ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(79)268
Vol.1979/0105

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COMMISSION
OFTHE
EUROPEANCOMMUNITIES
GeneralSecretariatCOM(79)268 final
Brussels,22thMay1979
FOROFFICIALUSEONLY
RECOMMENDATION FORACOUNCILDECISION
ONTHECOMMUNITY'SPOSITION WITHINTHEO.E.C.D.
REGARDING COMMUNITY PARTICIPATION INTHE.
UNDERSTANDING ONEXPORTCREDITS FORSHIPS
ANDAMENDMENTS TOTHATARRANGEMENT
(presented bytheCommissiontotheCouncil)
COM(79)268def.

.EXPLANATORY MEMORANDUM
ForseveralmonthstheOECDCouncilWorkingPartyNo6onShipbuilding has
beenstudyingt+vedesirability ofadaptingtheOECDUnderstanding on
ExportCreditsforShipsinthelightofcurrenttrendsontheshipbuilding
marketandtheentryintoforceoftheArrangement onGuidelinesfor
Officially SupportedExportCredits.Thediscussions whichhavetakenplace
sinceJuly1978intheOEC^intheWorkingPartiesoftheCouncilofthe
Communities andbetweentheCommission andtheMemberStateshavepushed
forwardtheexamination ofthisproblemtoapointwhereitisnow
appropriate tomoveontothenegotiations properandtoseekadecisionfrom
theCounciloftheCommunities concerning thepositiontobeadoptedby.
theCommunityattheriegdEPiations whicharetobeheldintheOECD.These
negotiations willdealwithamendmentstothepresentUnderstanding .Since
thesubjectmatter.comeswithinthescopeoftheCommunity'scommercial ''
policy,thesenegotiations willhavetobeledbytheCommissioninconsul­
tationwithaspecialcommitteeappointedbytheCounciltoassistinthis
task.Thefactthatexportcreditscomewithinthescope.ofArticle113of
theTreatyalsorequirestheexclusiveparticipation oftheCommunityinthe
Understanding .
TheUnderstanding onExportCreditsforShips,thefirstinternational
understanding inthefieldofexportcredits,cameintoforcefollowingthe
adoptionofaResolution bytheOECDCouncilatitsmeetingof30May1969.
Themajoramendmentstoitweremadeon16December1979and18July1974.
\
Fourteencountries,includingsevenCommunity MemberStates(Belgium,Denmark,
France,Germany,Italy,theNetherlands andtheUnitedKingdom)participate
intheUnderstanding .Otherparticipants areAustralia,Canada,Finland,
Japan,Norway,SpainandSweden.Themajorshipbuilding countriesalso
belongtotheUnderstanding .Spain,however,hasjustannounceditsdecision
towithdrawfromtheUnderstanding citingitsunsuitabilityinthepresent
situation.Moreover,theUnitedStatesofAmerica,whichisnotanimportant
exporterofshipsbutwhosepotentialcapacities mustnotbeignored,does
notparticipate intheUnderstanding .

ThepresentUnderstanding specifiesthecredittermswhichtheparticipating
countriesmustnotexceedandcontainsanumberofprovisionsregarding
procedure.Thecreditterms,namelyminimumdown-payment of30%,maximum
repaymenttermofsevenyearsandminimuminterestrateof8%,areless
favourablethanthoseoftheGuidelinesforOfficiallySupportedExport
Credits,whichcameintoforcein1978.
e
Asaresulttheshipbuilding sector,whichisgoingthroughaseriouscrisis,
issubjecttoevenstricterconditionsthanotherindustrialsectorswhen
itcomestoexportcredit.Althoughitishardlylikelythattheeasingof
credittermswillcontributetoasignificantincreaseinordersandthereby
toanimprovementinthesituationoftheshipbuilding industry,itis
nevertheless truethatthestrictarrangements appliedtoexportcredits
forshipsmustbeconsideredabnormal.
TheideaofapplyingtoshipsthecredittermsfixedintheGuidelinesfor
OfficiallySupportedExportCreditsappearsattractiveatfirstsight.
However,bearinginmindthemobilityofships,itisharcilypossibleto
makedistinctions asregardscredittermsonthebasisofthecountryof
destination .Ifclause6ofthepresentUnderstanding isretaineditwill
bepossibleformorefavourableconditionstobegrantedforgenuineaid
reasons.Butgrantingmorefavourableconditionsofcredittocertaincountries,
asprovidedforintheGuidelines,couldresultinordersbeingconcentrated
onthosecountriesandcouldentailunfavourable consequences forCommunity
shipowners.SucharesultcouldjeopardizetheCommunity'smaritime
transportpolicyandcouldaffecttheavailability ofship'tonnage ina
crisis.However,thenegotiations couldinvestigate waysofreducingthe
gapbetweenthepresentproceduresintheUnderstanding onShipsandthose
oftheArrangement onGuidelines.ThefinalformoftheUnderstanding on
I,
ExportCreditsforShips,namelyitsmaintenanceasanindependent
arrangementoritsintegrationunderappropriateconditionsintheArrangement
onGuidelineshasstilltobedecided.Itwilldependontheimportance
whichtheparticipants inthenegotiationsattachtothealignmentofexisting
proceduresandthepossiblewinningoverofnewcountriestoajoint
disciplineforships.

