50, it shall inform all other Participants accordingly by including the notification reference number on the relevant reporting form.

• (b) In an exchange of information in accordance with Articles 55 to 57, a Participant shall inform the other Participants of the credit terms and conditions that it envisages supporting for a particular transaction and may request similar information from the other Participants.

45. PROCEDURES FOR MATCHING

• (a) Before matching financial terms and conditions assumed to be offered by a Participant or a non-Participant pursuant to Articles 18 and 42, a Participant shall make every reasonable effort, including as appropriate by use of the face-to-face consultations described in Article 57, to verify that these terms and conditions are officially supported and shall comply with the following:

• (1) The Participant shall notify all other Participants of the terms and conditions it intends to support following the same notification procedures required for the matched terms and conditions. In the case of matching a non-Participant, the matching Participant shall follow the same notification procedures that would have been required had the matched terms been offered by a Participant.

• (2) Notwithstanding sub-paragraph (1) above, if the applicable notification procedure would require the matching Participant to withhold its commitment beyond the final bid closing date, then the matching Participant shall give notice of its intention to match as early as possible.

• (3) If the initiating Participant moderates or withdraws its intention to support the notified terms and conditions, it shall immediately inform all other Participants accordingly.

• (b) A Participant intending to offer identical financial terms and conditions to those notified according to Articles 47 and 48 may do so once the waiting period stipulated therein has expired. This Participant shall give notification of its intention as early as possible.

46. SPECIAL CONSULTATIONS

• (a) A Participant that has reasonable grounds to believe that financial terms and conditions offered by another Participant (the initiating Participant) are more generous than those provided for in the Arrangement shall inform the Secretariat; the Secretariat shall immediately make available such information.

• (b) The initiating Participant shall clarify the financial terms and conditions of its offer within two working days following the issue of the information from the Secretariat.

• (c) Following clarification by the initiating Participant, any Participant may request that a special consultation meeting of the Participants be organised by the Secretariat within five working days to discuss the issue.

• (d) Pending the outcome of the special consultation meeting of the Participants, financial terms and conditions benefiting from official support shall not become effective.

SECTION 2

Procedures for export credits

47. PRIOR NOTIFICATION WITH DISCUSSION

• (a) A Participant shall notify all other Participants at least ten calendar days before issuing any commitment in accordance with Annex VII if:

• — the applicable country risk classification and buyer risk category used to calculate the MPR is that of a third party guarantor located outside of the obligor's country (i.e. determined according to the first tiret of Article 24(e));

• — the applicable MPR has been decreased through the application of a country risk mitigation technique listed in Article 30; or

• — it intends to provide support in accordance with Article 10(a)(2) or (d) of Annex IV.

• — it intends to provide support in accordance with Article 5(a) of Annex V.

• (b) If any other Participant requests a discussion during this period, the initiating Participant shall wait an additional ten calendar days.

• (c) A Participant shall inform all other Participants of its final decision following a discussion to facilitate the review of the body of experience in accordance with Article 69. The Participants shall maintain records of their experience with regard to premium rates notified in accordance with paragraph (a) above.

48. PRIOR NOTIFICATION

• (a) A Participant shall, in accordance with Annex VII, notify all other Participants at least ten calendar days before issuing any commitment if it intends to:

• (1) Provide support in accordance with Article 10(d)(3).

• (2) Support a repayment term of more than five years to a Category I country.

• (3) Provide support in accordance with Article 13(a).

• (4) Provide support in accordance with Article 14(d).

• (5) Provide support in accordance with Article 24(c) when the credit value is greater than SDR 10 million [^ntr14-L_2016036EN.01000302-E0014].

• (6) Apply a premium rate in accordance with the second tiret of Article 24(e), whereby the applicable country risk classification and buyer risk category used to calculate the MPR have been determined by the involvement as obligor or guarantor of a classified multilateral or regional institution.

• (7) Apply a premium rate in accordance with Article 27(e) whereby the selected buyer risk category used to calculate the MPR for a transaction:

• — with a non-sovereign obligor/guarantor is lower than CC1 (i.e. CC0 or SOV+);

• — with a non-sovereign obligor/guarantor having a credit of greater than SDR 5 million is better than the Accredited CRA rating.

• (8) Apply a premium rate in accordance with Article 31(a) whereby the use of buyer risk credit enhancements results in the application of a CEF of greater than 0.

• (9) Provide support in accordance with Article 8(a) of Annex II.

• (10) Provide support in accordance with Article 10(a)(1) of Annex IV

• (11) Provide support in accordance with Article 5(b) of Annex V.

• (b) If the initiating Participant moderates or withdraws its intention to provide support for such transaction, it shall immediately inform all other Participants.

SECTION 3

Procedures for trade-related aid

49. PRIOR NOTIFICATION

• (a) A Participant shall give prior notification in accordance with Annex VII if it intends to provide official support for:

• — Trade-related untied aid with a value of SDR 2 million or more, and a concessionality level of less than 80 %;

• — Trade-related untied aid with a value of less than SDR 2 million and a grant element (as defined by the DAC) of less than 50 %;

• — Trade-related tied aid with a value of SDR 2 million or more and a concessionality level of less than 80 %; or

• — Trade-related tied aid with a value of less than SDR 2 million and a concessionality level of less than 50 %, except for the cases set out in Articles 38(a) and (b).

• — Tied aid in accordance with Article 39(d).

• (b) Prior notification shall be made at the latest 30 working days before the bid closing or commitment date, whichever is the earlier.

• (c) If the initiating Participant moderates or withdraws its intention to support the notified terms and conditions, it shall immediately inform all other Participants accordingly.

• (d) The provision of this Article shall apply to tied aid that forms part of an associated financing package, as described in Article 35.

50. PROMPT NOTIFICATION

• (a) A Participant shall promptly notify all other Participants, i.e. within two working days of the commitment, in accordance with Annex VII, if it provides official support for tied aid with a value of either:

• — SDR 2 million or more and a concessionality level of 80 % or more; or

• — less than SDR 2 million and a concessionality level of 50 % or more except for the cases set out in Articles 38(a) and (b).

• (b) A Participant shall also promptly notify all other Participants when an aid protocol, credit line or similar agreement is signed.

• (c) Prior notification need not be given if a Participant intends to match financial terms and conditions that were subject to a prompt notification.

SECTION 4

Consultation procedures for tied aid

51. PURPOSE OF CONSULTATIONS

• (a) A Participant seeking clarification about possible trade motivation for tied aid may request that a full Aid Quality Assessment (detailed in Annex XIII) be supplied.

• (b) Furthermore, a Participant may request consultations with other Participants, in accordance with Article 52. These include face-to-face consultations as outlined in Article 57 in order to discuss:

• — first, whether an aid offer meets the requirements of Articles 36 and 37; and

• — if necessary, whether an aid offer is justified even if the requirements of Articles 36 and 37 are not met.

