Commission Delegated Regulation (EU) 2023/262 of 7 September 2022 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

• p) Repayment Term : the period beginning at the starting point of credit, as defined in this Annex, and ending on the contractual date of the final repayment of principal.

• q) Starting Point of Credit :

• 1) Parts or components (intermediate goods) including related services: in the case of parts or components, the starting point of credit is not later than the actual date of acceptance of the goods or the weighted mean date of acceptance of the goods (including services, if applicable) by the buyer or, for services, the date of the submission of the invoices to the client or acceptance of services by the client.

• 2) Quasi-capital goods, including related services – machinery or equipment, generally of relatively low unit value, intended to be used in an industrial process or for productive or commercial use: in the case of quasi-capital goods, the starting point of credit is not later than the actual date of acceptance of the goods or the weighted mean date of acceptance of the goods by the buyer or, if the exporter has responsibilities for commissioning, then the latest starting point is at commissioning, or for services, the date of the submission of the invoices to the client or acceptance of the service by the client. In the case of a contract for the supply of services where the supplier has responsibility for commissioning, the latest starting point is commissioning.

• 3) Capital goods and project services – machinery or equipment of high value intended to be used in an industrial process or for productive or commercial use:
• — In the case of a contract for the sale of capital goods consisting of individual items usable in themselves, the latest starting point is the actual date when the buyer takes physical possession of the goods, or the weighted mean date when the buyer takes physical possession of the goods.
• — In the case of a contract for the sale of capital equipment for complete plant or factories where the supplier has no responsibility for commissioning, the latest starting point is the date at which the buyer is to take physical possession of the entire equipment (excluding spare parts) supplied under the contract.
• — If the exporter has responsibility for commissioning, the latest starting point is at commissioning.
• — For services, the latest starting point of credit is the date of the submission of the invoices to the client or acceptance of service by the client. In the case of a contract for the supply of services where the supplier has responsibility for commissioning, the latest starting point is commissioning.

• 4) Complete plants or factories – complete productive units of high value requiring the use of capital goods:
• — In the case of a contract for the sale of capital equipment for complete plant or factories where the supplier has no responsibility for commissioning, the latest starting point of credit is the date when the buyer takes physical possession of the entire equipment (excluding spare parts) supplied under the contract.
• — In case of construction contracts where the contractor has no responsibility for commissioning, the latest starting point is the date when construction has been completed.
• — In the case of any contract where the supplier or contractor has a contractual responsibility for commissioning, the latest starting point is the date when he has completed installation or construction and preliminary tests to ensure it is ready for operation. This applies whether or not it is handed over to the buyer at that time in accordance with the terms of the contract and irrespective of any continuing commitment which the supplier or contractor may have, e.g. for guaranteeing its effective functioning or training local personnel.
• — Where the contract involves the separate execution of individual parts of a project, the date of the latest starting point is the date of the starting point for each separate part, or the mean date of those starting points, or, where the supplier has a contract, not for the whole project but for an essential part of it, the starting point may be that appropriate to the project as a whole.
• — For services, the latest starting point of credit is the date of the submission of the invoices to the client or the acceptance of service by the client. In the case of a contract for the supply of services where the supplier has responsibility for commissioning, the latest starting point is commissioning.

• r) Tied Aid :

aid which is in effect (in law or in fact) tied to the procurement of goods and/or services from the donor country and/or a restricted number of countries; it includes loans, grants or associated financing packages with a concessionality level greater than zero percent.

This definition applies whether the “tying” is by formal agreement or by any form of informal understanding between the recipient and the donor country, or whether a package includes components from the forms set out in Article 32 of the Arrangement that are not freely and fully available to finance procurement from the recipient country, substantially all other developing countries and from the Participants, or if it involves practices that the DAC or the Participants consider equivalent to such tying.

• s) Untied Aid : aid which includes loans or grants whose proceeds are fully and freely available to finance procurement from any country.

- t) Weighted Average Life of the Repayment Period : the time that it takes to retire one-half of the principal of a credit. This is calculated as the sum of time (in years) between the starting point of credit and each principal repayment weighted by the portion of principal repaid at each repayment date.

ANNEX XV

COMMERCIAL INTEREST REFERENCE RATE (CIRR) PROVISIONS

CHAPTER I

General provisions

• (a) Each Participant wishing to establish a CIRR shall initially select one of the following two base rate systems for its national currency:
• (1) three-year government bond yields for a repayment term of up to and including five years; five-year government bond yields for over five and up to and including eight and a half years; and seven-year government bond yields for over eight and a half years; or
• (2) five-year government bond yields for all maturities. Exceptions to the base rate system shall be agreed by the Participants.

• (b) CIRRs shall be set at a fixed margin of 100 basis points above each Participant’s base rate unless Participants have agreed otherwise.

• (c) Other Participants shall use the CIRR set for a particular currency should they decide to finance in that currency.

• (d) A Participant may change its base-rate system after giving six months’ advance notice and with the counsel of the Participants.

- (e) A Participant or a non-Participant may request that a CIRR be established for the currency of a non-Participant. In consultation with the interested non-Participant, a Participant or the Secretariat on behalf of that non-Participant may make a proposal for the construction of the CIRR in that currency using Common Line procedures in accordance with Articles 56 to 61.

The interest rate applying to a transaction shall not be fixed for a period longer than 120 days. A margin of 20 basis points shall be added to the relevant CIRR if the terms and conditions of the official financing support are fixed before the contract date.

• a) Where official financing support is provided for floating rate loans, banks and other financing institutions shall not be allowed to offer the option of the lower of either the CIRR (at time of the original contract) or the short-term market rate throughout the life of the loan.

- b) In the event of a voluntary, early repayment of a loan of or any portion thereof, the borrower shall compensate the government institution providing official financing support for all costs and losses incurred as a result of such early repayment, including the cost to the government institution of replacing the part of the fixed rate cash inflow interrupted by the early repayment.

CHAPTER II

Specific provisions

• a) The applicable CIRRs for official financing support provided in accordance with the provisions of the Sector Understandings on Export Credits for Nuclear Power Plants (Annex II) and for Renewable Energy, Climate Change Mitigation and Adaptation, and Water Projects (Annex IV) are constructed using to the following base rates and margins: Repayment Term (years) New nuclear power stations and Annex IV projects with long construction periods [^E0045] All other contracts [^E0046] Base Rate (Government bonds) Margin(bps) Base Rate (Government bonds) Margin(bps) < 11 Relevant CIRR in accordance with Chapter I, Article 1 of this Annex XV 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 (¹) For new nuclear power plants, Article 1 a) 1) of Annex II refers. For Annex IV, this includes new large hydro-power projects, Appendix II Project Class A, and Appendix III Adaptation Projects. (²) For new nuclear power plants, Articles 1 a) 2) to 4) of Annex II refers. For Annex IV, this includes all projects not covered in footnote 1 above.

- b) 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 a) above, and in Article 1 of this Annex XV for repayment terms less than 11 years.

A Participant providing official financing support for fixed rate loans in accordance with the provisions of the Sector Understandings for Rail Infrastructure (Annex V) or the Terms and Conditions Applicable to Project Finance Transactions (Annex VI): shall apply, as minimum interest rates:

• a) For repayment terms of up to and including 12 years, the relevant CIRR in accordance with Article 1 of this Annex XV.

- b) For repayment terms in excess of 12 years, the relevant CIRRs constructed in accordance with Article 1 of this Annex XV, to which a surcharge of 20 basis points shall be added for all currencies.

CHAPTER III

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

• a) CIRRs for currencies that are determined according to the provisions of Chapter I of this Annex XV 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.

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

When market developments require the notification of an amendment to a CIRR during the course of a month, the amended rate shall be implemented 10 days after notification of this amendment has been received by the Secretariat.

’

[^E0001]: As defined in Article 5 of the OECD Convention.

[^E0002]: Defined by the World Bank on an annual basis according to per capita GNI.

[^E0003]: The status of a country in terms of: (1) whether it is a High Income country (as defined by the World Bank on an annual basis according to per capita GNI); (2) membership in the OECD; and (3) whether it is part of the Euro Area is reviewed on an annual basis. The designation of a country under Article 23 c) as a High Income OECD country or a High Income Euro Area country as well as the removal of such designation will only come into effect after the country’s income classification (High Income or otherwise) has remained unchanged for two consecutive years. A change in a country’s designation as a High Income OECD country or a High Income Euro Area country as well as the removal of such designation related to a change in OECD membership or being part of the Euro Area will come into effect immediately at the time of the annual review of countries’ status.

[^E0004]: The assessment of whether or not a Multilateral or Regional Institution is generally exempt from the monetary control and transfer regulations of the country in which it is located shall be made based on the criteria set out in Annex X. The Participants shall maintain a list of the institutions deemed as meeting the critteria and, therefore, subject to the premium rates for Market Benchmark Transactions.

[^E0005]: To qualify as an asset-backed transaction, there must be a first priority security interest on the asset being financed; and, in the case of a lease structure, assignment and/or a first priority security interest in connection with the lease payments.

[^E0006]: To qualify as a project finance transaction, the transaction must meet the Basic Criteria set forth in Appendix 1 to Annex VI of the Arrangement.

[^E0007]: Notwithstanding this threshold, for transactions in Market Benchmark countries using terms and conditions provided under Annex V (rail) or Annex VI (project finance), the relevant minimum commercial loan participation rules applicable under those Annexes shall apply.

[^E0008]: This portion of the 25 % criterion may be met where the non-cash payment portion of a transaction involving a single bank receiving ECA cover includes an uncovered portion of at least 25 %. Such transactions must meet all of the other criteria of subparagraph 1, including the pari passu provisions of this tiret.

[^E0009]: Where the obligor/guarantor is rated by more than one Accredited CRA, the CRA rating is the best available foreign currency rating on a senior unsecured basis for the obligor (or guarantor). The Secretariat shall compile and maintain a list of such accredited CRAs.

[^E0010]: In the event that a relevant Name-Specific market pricing entity is not rated by an Accredited CRA, then the resulting market pricing shall be considered to be below the corresponding TCMB rate and be subject to prior notification in accordance with Article 46.

[^E0011]: The premium rates charged for transactions with a third party guarantee provided by an obligor in a Category 0 country, High Income OECD country, High Income Euro Area country, or by a multilateral or regional institution deemed as meeting the criteria set out in Annex X are subject to the requirements set out in Article 23 c).

[^E0012]: In the case of a third party guarantee, the applicable country risk classification and buyer risk category must be related to the same entity, i.e. either the obligor or the guarantor.

[^E0013]: For administrative purposes, some countries that are eligible to be classified into one of the eight Country Risk Categories may not be classified if they do not generally receive officially supported export credits. For such non-classified countries, Participants are free to apply the country risk classification which they deem appropriate.

[^E0014]: Rules related to the classification of buyers should be understood to stipulate the most favourable classification that can be applied, e.g. a sovereign buyer may be classified in a less favourable buyer risk classification.

[^E0015]: The MPRs associated with the Better than Sovereign (SOV+) buyer risk category are 10 % lower than the MPRs associated with the Sovereign (CC0) buyer risk category.

[^E0016]: Where the non-sovereign borrower is rated by more than one accredited CRA, notification is only required where the buyer risk rating is more favourable than the most favourable of the CRA ratings.

[^E0017]: The review is ongoing.