Theparticipants inthepresent .Understanding onExportCreditsforShips
aretheMemberStatesandnon-member countries.Sinceexportcredits
comewithinthescopeoftheCommunity'scommercialpolicy,theCommunity
alonemustbeapartytotheUnderstanding .TheCommunity'sparticipation
intheArrangement onGuidelinesforOfficially SupportedExportCredits
constitutes a-precedentinthismatter.TheCommunity'sparticipation will
affectalltheMemberStatesincludingIrelandandLuxembourg,whichdonot
belongtothepresentUnderstanding .Recentdiscussions haveshownthatthose
r
countriesarenotopposedtothisparticipation .
Itgoeswithoutsayingthattheresultsofthenegotiations caninnoway
affectCouncilDirectiveof4April1978onaidtoshipbuilding .Sincethe
Directivealsoconcernstheconversion ofships,itisusefultomakethe
othermembersoftheUnderstanding subjecttothesamediscipline asthe
countriesoftheCommunity.Itisthereforeproposedto"haveitrecognized
thattheUnderstanding shouldcovernotonlynewshipsbutalsotheconversionof
ships.ThenewUnderstanding wouldnothaveanyinfluenceontheprovisions
oftheTreatyconcerningaids(Articles92and93).ThereforetheCommunity's
agreementtoeasingcredittermsmustinnowaybeconsidered asanabandonment
ofitspolicyofresistancetoanyincreaseinordevelopmentofotheraids
toshipbuilding .
TheCommissionconsidersitappropriate thattheCouncilshouldadopt
directives ontheCommunity'spositionandtothisendrecommendsthat
itadoptthedecisionthedraftofwhichisattachedhereto.

RECOMMENDATION FORACOUNCILDEQISIONONTHECOMMUNITY'SPOSITION
WITHINTHEOECDREGARDING COMMUNITYPARTICIPATION INTHEUNDERSTANDING
ONEXPORTCREDITSFORSHIPSANDAMENDMENTS TOTHATARRANGEMENT .
THECOUNCILOFTHEEUROPEANCOMMUNITIES,
HavingregardtotheTreatyestablishingtheEuropeanEconomicCommunity,
andinparticularArticle113thereof, r
HavingregardtotheRecommendation fromtheCommission,
WhereasdirectivesshouldbeadoptedonthepositionwhichtheCommunity
istoadoptwit.t^ntheOECDregarding .Communityparticipation inthe
Understanding onExportCreditsforShipsandamendmentstothatUnder­
standing,
HASDECIDEDASFOLLOWS:
SoleArticle
InthenegotiationswithintheOECDontheCommunity'sparticipation
intheexistingUnderstanding onExportCreditsforShipsandamendments
tothatUnderstanding,theCommissionshallexpresstheCommunity'sposi­
tioninaccordancewiththedirectivesannexedhereto.
*• "
ItshallproceedinconsultationwiththeSpecialCommitteeprovided
1
forinArticle113oftheTreaty,whichshallassistitinitstask.
FortheCouncil,
DoneatBrussels,

•I
,¥
\
l
ANNEX
I.SUBJECT
A)Understanding_referred_to_in_th ese_directives
TheUnderstanding referredtoistheUnderstanding onExportCredits
forshipsadoptedbyaResolutionoftheOECDCouncilon30May
1969andamendedbytheResolutions of16December1970and18July
1974. f
B)Scope
TheUnderstanding concernsthecredittermsapplicabletoship
exportsinrespectofwhichofficialfacilitiesaremadeavailable.
■•W-
II.NEGOTIATING DIRECTIVES
A)The_Communits_£arti_cigation_in_theJJnder standing
SinceexportcreditscomewithinthescopeoftheCommunity'scom­
mercialpolicy,thepresentparticipation ofsevenMemberStatesof
theCommunityintheUnderstanding onExportCreditsforShipsmust
bereplacedbytheparticipation oftheCommunityassuch.
B)Amendments_to_the_Unde rstand^ing
1.Creditterms
Forallcontractsrelatingtothebuildingofanewshiporthe
conversionofanoldone,the.newUnderstanding willbedrawn
uponthefollowingbasis:
-Thedown-paymenttobemadebeforedeliverymustbeatleast
20%ofthecontractprice,
-Themaximumcreditrepaymenttermasfromthedateofdelivery
will:beeightandahalfyears.Repaymentwillbeeffected
inequalinstalmentsatsix-monthlyintervals,
-Retentionoftheminimuminterestrateof8%asinthepre­
sentUnderstanding ,
-Thesetermswillbethesariifeforallareasofdestination .
Thepossibilityofgrantingmorefavourableconditionsonan
exceptionalbasisandforgenuineaidreasonswillbemain­
tained,

\-2-
.Procedures
FortheamendedUnderstanding ,awaywillhavetobesought
thatwillmakeitpossibleforprocedurestobedevisedthat
bringthoseofthepresentUnderstanding onExportCreditsfor
.ShipsclosertothoseoftheArrangement onGuidelinesforOffi­
ciallySupportedExportCredits(theConsensus).
*5»...
Thefinalformofthesolutiontotheproblemofexportcredits
forshipswillbedeterminedduringthenegotiations .Itwill
dependonthefollowingtwo-foldobjective :thewidestpossible
rationalization oftheprocedurestobeappliedandtheadherence
ofthegreatestnumberofparticipants tothfsnewregime.'