52. SCOPE AND TIMING OF CONSULTATIONS

• (a) During consultations, a Participant may request, among other items, the following information:

• — the assessment of a detailed feasibility study/project appraisal;

• — whether there is a competing offer with non-concessional or aid financing;

• — the expectation of the project generating or saving foreign currency;

• — whether there is co-operation with multilateral organisations such as the World Bank;

• — the presence of International Competitive Bidding (ICB), in particular if the donor country's supplier is the lowest evaluated bid;

• — the environmental implications;

• — any private sector participation; and

• — the timing of the notifications (e.g. six months prior to bid closing or commitment date) of concessional or aid credits.

• (b) The consultation shall be completed and the findings on both questions in Article 51 notified by the Secretariat to all Participants at least ten working days before the bid closing date or commitment date, whichever comes first. If there is disagreement among the consulting parties, the Secretariat shall invite other Participants to express their views within five working days. It shall report these views to the notifying Participant, which should reconsider going forward if there appears to be no substantial support for an aid offer.

53. OUTCOME OF CONSULTATIONS

• (a) A donor which wishes to proceed with a project despite the lack of substantial support shall provide prior notification of its intentions to other Participants, no later than 60 calendar days after the completion of the Consultation, i.e. acceptance of the Chairman's conclusion. The donor shall also write a letter to the Secretary-General of the OECD outlining the results of the consultations and explaining the overriding non-trade related national interest that forces this action. The Participants expect that such an occurrence will be unusual and infrequent.

• (b) The donor shall immediately notify the Participants that it has sent a letter to the Secretary-General of the OECD, a copy of which shall be included with the notification. Neither the donor nor any other Participant shall make a tied aid commitment until ten working days after this notification to Participants has been issued. For projects for which competing commercial offers were identified during the consultation process, the aforementioned ten-working-day period shall be extended to 15 days.

• (c) The Secretariat shall monitor the progress and results of consultations.

SECTION 5

Information exchange for export credits and trade-related aid

54. CONTACT POINTS

All communications shall be made between the designated contact points in each country by means of instant communication, e.g. OLIS, and shall be treated in confidence.

55. SCOPE OF ENQUIRIES

• (a) A Participant may ask another Participant about the attitude it takes with respect to a third country, an institution in a third country or a particular method of doing business.

• (b) A Participant which has received an application for official support may address an enquiry to another Participant, giving the most favourable credit terms and conditions that the enquiring Participant would be willing to support.

• (c) If an enquiry is made to more than one Participant, it shall contain a list of addressees.

• (d) A copy of all enquiries shall be sent to the Secretariat.

56. SCOPE OF RESPONSES

• (a) The Participant to which an enquiry is addressed shall respond within seven calendar days and provide as much information as possible. The reply shall include the best indication that the Participant can give of the decision it is likely to take. If necessary, the full reply shall follow as soon as possible. Copies shall be sent to the other addressees of the enquiry and to the Secretariat.

• (b) If an answer to an enquiry subsequently becomes invalid for any reason, because for example:

• — an application has been made, changed or withdrawn, or

• — other terms are being considered,

a reply shall be made without delay and copied to all other addressees of the enquiry and to the Secretariat.

57. FACE-TO-FACE CONSULTATIONS

• (a) A Participant shall agree within ten working days to requests for face-to-face consultations.

• (b) A request for face-to-face consultations shall be made available to Participants and non-Participants. The consultations shall take place as soon as possible after the expiry of the ten-working-day period.

• (c) The Chairman of the Participants shall co-ordinate with the Secretariat on any necessary follow-up action, e.g. a Common Line. The Secretariat shall promptly make available the outcome of the consultation.

58. PROCEDURES AND FORMAT OF COMMON LINES

• (a) Common Line proposals are addressed only to the Secretariat. A proposal for a Common Line shall be sent to all Participants and, where tied aid is involved, all DAC contact points by the Secretariat. The identity of the initiator is not revealed on the Common Line Register on the Bulletin Board of the OLIS. However, the Secretariat may orally reveal the identity of the initiator to a Participant or DAC member on demand. The Secretariat shall keep a record of such requests.

• (b) The Common Line proposal shall be dated and shall be in the following format:

• — Reference number, followed by “Common Line”.

• — Name of the importing country and buyer.

• — Name or description of the project as precise as possible to clearly identify the project.

• — Terms and conditions foreseen by the initiating country.

• — Common Line proposal.

• — Nationality and names of known competing bidders.

• — Commercial and financial bid closing date and tender number to the extent it is known.

• — Other relevant information, including reasons for proposing the Common Line, availability of studies of the project and/or special circumstances.

• (c) A Common Line proposal put forward in accordance with Article 36(b)(4) shall be addressed to the Secretariat and copied to other Participants. The Participant making the Common Line proposal shall provide a full explanation of the reasons why it considers that the classification of a country should differ from the procedure set out in Article 36(b).

• (d) The Secretariat shall make publicly available the agreed Common Lines.

59. RESPONSES TO COMMON LINE PROPOSALS

• (a) Responses shall be made within 20 calendar days, although the Participants are encouraged to respond to a Common Line proposal as quickly as possible.

• (b) A response may be a request for additional information, acceptance, and rejection, a proposal for modification of the Common Line or an alternative Common Line proposal.

• (c) A Participant which advises that it has no position because it has not been approached by an exporter, or by the authorities in the recipient country in case of aid for the project, shall be deemed to have accepted the Common Line proposal.

60. ACCEPTANCE OF COMMON LINES

• (a) After a period of 20 calendar days, the Secretariat shall inform all Participants of the status of the Common Line proposal. If not all Participants have accepted the Common Line, but no Participant has rejected it, the proposal shall be left open for a further period of eight calendar days.

• (b) After this further period, a Participant which has not explicitly rejected the Common Line proposal shall be deemed to have accepted the Common Line. Nevertheless, a Participant, including the initiating Participant, may make its acceptance of the Common Line conditional on the explicit acceptance by one or more Participants.

• (c) If a Participant does not accept one or more elements of a Common Line it implicitly accepts all other elements of the Common Line. It is understood that such a partial acceptance may lead other Participants to change their attitude towards a proposed Common Line. All Participants are free to offer or match terms and conditions not covered by a Common Line.

• (d) A Common Line which has not been accepted may be reconsidered using the procedures in Articles 58 and 59. In these circumstances, the Participants are not bound by their original decision.

61. DISAGREEMENT ON COMMON LINES

If the initiating Participant and a Participant which has proposed a modification or alternative cannot agree on a Common Line within the additional eight-calendar day period, this period can be extended by their mutual consent. The Secretariat shall inform all Participants of any such extension.

62. EFFECTIVE DATE OF COMMON LINE

The Secretariat shall inform all Participants either that the Common Line will go into effect or that it has been rejected; the Common Line will take effect three calendar days after this announcement. The Secretariat shall make available on OLIS a permanently updated record of all Common Lines which have been agreed or are undecided.

