This document is an excerpt from the EUR-Lex website
Document 52025PC0044
Proposal for a COUNCIL DECISION establishing the position to be adopted on the Union’s behalf with regard to the decision of the Participants to the Sector Understanding on Export Credits for Civil Aircraft
Proposal for a COUNCIL DECISION establishing the position to be adopted on the Union’s behalf with regard to the decision of the Participants to the Sector Understanding on Export Credits for Civil Aircraft
Proposal for a COUNCIL DECISION establishing the position to be adopted on the Union’s behalf with regard to the decision of the Participants to the Sector Understanding on Export Credits for Civil Aircraft
COM/2025/44 final
EUROPEAN COMMISSION
Brussels, 17.2.2025
COM(2025) 44 final
2025/0025(NLE)
Proposal for a
COUNCIL DECISION
establishing the position to be adopted on the Union’s behalf with regard to the decision of the Participants to the Sector Understanding on Export Credits for Civil Aircraft
EXPLANATORY MEMORANDUM
1.Subject matter of the proposal
This proposal concerns a decision establishing the position to be taken on the Union's behalf at the meetings of Participants to the Sector Understanding on Export Credits for Civil Aircrafts, Annex III of the OECD Arrangement on Officially Supported Export Credits (“Arrangement”) regarding amendments of the Sector Understanding on Export Credits for Civil Aircrafts (“Aircraft Sector Understanding” or “ASU”).
2.Context of the proposal
2.1.The Arrangement on Officially Supported Export Credits and the Aircraft Sector Understanding
The Arrangement is a gentlemen's agreement between the Union, the US, Canada, Japan, Korea, Norway, Switzerland, Australia, New Zealand, Türkiye and the United Kingdom (the ‘Participants’), which provides a framework for the orderly use of officially supported export credits. In practice, this means establishing a level playing field between Participants (whereby competition is based on the price and quality of the exported goods and services and not on the financial terms provided), while working to eliminate subsidies and trade distortions related to officially supported export credits. The Arrangement entered into force in April 1978, is of indefinite duration, and although the OECD Secretariat provides support for its implementation, is not an OECD Act 1 .
Some of the rules laid out in the Arrangement are sector-specific and detailed in the sectoral annexes of the Arrangement (called “Sector Understandings”). The ASU is a self-contained agreement for officially supported export credits relating to civil aircraft. It operates independently from the Arrangement.
The ASU is managed by its own Participants, which are Australia, Brazil, Canada, the European Union, Japan, Korea, New Zealand, Norway, Switzerland, United Kingdom and the United States.
The ASU is subject to regular updates, taking into account financial market and policy developments affecting the provision of officially supported export credits. The ASU has been transposed, and hence been made legally binding in the Union by virtue of Regulation (EU) No. 1233/2011 of the European Parliament and of the Council of 16 November 2011 2 . Revisions of the terms and conditions of the Arrangement are incorporated into EU law through Delegated Acts pursuant to Article 2 of that Regulation.
2.2.The Participants to the Aircraft Sector Understanding and decision-making
The European Commission represents the Union in meetings of the ASU Participants, as well as in the written procedures for decision-making by the ASU Participants. Decisions on all amendments of the Arrangement are taken by consensus.
2.3.The envisaged act of the ASU Participants
Although the ASU is focused on export credits related to the exports of civil aircraft, Participants also provide support under the ASU for transactions involving the provision of maintenance and other services, as well as the export of spare parts and engine kits. However, practice in the ASU over the years has shown ambiguities regarding the application of the rules to transactions of this type. Therefore, it has been proposed that specific terms and conditions for maintenance and service contracts as well as spare parts and engine kits (related to aircraft covered by the ASU) are included in the ASU. The rules would ensure a coherent application and interpretation of the ASU terms for these transaction, contributing to a more level playing field.
Specifically, the rules would:
·allow for longer repayment terms for transactions above a certain contract value;
·reduce the minimum down payment from 30% to 15% of the export contract value; and
·and adapt the definition of starting point of credit (which is today focused on the moment the buyer receives the main aircraft as opposed to the services dimension) to comply with the delivery milestones typically observed in those contracts.