[^E0018]: Based on the annual review by the World Bank of its country classification, a per capita Gross National Income (GNI) threshold will be used for the purpose of tied aid eligibility; such threshold is available on the OECD website (https://www.oecd.org/trade/topics/export-credits/arrangement-and-sector-understandings/financing-terms-and-conditions/).

[^E0019]: However, in cases where the buyer of the switchyard is the same as the buyer of the power plant and the contract is concluded in relation to the original switchyard for that power plant, the terms and conditions for the original switchyard shall not be more generous than those for the nuclear power plant.

[^E0020]: Ex ante semi-annual repayment reporting requirement does not apply to small aircraft transactions with a total financed amount of less than USD 5 million (i.e. de minimis transactions).

[^E0021]: An explanation shall be provided where the proposed risk-rating of a buyer/borrower exceeds the risk rating of the host sovereign.

[^E0022]: For transactions with an export contract value of less than USD 5 million, a Participant not wishing to follow the risk classification procedure set out in Articles 6 to 8 of this Appendix shall apply the risk classification “8” for the buyer/borrower which is the subject of the transaction and shall notify the transaction in accordance with Article 24 a) of this Sector Understanding.

[^E0023]: For transactions with an export contract value of less than USD 5 million, a five working-day period shall apply.

[^E0024]: Together with information regarding any involvement (provided with due respect for confidentiality duties).

[^E0025]: Together with information regarding any involvement (provided with due respect for confidentiality duties).

[^E0026]: For the purposes of this questionnaire the “State” is the country that is being proposed for addition to the Cape Town Convention List under Appendix II, Section 2 II of the ASU. Where appropriate, these questions shall also be answered in respect of the laws of the particular “territorial unit” of the State in which the relevant operator of an aircraft [or other relevant body as set out in Article 35 (b) Appendix II] is located and “national law” shall be read as including a reference to the relevant local law.

[^E0027]: For the purposes of this questionnaire, “national law” refers to all national legislation of a State, including but not limited to, the Constitution and its Amendments, any federal, state and district law or regulation.

[^E0028]: For example, that (i) treaties prevail over other law as a matter of constitutional or similar framework law in State X; or (ii) legislation is required in State X, and has been enacted expressly setting out the priority of the Cape Town Treaty and/or superseding such other law; or (iii) the Cape Town Treaty or its implementing legislation is (a) more specific than other law (lex specialis derogat legi generali); and/or (b) later in time than such other law (lex posterior derogat legi priori), and as a result of (a) and/or (b) prevails over such other law.

[^E0029]: For example, is there any reason why the rights and remedies granted to creditors under the Convention, including those granted under the QDs, would not (a) be recognised as being effective; or (b) be sufficient by themselves, to enable such rights and remedies to be validly exercised in the State?

[^E0030]: An example of an administrative action for the purposes of this question might be the failure by the State to put in place any procedures or resources to give effect to a provision of the Convention or a Qualifying Declaration. Another example would be the failure by a State to put in place proper procedures in its aircraft registry for recording IDERAs.

[^E0031]: Please include in your analysis any precedent/decision relating to the recognition of rights of creditors, including ECAs, when relevant.

[^E0032]: Such language shall remain until a comprehensive list of specific benchmarks is agreed by Participants and at the latest until 31 December 2022.

[^E0034]: It is understood that the 2012 Recommendation applies equally to projects that are not eligible for these financial terms and conditions.

[^E0035]: The maximum repayment term for jack-up rigs used in the installation of wind turbines shall be 12 years.

[^E0041]: Cable car transportation systems associated with recreational activities such as skiing are not eligible for support under this Annex.

[^E0043]: Most typically this would be a risk on the central bank or Ministry of Finance. For central government entities other than the finance ministry, due diligence shall be undertaken to affirm that the entity commits the full faith and credit of the sovereign.

[^E0044]: For a Market Benchmark Transaction, the premium rate resulting from the application of buyer risk credit enhancements may not be lower than the applicable Minimum Actuarial Premium.