63. VALIDITY OF COMMON LINES

• (a) A Common Line, once agreed, shall be valid for a period of two years from its effective date, unless the Secretariat is informed that it is no longer of interest, and that this is accepted by all Participants. A Common Line shall remain valid for a further two-year period if a Participant seeks an extension within 14 calendar days of the original date of expiry. Subsequent extensions may be agreed through the same procedure. A Common Line agreed in accordance with Article 36(b)(4) shall be valid until World Bank data for the following year is available.

• (b) The Secretariat shall monitor the status of Common Lines and shall keep the Participants informed accordingly, through the maintenance of the listing “The Status of Valid Common Lines” on OLIS. Accordingly, the Secretariat, inter alia, shall:

• — Add new Common Lines when these have been accepted by the Participants.

• — Update the expiry date when a Participant requests an extension.

• — Delete Common Lines which have expired.

• — Issue, on a quarterly basis, a list of Common Lines due to expire in the following quarter.

SECTION 6

Operational provisions for the communication of minimum interest rates (CIRRs)

64. COMMUNICATION OF MINIMUM INTEREST RATES

• (a) CIRRs for currencies that are determined according to the provisions of Article 20 shall be sent by means of instant communication at least monthly to the Secretariat for circulation to all Participants.

• (b) Such notification shall reach the Secretariat no later than five days after the end of each month covered by this information. The Secretariat shall then inform immediately all Participants of the applicable rates and make them publicly available.

65. EFFECTIVE DATE FOR APPLICATION OF INTEREST RATES

Any changes in the CIRRs shall enter into effect on the fifteenth day after the end of each month.

66. IMMEDIATE CHANGES IN INTEREST RATES

When market developments require the notification of an amendment to a CIRR during the course of a month, the amended rate shall be implemented ten days after notification of this amendment has been received by the Secretariat.

SECTION 7

Reviews

67. REGULAR REVIEW OF THE ARRANGEMENT

• (a) The Participants shall review regularly the functioning of the Arrangement. In the review, the Participants shall examine, inter alia, notification procedures, implementation and operation of the DDR system, rules and procedures on tied aid, questions of matching, prior commitments and possibilities of wider participation in the Arrangement.

• (b) This review shall be based on information of the Participants' experience and on their suggestions for improving the operation and efficacy of the Arrangement. The Participants shall take into account the objectives of the Arrangement and the prevailing economic and monetary situation. The information and suggestions that Participants wish to put forward for this review shall reach the Secretariat no later than 45 calendar days before the date of review.

68. REVIEW OF MINIMUM INTEREST RATES

• (a) The Participants shall periodically review the system for setting CIRRs in order to ensure that the notified rates reflect current market conditions and meet the aims underlying the establishment of the rates in operation. Such reviews shall also cover the margin to be added when these rates are applied.

• (b) A Participant may submit to the Chairman of the Participants a substantiated request for an extraordinary review in case this Participant considers that the CIRR for one or more than one currency no longer reflect current market conditions.

69. REVIEW OF MINIMUM PREMIUM RATES AND RELATED ISSUES

The Participants shall regularly monitor and review all aspects of the premium rules and procedures. This shall include:

• (a) The Country Risk Classification and Sovereign Risk Assessment Methodologies to review their validity in the light of experience;

• (b) The level of the MPRs to ensure that they remain an accurate measure of credit risk, taking into account both the actual experience of institutions providing official export credits as well as private market information on the pricing of credit risk;

• (c) The differentiations in the MPRs which take account of the differing quality of export credit products and percentage of cover provided; and

• (d) The body of experience related to the use of country risk mitigation and buyer risk credit enhancements and the continued validity and appropriateness of their specific impact on the MPRs.

‘ANNEX I

SECTOR UNDERSTANDING ON EXPORT CREDITS FOR SHIPS

CHAPTER I

Scope of the sector understanding

1. PARTICIPATION

The Participants to the Sector Understanding are: Australia, the European Union, Japan, Korea, New Zealand and Norway.

2. SCOPE OF APPLICATION

This Sector Understanding, which complements the Arrangement, sets out specific guidelines for officially supported export credits relating to export contracts of:

• (a) Any new sea-going vessel of 100 gt and above used for the transportation of goods or persons, or for the performance of a specialised service (for example, fishing vessels, fish factory ships, ice breakers and as dredgers, that present in a permanent way by their means of propulsion and direction (steering) all the characteristics of self-navigability in the high sea), tugs of 365 kw and over and to unfinished shells of ships that are afloat and mobile. The Sector Understanding does not cover military vessels. Floating docks and mobile offshore units are not covered by the Sector Understanding, but should problems arise in connection with export credits for such structures, the Participants to the Sector Understanding (hereinafter the “Participants”), after consideration of substantiated requests by any Participant, may decide that they shall be covered.

• (b) Any conversion of a ship. Ship conversion means any conversion of sea-going vessels of more than 1 000 gt on condition that conversion operations entail radical alterations to the cargo plan, the hull or the propulsion system.

• (c) - (1) Although hovercraft-type vessels are not included in the Sector Understanding, Participants are allowed to grant export credits for hovercraft vessels on equivalent conditions to those prevailing in the Sector Understanding. They commit themselves to apply this possibility moderately and not to grant such credit conditions to hovercraft vessels in cases where it is established that no competition is offered under the conditions of the Sector Understanding.

• (2) In the Sector Understanding, the term “hovercraft” is defined as follows: an amphibious vehicle of at least 100 tons designed to be supported wholly by air expelled from the vehicle forming a plenum contained within a flexible skirt around the periphery of the vehicle and the ground or water surface beneath the vehicle, and capable of being propelled and controlled by airscrews or ducted air from fans or similar devices.

• (3) It is understood that the granting of export credits at conditions equivalent to those prevailing in this Sector Understanding should be limited to those hovercraft vessels used on maritime routes and non-land routes, except for reaching terminal facilities standing at a maximum distance of one kilometre from the water.

CHAPTER II

Provisions for export credits and tied aid

3. MAXIMUM REPAYMENT TERM

The maximum repayment term, irrespective of country classification, is 12 years after delivery.

4. CASH PAYMENT

The Participants shall require a minimum cash payment of 20 % of the contract price by delivery.

5. REPAYMENT OF PRINCIPAL AND PAYMENT OF INTEREST

• (a) The principal sum of an export credit shall be repaid in equal instalments at regular intervals of normally six months and a maximum of 12 months.

• (b) 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.

• (c) For export credits provided in support of lease transactions, equal repayments of principal and interest combined may be applied in lieu of equal repayments of principal as set out in paragraph (a).

• (d) Interest due after the starting point of credit shall not be capitalised.

• (e) A Participant to this Sector Understanding intending to support a payment of interest on different terms than those set out in paragraph (b) shall give prior notification at least ten calendar days before issuing any commitment, in accordance with Annex VII of the Arrangement.

6. MINIMUM PREMIUM

The provisions of the Arrangement in relation to minimum premium benchmarks shall not be applied until such provisions have been further reviewed by the Participants to this Sector Understanding.

7. PROJECT FINANCE

The provisions of Article 7 and of Annex VI to the Arrangement shall not be applied until such provisions have been further reviewed by the Participants to this Sector Understanding.

8. AID

Any Participant desiring to provide aid must, in addition to the provisions of the Arrangement, confirm that the ship is not operated under an open registry during the repayment term and that appropriate assurance has been obtained that the ultimate owner resides in the receiving country, is not a non-operational subsidiary of a foreign interest and has undertaken not to sell the ship without his government's approval.

CHAPTER III

Procedures

9. NOTIFICATION

For the purpose of transparency each Participant shall, in addition to the provisions of the Arrangement and the IBRD/Berne Union/OECD Creditor Reporting System, provide annually information on its system for the provision of official support and of the means of implementation of this Sector Understanding, including the schemes in force.

10. REVIEW

• (a) The Sector Understanding shall be reviewed annually or upon request by any Participant within the context of the OECD Working Party on Shipbuilding, and a report made to the Participants to the Arrangement.

• (b) To facilitate coherence and consistency between the Arrangement and this Sector Understanding and taking into account the nature of the shipbuilding industry, the Participants to this Sector Understanding and to the Arrangement will consult and co-ordinate as appropriate.

• (c) Upon a decision by the Participants to the Arrangement to change the Arrangement, the Participants to this Sector Understanding (the Participants) will examine such a decision and consider its relevance to this Sector Understanding. Pending such consideration the amendments to the Arrangement will not apply to this Sector Understanding. In case the Participants can accept the amendments to the Arrangement they shall report this in writing to the Participants to the Arrangement. In case the Participants cannot accept the amendments to the Arrangement as far as their application to shipbuilding is concerned they shall inform the Participants to the Arrangement of their objections and enter into consultations with them with a view to seeking a resolution of the issues. In case no agreement can be reached between the two groups, the views of the Participants as regards the application of the amendments to shipbuilding shall prevail.

‘Attachment

Commitments for future work

In addition to the Future Work of the Arrangement, the Participants to this Sector Understanding agree:

• (a) To develop an illustrative list of types of ships which are generally considered non-commercially viable, taking into account the disciplines on tied aid set out in the Arrangement.

• (b) To review the provisions of the Arrangement in relation to minimum premium benchmarks with a view to incorporating them into this Sector Understanding.

• (c) To discuss, subject to the developments in relevant international negotiations, the inclusion of other disciplines on minimum interest rates including a special CIRR and floating rates.

• (d) To review the applicability to this Sector Understanding of provisions of the Arrangement in relation to Project Finance.

• (e) To discuss whether:

• — the date of the first instalment of principal;

• — the Weighted Average Life concept

may be used in relation to the repayment profile contained in Article 5 of this Sector Understanding.

‘ANNEX II

SECTOR UNDERSTANDING ON EXPORT CREDITS FOR NUCLEAR POWER PLANTS

CHAPTER I

Scope of the sector understanding

1. SCOPE OF APPLICATION

• (a) This Sector Understanding sets out the provisions which apply to officially supported export credits relating to contracts for:

• (1) The export of complete nuclear power stations or parts thereof, comprising all components, equipment, materials and services, including the training of personnel directly required for the construction and commissioning of such nuclear power stations.

• (2) The modernisation of existing nuclear power plants in cases where both the overall value of the modernisation is at or above SDR 80 million and the economic life of the plant is likely to be extended by at least the repayment period to be awarded. If either of these criteria is not met, the terms of the Arrangement apply.

• (3) The supply of nuclear fuel and enrichment.

• (4) The provision of spent fuel management.

• (b) This Sector Understanding does not apply to:

• (1) Items located outside the nuclear power plant site boundary for which the buyer is usually responsible, in particular costs associated with land development, roads, construction village, power lines, switchyard (^{15 18 22 1 29 31 36 2 37}) and water supply, as well as costs arising in the buyer's country from official approval procedures (e.g. site permit, construction permit, fuel loading permit).

• (2) Sub-stations, transformers and transmission lines located outside the nuclear power plant site boundary.

• (3) Official support provided for the decommissioning of a nuclear power plant.

CHAPTER II

Provisions for export credits and trade-related aid

2. MAXIMUM REPAYMENT TERMS

• (a) The maximum repayment term for goods and services included in the provisions of Articles 1(a)(1) and (2) of this Sector Understanding is 18 years.

• (b) The maximum repayment term for the initial fuel load is four years from delivery. The maximum repayment term for subsequent reloads of nuclear fuel is two years from delivery.

• (c) The maximum repayment term for spent fuel disposal is two years.

• (d) The maximum repayment term for enrichment and spent fuel management is five years.

3. REPAYMENT OF PRINCIPAL AND PAYMENT OF INTEREST

• (a) The Participants shall apply a profile of repayment of principal and payment of interest as specified in sub-paragraph (1) or (2) below:

• (1) Repayment of principal shall be made in equal instalments.

• (2) Repayment of principal and payment of interest combined shall be made in equal instalments.

• (b) Principal shall be repaid and interest shall be paid no less frequently than every six months and the first instalment of principal and interest shall be made no later than six months after the starting point of credit.

• (c) On an exceptional and duly justified basis, official support for goods and services mentioned in Articles(1)(a)(1) and (2) of this Understanding may be provided on terms other than those set out in paragraphs (a) and (b) above. The provision of such support shall be explained by an imbalance in the timing of the funds available to the obligor and the debt service profile available under an equal, semi-annual repayment schedule, and shall comply with the following criteria:

• (1) The maximum repayment term shall be 15 years.

• (2) No single repayment of principal or series of principal payments within a six-month period shall exceed 25 % of the principal sum of the credit.

• (3) Principal shall be repaid no less frequently than every 12 months. The first repayment of principal shall be made no later than 12 months after the starting point of credit and no less than 2 % of the principal sum of the credit shall have been repaid 12 months after the starting point of credit.

• (4) Interest shall be paid no less frequently than every 12 months and the first interest payment shall be made no later than six months after the starting point of credit.

• (5) The maximum weighted average life of the repayment period shall not exceed nine years.

• (d) Interest due after the starting point of credit shall not be capitalised.

