on the position to be taken on behalf of the European Union in the Meeting of the Participants to the Arrangement on Officially Supported Export Credits

EXPLANATORY MEMORANDUM

1.Subject matter of the proposal

This proposal concerns the decision establishing the position to be taken on the Union's behalf in the Meeting of the Participants to the Arrangement on Officially Supported Export Credits (the ‘Meeting of the Participants’) in connection with the envisaged adoption of a decision concerning the request from Turkey to become a Participant to the Arrangement on Officially Supported Export Credits (‘the Arrangement’) of the Organisation for Economic Cooperation and Development (‘OECD’).

2.Context of the proposal

2.1.The Arrangement on Officially Supported Export Credits

The Arrangement is a Gentlemen's Agreement among the EU, the US, Canada, Japan, Korea, Norway, Switzerland, Australia and New Zealand which aims to provide a framework for the orderly use of officially supported export credits. In practice, this means providing for a level playing field (whereby competition is based on the price and quality of the exported goods and not the financial terms provided) and working to eliminate subsidies and trade distortions related to officially supported export credits. The Arrangement entered into force on April 1978, it is of indefinite duration and, although it receives the administrative support of the OECD Secretariat, is not an OECD Act.

The Arrangement is subject to regular updates to take into account new technical and policy developments affecting export credits in various sectors. The Arrangement has been transposed, and hence been made legally binding in the EU, by Regulation (EU) No 1233/2011 of the European Parliament and of the Council. Updates are incorporated into EU legislation through delegated Acts pursuant to Article 2 of this Regulation.

2.2.The Meeting of the Participants to the Arrangement on Officially Supported Export Credits

Article 67 of the Arrangement provides that "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".

The European Commission represents the Union in the Meeting of the Participants, where decisions on all modifications to the Arrangement are taken by consensus. The position of the Union is adopted by the Council and discussed with Member States’ representatives within the Working Group on Export Credits.

2.3.The envisaged act of the Meeting of the Participants to the Arrangement on Officially Supported Export Credits

Article 3 of the Arrangement provides that "Other OECD Members and non-members may be invited to become Participants by the current Participants". Turkey has been an OECD Member since 2 August 1961.

By letter dated 20 September 2017 and addressed to the Chairman of the Meeting of the Participants to the Arrangement, Turkey requested to become a Participant to the Arrangement.

Turkey's request was discussed at the Meeting of the Participants in confidential session on 15th November 2017. No decision was taken as the Participants, including the EU, did not have a position on the issue.

In the week of 12th November 2018 the Meeting of the Participants to the Arrangement is to adopt a decision regarding this request from Turkey (‘the envisaged act’).

The envisaged act will become binding on the parties in accordance with Article 67 of the Arrangement.

3.Position to be taken on the Union's behalf

Turkey has been an observer to the Arrangement since 2006.

Turkey is already under the obligation to comply with EU legislation on officially supported export credit policy, pursuant to Article 12 of the EU-Turkey Customs Union Agreement which provides that: