Applying OECD guidelines in the field of officially supported export credits

 

SUMMARY OF:

Regulation (EU) No 1233/2011 on the application of certain guidelines in the field of officially supported export credits

WHAT IS THE AIM OF THIS REGULATION?

It ensures that the EU applies the Organisation for Economic Co-operation and Development’s (OECD) arrangement laying down rules under which the national export credit agencies can offer financial support to their exporters.

The terms are set out in the non-binding Arrangement on Officially Supported Export Credits, known as ‘the Arrangement’, the latest edition of which was published in January 2019. They are intended to guarantee a level playing field for officially supported export credits in the international markets.

The regulation replaces Decisions 2001/76/EC (officially supported export credits) and 2001/77/EC (framework agreement on project finance in the field of officially supported export credits).

KEY POINTS

The OECD Arrangement:

• aims to encourage competition among exporters based on the quality and price of goods and services exported, not on the most favourable financial terms and conditions they could obtain from their governments;
• applies to all official support by, or on behalf of, a government for the export of goods and/or services, including financial leases, with a repayment period of 2 or more years;
• identifies the following different types of official support and sets clear limits on their use
  • export credit guarantees or insurance
  • financing, such as direct credit or interest rate assistance
  • tied aid* and trade-related untied aid;
• contains specific conditions for
  • ships
  • nuclear power plants
  • civil aircraft
  • renewable energy, climate change mitigation and adaptation, and water projects
  • rail infrastructure
  • coal-fired electricity generation projects;
• does not apply to exports of military equipment and agricultural commodities.

The European Commission:

• has had the power, since 9 December 2011, to use delegated acts, under certain conditions, to incorporate directly into EU law any changes to the OECD Arrangement;
• produces an annual review for the European Parliament on the information it receives in the national annual activity reports (see below);
• has provided the European Parliament, since 2011, with an annual report on its international negotiations to establish global standards on officially supported export credits.

In the interests of transparency, EU countries must send the Commission an annual activity report detailing:

• assets and liabilities;
• claims paid and recoveries;
• new commitments;
• exposures;
• premium charges;
• environmental risks and how they are taken into account.

FROM WHEN DOES THE REGULATION APPLY?

It has applied since 9 December 2011.

BACKGROUND

The OECD Arrangement came into effect on 1 April 1978 and is open-ended. It is a voluntary, rather than legally binding, agreement among the participants. While not an official OECD act, it has the organisation’s administrative support.

In addition to the EU, the following countries participate in the Arrangement: Australia, Canada, Japan, Korea, New Zealand, Norway, Switzerland and the United States.

Current participants may invite other OECD members and non-members to join the Arrangement.

KEY TERMS

MAIN DOCUMENT

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 (OJ L 326, 8.12.2011, pp. 45-112)

Successive amendments to Regulation (EU) No 1233/2011 have been incorporated into the original document. This consolidated version is of documentary value only.

last update 21.02.2019