Proposal for a COUNCIL DECISION amending the Decision of 4 April 1978 on the application of certain guidelines in the field of officially supported export credits
Date: 1995-07-12
Institutions: European Commission
Subjects: State aid, aeronautical industry, export aid, export credit, export financing, export policy

COMMISSION  OF THE EUROPEAN  COMMUNITIES 

Brussels,  12.07.1995 
TOM05)  336  final 

95/01X5 (COD) 

Proposal  for a 

COUNCIL  DECISION 

amending the Decision of 4 April 1978 
on the application of certain guidelines 
in the field of officially  supported 
export credits 

(presented  by the Commission) 

r 

.^B ' 

Explanatory memorandum 

1. On 4 April 1978 the Council adopted a Decision concluding the Arrangeront 
on Guidelines  for Officially  Supported Export Credits on behalf of th< 
Community.  A Council Decision dated 14 December  1992 gives effect to the 
Arrangement  in the Community  for an unlimited duration. 

2. An annex to the Arrangement contains a sector Understanding  setting o\Jt 
special guidelines on export credits for civil aircraft;  this binds 
Consensus Participants to observe certain rules in insuring and financing 
their sales not only of large commercial aircraft but of other civil 
aircraft as well. 

3. The Participants have now negotiated additional guidelines applying to 

export sales of used aircraft, spare engines and spare parts, and 
maintenance and service contracts. 

4. The Commission has found the Arrangement  since the outset to provide an 
effective  international discipline clearly exerting a downward  pressure 
on the level of subsidies and helping prevent distortions of competition 
linked to officially-supported export finance and insurance.  It thus 
favours the introduction of further guidelines as a means of  improving 
that discipline. 

5. The Commission therefore proposes that the Council adopt the draft 

decision ratifying  in full the amendments adopted by the Participants. 

J 

Proposal for a 

COUNCIL DECISION 

amending the Decision of 4 April 1978 
on the application of certain guidelines 
in the field of officially  supported 
export credits 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing  the European Community, and in 
particular Article 113 thereof, 

Having regard to the proposal  from the Commission, 

Whereas the Community  is a party to the Arrangement on Guidelines for 
Officially Supported Export Credits  (herinafter referred to as "the 
Arrangement"; 

Whereas the Arrangement  is the subject of the Council Decision of 
4 April 1978; whereas the Annex to that Decision was last amended by the 
Council Decision of 14 December  1992;* 

Whereas the Participants  in the Arrangement have drawn up additional 
guidelines for exports of used aircraft, spare engines and spare parts, and 
maintenance and service contracts; 

Whereas the text in Annex IV to the Decision of 4 April 1978 must be 
replaced by the new text of Annex IV to the Arrangement, 

HAS ADOPTED THIS DECISION: 

Article 1 

Annex IV to the Council Decision of 4 April  1978 is hereby  replaced  by the 
text in the Annex to this Decision. 

1  OJ No L 44, 22.2.1993, p. 1. 

This Decision shall apply  immediately, 

Article 2 

This Decision is addressed to the Member States, 

Article 3 

Done at 

For the Council 
The President 

3 

ANNEX IV 

SECTOR UNDERSTANDING ON EXPORT CREDITS FOR CIVIL AIRCRAFT 

CHAPTER I.  NEW LARGE COMMERCIAL AIRCRAFT  „ 

1. 

Form and Scope 

/ 

This  Chapter  complements  the  Arrangement  on  Guidelines  for  Officially 
Supported Export Credits.  Its sets out the particular complementary  guidelines 
that are applicable  to officially  supported  export  credits  for financing  sales 
or  leases  of  large  civil  aircraft  listed  in  the  Appendix  and  supersedes  the 
terms  of  the  OECD  "Standstill"  (TC/ECG/M/75.1,  item  6  and  Annex  III-A)  with 
respect of such aircraft. 

2. 

Objectives of this Chapter 

The  objective  of  this  Chapter  is  to  establish  a  balanced  equilibrium 

that, on all markets: 

-- equalises competitive  financial conditions between participants; 

--  neutralises  finance  among  participants  as  a  factor  in  the  choice 

among competing aircraft;  and 

-- avoids distortions of competition. 