4. CONSTRUCTION OF CIRRs

The applicable CIRRs for official financing support provided in accordance with the provisions of this Sector Understanding are constructed using to the following base rates and margins:

Repayment Term (years)	New nuclear power stations(16 19 23 30 32)	New nuclear power stations(16 19 23 30 32)	All other contracts(17 20 24 33)	All other contracts(17 20 24 33)
Repayment Term (years)	Base Rate (Government bonds)	Margin (bps)	Base Rate (Government bonds)	Margin (bps)
< 11	Relevant CIRR in accordance with Article 20 of the Arrangement	Relevant CIRR in accordance with Article 20 of the Arrangement	Relevant CIRR in accordance with Article 20 of the Arrangement	Relevant CIRR in accordance with Article 20 of the Arrangement
11 to 12	7 years	100	7 years	100
13	8 years	120	7 years	120
14	9 years	120	8 years	120
15	9 years	120	8 years	120
16	10 years	125	9 years	120
17	10 years	130	9 years	120
18	10 years	130	10 years	120

5. ELIGIBLE CURRENCIES

The currencies that are eligible for official financing support are those which are fully convertible and for which data are available to construct the minimum interest rates mentioned in Article 4 of this Sector Understanding, and Article 20 of the Arrangement for repayment terms less than 11 years.

6. OFFICIAL SUPPORT FOR NUCLEAR FUEL AND FOR NUCLEAR FUEL RELATED SERVICES

Without prejudice to the provisions of Article 7 of this Sector Understanding, the Participants shall not provide free nuclear fuel or services.

7. AID

The Participants shall not provide aid support.

CHAPTER III

Procedures

8. PRIOR NOTIFICATION

• (a) A Participant shall give prior notification in accordance with Article 48 of the Arrangement at least ten calendar days before issuing any commitment if it intends to provide support in accordance with the provisions of this Sector Understanding.

• (b) If the notifying Participant intends to provide support with a repayment term in excess of 15 years and/or in accordance with Article 3(c) of this Sector Understanding, it shall wait an additional ten calendar days if any other Participant requests a discussion during the initial ten calendar days.

• (c) A Participant shall inform all other Participants of its final decision following a discussion, to facilitate the review of the body of experience.

CHAPTER IV

Review

9. FUTURE WORK

The Participants agree to examine the following issues:

• (a) A minimum floating interest rate regime.

• (b) The maximum amount of official support for local costs.

10. REVIEW AND MONITORING

The Participants shall review regularly the provisions of the Sector Understanding and at the latest by the end of 2017.

‘ANNEX III

SECTOR UNDERSTANDING ON EXPORT CREDITS FOR CIVIL AIRCRAFT

PART 1

General provisions

1. PURPOSE

• (a) The purpose of this Sector Understanding is to provide a framework for the predictable, consistent and transparent use of officially supported export credits for the sale or lease of aircraft and other goods and services specified in Article 4(a) below. This Sector Understanding seeks to foster a level playing field for such export credits, 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.

• (b) This Sector Understanding sets out the most favourable terms and conditions on which officially supported export credits may be provided.

• (c) To this aim, this Sector Understanding seeks to establish a balanced equilibrium that, on all markets:

• (1) Equalises competitive financial conditions between the Participants,

• (2) Neutralises official support among the Participants as a factor in the choice among competing goods and services specified in Article 4(a) below, and

• (3) Avoids distortion of competition among the Participants to this Sector Understanding and any other sources of financing.

• (d) The Participants to this Sector Understanding (the Participants) acknowledge that the provisions included in this Sector Understanding have been developed for the sole purpose of this Sector Understanding and such provisions do not prejudice the other parts of the Arrangement on Officially Supported Export Credits (the Arrangement) and their evolution.

2. STATUS

This Sector Understanding is a Gentlemen's Agreement among its Participants and is Annex III to the Arrangement; it forms an integral part of the Arrangement and it succeeds the Sector Understanding which came into effect in July 2007.

3. PARTICIPATION

The Participants currently are: Australia, Brazil, Canada, the European Union, Japan, Korea, New Zealand, Norway, Switzerland and the United States. Any non-Participant may become a Participant in accordance with the procedures set out in Appendix I.

4. SCOPE OF APPLICATION

• (a) This Sector Understanding shall apply to all official support provided by or on behalf of a government, and which has a repayment term of two years or more, for the export of:

• (1) New civil aircraft and engines installed thereon, including buyer furnished equipment.

• (2) Used, converted, and refurbished civil aircraft and engines installed thereon, including, in each case, buyer furnished equipment.

• (3) Spare engines.

• (4) Spare parts for civil aircraft and engines.

• (5) Maintenance and service contracts for civil aircraft and engines.

• (6) Conversion, major modifications and refurbishment of civil aircraft.

• (7) Engine kits.

• (b) Official support may be provided in different forms:

• (1) Export credit guarantee or insurance (pure cover).

• (2) Official financing support:

• — direct credit/financing and refinancing or

• — interest rate support.

• (3) Any combination of the above.

• (c) This Sector Understanding shall not apply to official support for:

• (1) The exports of new or used military aircraft and related goods and services listed in paragraph (a) above, including when used for military purposes.

• (2) New or used flight simulators.

5. INFORMATION AVAILABLE TO NON-PARTICIPANTS

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.

6. AID SUPPORT

The Participants shall not provide aid support, except for humanitarian purposes, through a Common Line procedure.

7. ACTIONS TO AVOID OR MINIMISE LOSSES

This Sector Understanding does not prevent its Participants from agreeing to less restrictive financial terms and conditions than those provided for by this Sector Understanding, if such action is taken after the export credit agreement and ancillary documents have already become effective and is intended solely to avoid or minimise losses from events which could give rise to non-payment or claims. A Participant shall notify all other Participants and the OECD Secretariat (the Secretariat), within 20 working days following the Participant's agreement with the buyer/borrower, of the modified financial terms and conditions. The notification shall contain information, including the motivation, on the new financial terms and conditions, using the reporting form set out in Appendix IV.

PART 2

New aircraft

CHAPTER I

Coverage

8. NEW AIRCRAFT

• (a) For the purpose of this Sector Understanding, a new aircraft is:

• (1) An aircraft, including buyer furnished equipment, and the engines installed on such aircraft owned by the manufacturer and not delivered nor previously used for its intended purpose of carrying passengers and/or freight and

• (2) Spare engines and spare parts when contemplated as part of the original aircraft order in accordance with the provisions of Article 20(a) below.

• (b) Notwithstanding the provisions of paragraph (a) above, a Participant may support terms appropriate to new aircraft for transactions where, with the prior knowledge of that Participant, interim financing arrangements had been put in place because the provision of official support had been delayed; such delay shall not be longer than 18 months. In such cases, the repayment term and the final repayment date shall be the same as if the sale or lease of the aircraft would have been officially supported from the date the aircraft was originally delivered.

CHAPTER II

Financial terms and conditions

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.

9. ELIGIBLE CURRENCIES

The currencies which are eligible for official financing support are euro, Japanese yen, UK pound sterling, US dollar, and other fully convertible currencies for which data are available to construct the minimum interest rates mentioned in Appendix III.

10. DOWN PAYMENT AND MAXIMUM OFFICIAL SUPPORT

• (a) For transactions with buyers/borrowers classified in Risk Category 1 (as per Table 1 of Appendix II), the Participants shall:

• (1) Require a minimum down payment of 20 % of the net price of the aircraft at or before the starting point of credit;

• (2) Not provide official support in excess of 80 % of the net price of the aircraft.