Discussions have been taking place among the ASU Participants on the addition of these rules since 2022, and an outcome is expected in the first quarter of 2025.
3.Position to be taken on the Union's behalf
The proposed Union position would be to support a change in the text of the ASU regarding the support of maintenance and service contracts, spare parts and engine kits related to aircrafts covered by the ASU. The new specific rules would help ensure a coherent application of the ASU regarding those transactions and strengthen the level playing field between ASU Participants.
4.Legal basis
4.1.Procedural legal basis
4.1.1.Principles
Article 218(9) of the Treaty on the Functioning of the European Union (TFEU) provides for decisions establishing ‘the positions to be adopted on the Union’s behalf in a body set up by an agreement, when that body is called upon to adopt acts having legal effects, with the exception of acts supplementing or amending the institutional framework of the agreement.’
The concept of ‘acts having legal effects’ includes acts that have legal effects by virtue of the rules of international law governing the body in question. It also includes instruments that do not have a binding effect under international law, but that are ‘capable of decisively influencing the content of the legislation adopted by the EU legislature’ 3 .
4.1.2.Application to the present case
The envisaged act is capable of decisively influencing the content of EU legislation, namely Regulation (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. Indeed, Article 1 of this Regulation states that “[t]he 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.”. Equally relevant is Article 2 of this Regulation, which states that ‘[t]he Commission shall adopt delegated acts in accordance with Article 3 to amend Annex II as a result of amendments to the guidelines agreed by the Participants to the Arrangement’. This includes amendments of annexes to the Arrangement, such as the ASU.
Therefore, the procedural legal basis for the proposed decision is Article 218(9) TFEU.
4.2.Substantive legal basis
4.2.1.Principles
The substantive legal basis for a decision under Article 218(9) TFEU depends primarily on the objective and content of the envisaged act in respect of which a position is taken on the Union's behalf.
4.2.2.Application to the present case
The main objective and content of the envisaged act relate to export credits, which is within the scope of the common commercial policy. Therefore, the substantive legal basis of the proposed decision is Article 207 TFEU.
4.3.Conclusion
The legal basis of the proposed decision should be Article 207(4), first subparagraph, TEFU in conjunction with Article 218(9) TFEU.
5.Publication of the envisaged act
As the act of the ASU Participants will amend the Arrangement on Officially Supported Export Credits which forms Annex II to the Regulation (EU) No 1233/2011, it is appropriate to publish it in the Official Journal of the European Union after its acceptance.
2025/0025 (NLE)
Proposal for a
COUNCIL DECISION
establishing the position to be adopted on the Union’s behalf with regard to the decision of the Participants to the Sector Understanding on Export Credits for Civil Aircraft
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular Article 207(4), first subparagraph, in conjunction with Article 218(9) thereof,
Having regard to the proposal from the European Commission,
Whereas:
(1)The guidelines contained in the Arrangement on Officially Supported Export Credits (the ‘Arrangement’) including those in the Sector Understanding on Export Credits for Civil Aircraft (‘Aircraft Sector Understanding, ASU’) in Annex III to the Arrangement, are transposed, and hence made legally binding in the Union by virtue of Regulation (EU) No 1233/2011 of the European Parliament and of the Council 4 .
(2)The envisaged decision on an amendment to the ASU aims at establishing specific rules providing legal certainty and strengthening the level playing field between ASU Participants regarding the support of maintenance and service contracts, spare parts and engine kits exports related to aircrafts covered by the ASU.
(3)It is appropriate to establish the position to be taken on the Union's behalf regarding the amendments of the ASU, as the envisaged decision of the ASU Participants will be binding on the Union and capable of decisively influencing the content of Union law, by virtue of Article 2 of Regulation (EU) No 1233/2011,
HAS ADOPTED THIS DECISION:
Article 1
The position to be adopted on the Union's behalf shall be to support a decision of the ASU Participants regarding the amendment to the ASU aiming at establishing specific rules regarding the support of maintenance and service contracts, spare parts and engine kits exports in line with the annex to this Decision.
