Brussels, 14 July 2023
Today the Council adopted two decisions setting the EU’s position on proposed changes to the Arrangement on officially supported export credits. The EU’s position is to support both amendments.
The Arrangement on officially supported export credits provides a framework for the orderly use of officially supported export credits by fostering a level playing field among exporters. The Arrangement is a gentlemen’s agreement negotiated within the framework of the OECD in 1978, and updated and transposed into EU law since then.
A modernised arrangement
The first decision adopted today concerns the proposed modernisation of the Arrangement. The modernisation aims to allow longer repayment terms and more flexibility in the financial structuring of export credits, such as the frequency, size and pattern of repayment of principal and payment of interest. The purpose of the modernisation is to ensure that the rules are sufficiently flexible in order to secure a level playing field between the countries participating to the Arrangement and to avoid crowding out the private sector.
Supporting the green transition
The second decision concerns the proposed amendment of the Sector Understanding on export credits for renewable energy, climate change mitigation and adaptation, and water projects, contained in an Annex to the Arrangement. The purpose of the change is to expand the scope of the Sector Understanding to allow exports from a broader range of industry sectors to benefit from its terms. Currently, the Sector Understanding focuses only on some sectors of energy generation and transmission. Expanding the scope will enable export credit agencies to play a greater role in supporting the green transition and to contribute to the achievement of the objectives of the Paris Agreement. The amendment also aligns the criteria for identifying adaptation projects more closely with the standards used by development banks.
Next steps
The decisions enter into force immediately after their adoption. The Council will inform the European Parliament of the decisions. They will be published in the EU’s Official Journal.
The reform of the Arrangement will come into effect once all participants have completed their formal internal decision-making processes and agreed to the new Arrangement text, in principle on 15 July 2023.
Background
Governments support national exporters by providing officially supported export credits through Export Credit Agencies (ECAs). Such support takes the form of either ‘official financing support’ or ‘pure cover support’, such as export credit insurance or guarantee cover. The Arrangement on officially supported export credits provides a regulatory framework for this.
In June 2019, the EU initiated a modernisation of the Arrangement and put a first broad proposal on the table at the OECD, following which, in 2020, the participants agreed in principle to modernise the Arrangement.
The participants to the Arrangement are the EU, Australia, Canada, Japan, Korea, New Zealand, Norway, Switzerland, Türkiye, the United Kingdom, and the United States.
On 31 March 2023, the OECD submitted proposals to the participants to the Arrangement to modernise the Arrangement on the one hand and to amend the Sector Understanding on Export Credits for Renewable Energy, Climate Change Mitigation and Adaptation, and Water Projects contained in Annex IV (the ‘CCSU’) to the Arrangement, on the other hand.
On 23 May 2023 the Participants reached an agreement in principle on the proposals.
- Council Decision establishing the position to be taken on behalf of the European Union regarding the decision of the Participants to the Arrangement on Officially Supported Export Credits on amendments to that Arrangement
- I/A item note
- Statements
- Council Decisions establishing the position to be taken on behalf of the European Union on amendments to the Sector Understanding on Export Credits for Renewable Energy, Climate Change Mitigation and Adaptation, and Water Projects
- I/A item note
- Statements
Source – EU Council