• (b) For transactions with buyers/borrowers classified in Risk Categories 2 to 8 (as per Table 1 of Appendix II), the Participants shall:

• (1) Require a minimum down payment of 15 % of the net price of the aircraft at or before the starting point of credit;

• (2) Not provide official support in excess of 85 % of the net price of the aircraft.

• (c) A Participant which applies Article 8(b) above shall reduce the maximum amount of official support by the amount of principal of the instalments deemed due from the starting point of the credit so as to ensure that, at the time of disbursement, the amount outstanding is the same as if such an officially supported export credit was provided at the time of delivery. In such circumstances, prior to delivery the Participant shall have received an application for official support.

11. MINIMUM PREMIUM RATES

• (a) The Participants providing official support shall charge, for the credit amount officially supported, no less than the minimum premium rate set out in accordance with Appendix II.

• (b) The Participants shall use, whenever necessary, the agreed premium rate conversion model to convert between per annum spreads calculated on the outstanding amount of the official support and single up-front premium rates calculated on the original amount of the official support.

12. MAXIMUM REPAYMENT TERM

• (a) The maximum repayment term shall be 12 years for all new aircraft.

• (b) On an exceptional basis, and with a prior notification, a maximum repayment term of up to 15 years shall be allowed. In this case, a surcharge of 35 % to the minimum premium rates calculated in accordance with Appendix II shall apply.

• (c) There shall be no extension of the repayment term by way of sharing of rights in the security on a pari passu basis with commercial lenders for the officially supported export credit.

13. REPAYMENT OF PRINCIPAL AND PAYMENT OF INTEREST

• (a) The Participants shall apply a profile of repayment of principal and payment of interest as specified in sub-paragraph (1) or (2) below.

• (1) Repayment of principal and payment of interest combined shall be made in equal instalments:

• — Instalments shall be made no less frequently than every three months and the first instalment shall be made no later than three months after the starting point of credit.

• — Alternatively, and subject to a prior notification, instalments shall be made every six months and the first instalment shall be made no later than six months after the starting point of credit. In this case, a surcharge of 15 % to the minimum premium rates calculated in accordance with Appendix II shall apply.

• — In the case of a floating rate transaction, the principal amortising profile shall be set for the entire term, no more than five business days prior to the disbursement date, based on the floating or swap rate at that time.

• (2) Repayment of principal shall be made in equal instalments with interest payable on declining balances:

• — Instalments shall be made no less frequently than every three months and the first instalment shall be made no later than three months after the starting point of credit.

• — Alternatively, and subject to a prior notification, instalments shall be made every six months and the first instalment shall be made no later than six months after the starting point of credit. In this case, a surcharge of 15 % to the minimum premium rates calculated in accordance with Appendix II shall apply.

• (b) Notwithstanding paragraph (a) above, and subject to a prior notification, the repayment of principal may be structured to include a final payment of all outstanding amounts on a specified date. In such case, repayments of principal prior to the final payment will be structured as set out in paragraph (a) above, based on an amortization period not greater than the maximum repayment term allowed for the goods and services being supported.

• (c) Notwithstanding paragraph (a) above, repayment of principal may be structured on terms less favourable to the obligor.

• (d) Interest due after the starting point of credit shall not be capitalised.

14. MINIMUM INTEREST RATES

• (a) The Participants providing official financing support shall apply either a minimum floating interest rate or a minimum fixed interest rate, in accordance with the provisions of Appendix III.

• (b) For jet aircraft of a net price of at least USD 35 million, official financing support on CIRR basis shall only be provided in exceptional circumstances. A Participant intending to provide such support shall notify all other Participants at least 20 calendar days before final commitment, identifying the borrower.

• (c) Interest rate excludes any payment by way of premium referred to in Article 11 above, and fees referred to in Article 16 below.

15. INTEREST RATE SUPPORT

The Participants providing interest rate support shall comply with the financial terms and conditions of this Sector Understanding and shall require any bank or any other financial institution which is a party to the interest supported transaction to participate in that transaction only on terms that are consistent in all respects with the financial terms and conditions of this Sector Understanding.

16. FEES

• (a) Subject to the limits of the premium holding period, the Participants providing official support in the form of pure cover shall charge a premium holding fee on the un-drawn portion of the official support during the premium holding period, as follows:

• (1) For the first six months of the holding period: zero basis points per annum.

• (2) For the second six months of the holding period: 12,5 basis points per annum.

• (3) For the third and final six months of the holding period: 25 basis points per annum.

• (b) The Participants providing official support in the form of direct credit / financing shall charge the following fees:

• (1) Arrangement / Structuring fee: 25 basis points on the disbursed amount payable at the time of each disbursement.

• (2) Commitment and premium holding fee: 20 basis points per annum on the un-drawn portion of the officially supported export credit to be disbursed, during the premium holding period, payable in arrears.

• (3) Administration fee: five basis points per annum on the amount of official support outstanding payable in arrears. Alternatively, the Participants may elect to have this fee payable as an up-front fee, on the amount disbursed, at the time of each disbursement pursuant to the provisions of Article 11(b) above.

17. CO-FINANCING

Notwithstanding Articles 14 and 16 above, in a co-financing where official support is provided by way of direct credit and pure cover, and where pure cover represents at least 35 % of the officially supported amount, the Participant providing direct credit shall apply the same financial terms and conditions, including fees, as those provided by the financial institution under pure cover, to generate an all-in cost equivalence between the pure cover provider and the direct lender. In such circumstances, the Participant providing such support shall report the financial terms and conditions supported, including fees, in accordance with the reporting form set out in Appendix IV.

PART 3

Used aircraft, spare engines, spare parts, maintenance and service contracts

CHAPTER I

Coverage

18. USED AIRCRAFT AND OTHER GOODS AND SERVICES

This Part of the Sector Understanding shall apply to used aircraft and to spare engines, spare parts, conversion, major modification, refurbishing, maintenance and service contracts in conjunction with both new and used aircraft and engine kits.

CHAPTER II

Financial terms and conditions

The financial terms and conditions to be applied, other than the maximum repayment term, shall be in accordance with the provisions set out in Part 2 of this Sector Understanding.