Article 2
This Decision is addressed to the Commission.
Done at Brussels,
For the Council
The President
EUROPEAN COMMISSION
Brussels, 17.2.2025
COM(2025) 44 final
ANNEX
to the
Proposal for a Council Decision
establishing the position to be adopted on the Union’s behalf with regard to the decision of the Participants to the Sector Understanding on Export Credits for Civil Aircraft
ANNEX
The position of the European Union is to support the changes to the Sector Understanding on Export Credits for Civil Aircraft of the Arrangement set out in this Annex. References below are made to Articles and Annexes of the Arrangement.
Minor technical changes to the Union’s position may be agreed to by the representatives of the Union within the Participants to the Arrangement without further decision of the Council.
Additions are in bold underline:
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 1 , 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 for spare engines and used aircraft 2 , other than the maximum repayment term, shall be in accordance with the provisions set out in Part 2 of this Sector Understanding.
It is customary to finance goods and services other than new aircraft, used aircraft and new engines with loans that will cover an extended period of contract performance. Therefore the financial terms and conditions to be applied for other goods and services covered by this Sector Understanding shall be in accordance with the provisions set out in Part 2 of this Sector Understanding, except as set out in Article 22 below.
[…]
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.
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.
b)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, the repayment term may be increased to 10 years, provided the transaction meets all the requirements of Article 19 of Appendix II.
c)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. Contract for Conversion/Major Modification/Refurbishing
a)If a transaction for conversion:
1)Iis valued at USD 5 million or more, and
–Mmeets all the requirements of Article 19 of Appendix II, a Participant may offer official support with a repayment term of up to eight years.
–Ddoes 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)Iis 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; and
2)Ttwo years, if the contract value is less than USD 5 million.
22.Maintenance and Service Contracts, Spare Parts 3 (other than Engines) and Engine Kits
a) Except for Article 22 b) below, Tthe Participants may offer official support with a repayment term of up to three five years. after the starting point of credit if the contract value is USD 5 million or more, or two years if the contract value is less than USD 5 million.
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. Article 22 a) shall apply to official support for spare parts in excess of the maximum 5% limit.
c) The Participants shall:
1) require a minimum down payment of 15% of the net price of the spare parts, the engine kits or maintenance and service contracts receiving support at or before the starting point of credit;
2) not provide official support in excess of 85% of the value of the net price of the spare parts, the engine kits or maintenance and service contracts receiving support.
d) ASU MPR rules will apply as set out in APPENDIX II, SECTION 3: Minimum Premium Rates For Goods And Services Other Than Used Aircraft Covered By Part 3 Of This Sector Understanding.
23. Engine Kits
The Participants may offer official support with a repayment term of up to five years.
[…]
Appendix V. List of Definitions
[…]
Starting Point of Credit: For:
–the sale of aircraft including helicopters, and spare engines and parts, at the latest the actual date when the buyer takes physical possession of the goods, or the weighted mean date when the buyer takes possession of the goods
–maintenance and services contracts, spare parts (other than engines) and engine kits 4 , in the case of:
i)parts, spare parts or other physical possession of the goods. For services,: the latest 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
ii)for services contracts where no parts, spare parts or other physical goods are being supported: a) the date of the submission of the invoices to the buyer or acceptance of services by the buyer, or b) the weighted mean date of the submission of the invoices to the buyer or the weighted mean date of acceptance of services by the buyer, or
iii)parts, spare parts or other physical goods and services where financed in the same transaction: the starting point of credit is the later of a) the actual date of acceptance of the goods or the weighted mean date of acceptance of the goods, or b) the actual date of the submission of the invoices to the buyer or actual date of acceptance of services by the buyer or the weighted mean date of the submission of the invoices to the buyer or the weighted mean date of acceptance of services by the buyer.
Where the actual date of acceptance or the weighted mean date of acceptance cannot be defined upfront due to the nature of the goods or services, the starting point of credit may be determined using a reasonable estimate of the relevant date or weighted mean date.