19. SALE OF USED AIRCRAFT

• (a) Subject to paragraph (b) below, the maximum repayment term for used aircraft shall be established in accordance with the age of the aircraft, as set out in the following table:

Age of Aircraft (years since the date of original manufacture)	Maximum Repayment Terms for Asset-Backed or Sovereign Transactions (years)	Maximum Repayment Terms for Transactions neither Asset-Backed nor Sovereign (years)
1	10	8,5
2	9	7,5
3	8	6,5
4	7	6
5-8	6	5,5
Over 8	5	5

• (b) The maximum repayment term for aircraft that have undergone conversion, provided the transaction meets all the requirements of Article 19 of Appendix II and provided further that official support, if any, provided in respect of such conversion was not provided in accordance with Article 21(a) below, shall be established in accordance with the period of time since the date of conversion and the age of the aircraft, as set out in the following table:

Maximum Repayment Terms for Asset-Backed Converted Aircraft (years)

Period of Time Since the Date of Conversion (years)	Age of Aircraft (years since the date of original manufacture)	Age of Aircraft (years since the date of original manufacture)	Age of Aircraft (years since the date of original manufacture)	Age of Aircraft (years since the date of original manufacture)	Age of Aircraft (years since the date of original manufacture)	Age of Aircraft (years since the date of original manufacture)
Period of Time Since the Date of Conversion (years)	1	2	3	4	5-8	Over 8
0 (Newly converted)	10	9	8	8	8	8
1	10	9	8	7	7	7
2	—	9	8	7	6	6
3 or more	—	—	8	7	6	5

20. SPARE ENGINES AND SPARE PARTS

• (a) When purchased, or ordered in connection with the engines to be installed on a new aircraft, the official support for spare engines may be provided on the same terms and conditions as for the aircraft.

• (b) When purchased with new aircraft, the official support for spare parts may be provided on the same terms and conditions as for the aircraft up to a maximum 5 % of the net price of the new aircraft and installed engines; paragraph (d) below shall apply to official support for spare parts in excess of the 5 % limit.

• (c) When spare engines are not purchased with a new aircraft, the maximum repayment term shall be eight years. For spare engines with a unit value of USD 10 million or more, provided the transaction meets all the requirements of Article 19 of Appendix II, the repayment term shall be 10 years.

• (d) When other spare parts are not purchased with a new aircraft, the maximum repayment term shall be:

• (1) Five years with a contract value of USD 5 million or more.

• (2) Two years with a contract value of less than USD 5 million.

21. CONTRACTS FOR CONVERSION/MAJOR MODIFICATION/REFURBISHING

• (a) If a transaction for conversion:

• (1) Is valued at USD 5 million or more, and

• — Meets all the requirements of Article 19 of Appendix II, a Participant may offer official support with a repayment term of up to eight years.

• — Does not meet all the requirements of Article 19 of Appendix II, a Participant may offer official support with a repayment term of up to five years.

• (2) Is valued at less than USD 5 million, a Participant may offer official support with a repayment term of up to two years.

• (b) If a transaction is for a major modification, or refurbishment, a Participant may offer official support with a repayment term of up to:

• (1) Five years if the contract value is USD 5 million or more;

• (2) Two years, if the contract value is less than USD 5 million.

22. MAINTENANCE AND SERVICE CONTRACTS

The Participants may offer official support with a repayment term of up to three years.

23. ENGINE KITS

The Participants may offer official support with a repayment term of up to five years.

PART 4

Transparency procedures

All communications shall be made between the designated contact points in each Participant country by means of instant communication, e.g. the OECD On-Line Information System (OLIS). Unless otherwise agreed, all information exchanged under this Part of the Sector Understanding shall be treated by all Participants as confidential.

SECTION 1

Information requirements

24. INFORMATION ON OFFICIAL SUPPORT

• (a) Within one month after the date of a final commitment, a Participant shall submit the information required in Appendix IV to all other Participants, with a copy to the Secretariat.

• (b) In order to establish the margin benchmark in accordance with Appendix III Article 8(b), information on pure cover margins, as outlined in Appendix III Articles 8(c) and (d), shall be submitted to the Secretariat no later than five days after the end of each month.

SECTION 2

Exchange of information

25. REQUESTS FOR INFORMATION

• (a) A Participant may ask another Participant for information about the use of its officially supported export credits for the sale or lease of aircraft covered by this Sector Understanding.

• (b) A Participant which has received an application for official support may address an enquiry to another Participant, giving the most favourable credit terms and conditions that the enquiring Participant would be willing to support.

• (c) The Participant to which such an enquiry is addressed shall respond within seven calendar days and provide reciprocal information to the fullest extent possible. The reply shall include the best indication that the Participant can give of the decision it is likely to take. If necessary, the full reply shall follow as soon as possible.

• (d) Copies of all enquiries and responses shall be sent to the Secretariat.

26. FACE-TO-FACE CONSULTATIONS

• (a) In a competitive situation, a Participant may request face-to-face consultations with one or more Participants.

• (b) Any Participant shall agree within ten working days to such requests.

• (c) The consultations shall take place as soon as possible after the expiry of the ten working-day period.

• (d) The Chairman of the Participants shall co-ordinate with the Secretariat on any necessary follow-up action. The Secretariat shall promptly make available to all Participants the outcome of the consultation.

27. SPECIAL CONSULTATIONS

• (a) A Participant (the initiating Participant) that has reasonable grounds to believe that financial terms and conditions offered by another Participant (the responding Participant) are more generous than those provided for in this Sector Understanding shall inform the Secretariat; the Secretariat shall immediately make available such information to the responding Participant.

• (b) The responding Participant shall clarify the financial terms and conditions of the official support being considered within five working days following the issue of the information from the Secretariat.

• (c) Following clarification by the responding Participant, the initiating Participant may request that a special consultation with the responding Participant be organised by the Secretariat within five working days to discuss the issue.

• (d) The responding Participant shall wait for the outcome of the consultation which shall be determined on the day of such consultation before proceeding any further with the transaction.

SECTION 3

Common lines

28. PROCEDURES AND FORMAT OF COMMON LINES

• (a) Common Line proposals shall be addressed to the Secretariat only. The identity of the initiator is not revealed on the Common Line register on the OLIS. However, the Secretariat may orally reveal the identity of the initiator to a Participant on demand. The Secretariat shall keep a record of such requests.

• (b) The Common Line proposal shall be dated and shall be in the following format:

• (1) Reference number, followed by Common Line.

• (2) Name of the importing country and buyer/borrower.

• (3) Name or description of the transaction as precise as possible to clearly identify the transaction.

• (4) Common Line proposal for the most generous terms and conditions to be supported.

• (5) Nationality and names of known competing bidders.

• (6) Bid closing date and tender number to the extent it is known.

• (7) Other relevant information, including reasons for proposing the Common Line and as appropriate, special circumstances.

29. RESPONSES TO COMMON LINE PROPOSALS

• (a) Responses shall be made within 20 calendar days, although the Participants are encouraged to respond to a Common Line proposal as quickly as possible.

• (b) A response may be acceptance, rejection, a request for additional information, a proposal for modification of the Common Line or an alternative Common Line proposal.

• (c) A Participant which remains silent or advises that it has no position shall be deemed to have accepted the Common Line proposal.

30. ACCEPTANCE OF COMMON LINES

• (a) After a period of 20 calendar days, the Secretariat shall inform all Participants of the status of the Common Line proposal. If not all Participants have accepted the Common Line, but no Participant has rejected it, the proposal shall be left open for a further period of eight calendar days.

• (b) After this further period, a Participant which has not explicitly rejected the Common Line proposal shall be deemed to have accepted the Common Line. Nevertheless, a Participant, including the initiating Participant, may make its acceptance of the Common Line conditional on the explicit acceptance by one or more Participants.

• (c) If a Participant does not accept one or more elements of a Common Line it implicitly accepts all other elements of the Common Line.

31. DISAGREEMENT ON COMMON LINES

• (a) If the initiating Participant and a Participant which has proposed a modification or alternative cannot agree on a Common Line within the additional eight calendar-day period mentioned in Article 30 above, this period can be extended by their mutual consent. The Secretariat shall inform all Participants of any such extension.

• (b) A Common Line which has not been accepted may be reconsidered using the procedures in Articles 28 to 30 above. In these circumstances, the Participants are not bound by their original decision.

32. EFFECTIVE DATE OF COMMON LINE

The Secretariat shall inform all Participants either that the Common Line will go into effect or that it has been rejected; the agreed Common Line will take effect three calendar days after this announcement.

33. VALIDITY OF COMMON LINES

• (a) Unless agreed otherwise, a Common Line, once agreed, shall be valid for a period of two years from its effective date, unless the Secretariat is informed that it is no longer of interest, and that such situation is accepted by all Participants.

• (b) If a Participant seeks an extension within 14 calendar days of the original date of expiry and in the absence of disagreement, a Common Line shall remain valid for a further two-year period; subsequent extensions may be agreed through the same procedure.

• (c) The Secretariat shall monitor the status of Common Lines and shall keep the Participants informed accordingly, through the maintenance of the listing “The Status of Valid Common Lines” on OLIS. Accordingly, the Secretariat, inter alia, shall issue, on a quarterly basis, a list of Common Lines due to expire in the following quarter.

• (d) Upon the request of a non-Participant which produces competing aircraft, the Secretariat shall make available valid Common Lines to that non-Participant.

SECTION 4

Matching

34. MATCHING

• (a) Taking into account a Participant's international obligations, a Participant may match financial terms and conditions of official support offered by a non-Participant.

• (b) In the event of matching non-conforming terms and conditions offered by a non-Participant:

• (1) The matching Participant shall make every effort to verify such terms and conditions.

• (2) The matching Participant shall inform the Secretariat and all other Participants of the nature and outcome of such efforts, as well as of the terms and conditions it intends to support, at least ten calendar days before issuing any commitment.

• (3) If a competing Participant requests a discussion during this ten calendar-day period, the matching Participant shall wait an additional ten calendar days before issuing any commitment on such terms.

• (c) If a matching Participant modifies or withdraws its intention to support the notified terms and conditions, it shall immediately inform all other Participants accordingly.

PART 5

Monitoring and review

35. MONITORING

• (a) The Secretariat shall monitor the implementation of this Sector Understanding and report to the Participants on an annual basis.

• (b) Each transaction deemed eligible under Article 39(a) shall be reported in accordance with the provisions of Article 24(a) and Appendix IV.

• (c) Each transaction deemed eligible under Article 39(b) shall be reported in accordance with the provisions of Article 24(a) and Appendix IV, in addition to which:

• (1) The reporting Participant shall indicate the link between that transaction and the transition list.

• (2) The transition lists shall be monitored on a semi-annual basis; to that end, the Secretariat shall meet with each Participant, with a view to:

• — Monitoring the number of firm orders registered on the transition lists which have been delivered.

• — Updating for the following year the delivery schedule for transactions registered on the transition lists.

• — Identifying orders registered on transition lists which have not been or shall not, for any reason, be delivered to the buyer listed on such transition lists. Any such order shall be deleted from the transition list and shall not be reallocated in any way to any other buyer.

36. REVIEW

The Participants shall review the procedures and provisions of this Sector Understanding, against the criteria, and at the times, set out in paragraphs (a) and (b) below.

• (a) The Participants shall undertake the review of this Sector Understanding as follows:

• (1) In the fourth calendar year following the effective date of this Sector Understanding and, regularly thereafter, in each case with three months prior notice given by the Secretariat.

• (2) At the request of a Participant after due consultation, provided that three months prior notice has been given by the Secretariat and the requesting Participant provides a written explanation of the reason for, and objectives of, the review as well as a summary of the consultations preceding its request.

• (3) Modalities of update of minimum premium rates and minimum interest rates are set out in Appendixes II and III respectively.

• (4) Fees set out in Article 16 shall be part of reviews.

• (b) The review set out in sub-paragraph (a)(1) above shall consider:

• (1) The extent to which the purposes of this Sector Understanding, as set out in Article 1 above, have been achieved and any other issue a Participant may wish to bring forward for discussion.

• (2) In view of the elements in sub-paragraph (b)(1) above, whether amendments to any aspect of this Sector Understanding are justified.

• (c) In recognition of the importance of the review process, to ensure that the terms and conditions of this Sector Understanding continue to meet the needs of the Participants, each Participant reserves the right to withdraw from this Sector Understanding in accordance with Article 40 below.

37. FUTURE WORK

Consideration will be given to:

• (a) Examining Participants' practices in providing official support before the starting point of credit.

• (b) The provisions applicable to indirect loans.

• (c) An extension of maximum repayments terms under Article 19 for used aircraft that have undergone significant refurbishment prior to sale.

• (d) An extension of maximum repayment terms under Article 21 for larger contract values.

• (e) The provisions applicable to “refurbishing” (Article 2(1) and “services” (Article 22).

• (f) The Cape Town eligibility process.

• (g) The definition of “Interested Participant”.

PART 6

Final provisions

38. ENTRY INTO FORCE

The effective date of this Sector Understanding is 1 February 2011.

39. TRANSITIONAL ARRANGEMENTS

Notwithstanding Article 38 above, the Participants may provide official support on the terms and conditions set out as follows:

• (a) The Participants may provide official support on the terms and conditions set out in the Aircraft Sector Understanding in force as of 1 July 2007 (“the 2007 ASU”) if the following conditions are fulfilled:

• (1) The goods and services shall be subject to a firm contract concluded not later than 31 December 2010.

• (2) The goods and services shall be physically delivered not later than 31 December 2012 for 2007 ASU Category 1 aircraft and 31 December 2013 for 2007 ASU Category 2 and 3 aircraft.

• (3) For each final commitment notified, a 20 basis points per annum commitment fee shall be charged from the earlier of the date of the final commitment or 31 January 2011 (2007 ASU Category 1 aircraft)/30 June 2011 (2007 ASU Category 2 and 3 aircraft), until the aircraft is delivered. This commitment fee shall be in lieu of the fees set out in Articles 17(a) and (b)(2) of the 2007 ASU. This commitment fee shall be charged in addition to the minimum premium charged.

• (b) The Participants may provide official support on terms and conditions applicable prior to the effective date of this Sector Understanding if the following conditions are fulfilled:

• (1) The goods and services shall be subject to a firm contract concluded not later than 31 December 2010.