3. 

Credit Terms and Conditions 

a) 

Cash  payments 

The minimum  cash  payment  is  15 per  cent  of  the aircraft's  total  price 
(the price of the airframe and any  installed engines plus the spare engines and 
spare  parts  described  in  paragraph  28).  Participants  shall  not  provide 
official  support  for  such  cash  payments  other  than  insurance  and  guarantees 
against the usual pre-credit risks. 

b) 

Maximum repayment 

term 

The maximum  repayment  term  of  an  officially  supported  credit  is twelve 

years. 

- ^-*° -

4. 

a) 

Interest Rates 

Minimum  Interest 

Rates 

Notwithstanding  the  provisions  of  paragraph  5  below,  the  following 
minimum  interest  rates,  inclusive  of  credit  insurance  premia  and 
guarantees,  apply  where  participants  are  providing  official  financing 
support  by  way  of  direct  credit,  refinancing  or  interest  rate 
subsidy: 

1)  Financing  in US dollars: 

Number of years in 
maximum repayment  term 

Up to 10 years 

Over 10-12 years 

TB 10 + 120 
basis points 

TB  10 + 175 
basis points 

where TB 10 means ten-year Treasury bond yields at constant maturity, 
averaged over the previous two calendar weeks. 

2)  Financing  in  the  currencies  of  the  currency  cocktail  (German  Mark, 

French Franc, UK Pound, ECU)  (1) 

A currency  cocktail package, based on ten-year government bond yields 
for the German mark, French Franc and the UK Pound  (2), plus a margin 
applies.  This  margin,  calculated  as  a  weighted  average  of  the 
margins  applicable  to  each  currency,  is  equal  to  the  margin 
applicable  in the case of  financing  in US dollars. 

In the  case  of  financing  in ECU,  the minimum  rate applicable  is the 
long-term ECU bond yield  (3) less 20 basis points plus a margin  equal 
to the margin applicable  in the case of financing  in US dollars. 

b) 

Interest 

rate 

adjustments 

An adjustment  is made to the minimum rates of interest set out in 
a)  above  if  the  two-weekly  average  of  the  ten-year  government  bond  yields  at 
constant maturity at the end of each two-week period differs by 10 basis points 
or  more  from  the  average  of  the  ten-year  government  bond  yield  at  constant 
maturity  at  the end of  the  last  two  calendar  weeks of June  1985.  When  such a 
change  occurs,  the  levels  of  the  minimum  rates  of  interest  set  out  above  are 
adjusted by the same number of basis  points and  the recalculated minimum  rates 
are rounded  off to the nearest  5 basis points.  Subsequently, minimum  rates of 
interest  are  adjusted  on  a  two-weekly  basis  according  to  the  aforementioned 
method  if  there  is a  change  of  ten  basis  points  or more  in the  interest  rate 
underlying  the  preceding  change  in  minimum  rates  of  interest. 
Similar 
provisions apply to the ECU in the case of changes  in the ECU bond yield. 

c) 

Special 

adjustments 

1)  If a participant  believes  that at  least  two significant  sales  in any 

six-month period: 

i)  for which participants are direct competitors; and 

ii)  on which  offers  have  been  made  with  official  financial  support 

[see paragraphs  5 a) and  b) 1 have  been  concluded  on  a  pure  cover 
basis,  other  than  PEFCO,  at  a  fixed  interest  rate  below  the 
applicable minimum  interest  rates  specified  in this Chapter;  the 
participants  shall  consult  immediately  in order  to  determine  the 
interest  rates on the basis of which the sales have been  concluded 
and,  if necessary,  to find a permanent  solution  that  ensures  that 
the objectives of paragraph 2 are fully met. 

2)  If during these consultations: 

i)  it cannot  be  determined  whether  the  interest  rates  for  the  sales 
in  question  were  at,  above,  or  equivalent  to  the  applicable 
minimum  interest rates specified  in this Chapter;  and 

ii)  if a solution cannot be found within thirty days from the start of 
the  consultations;  then  the minimum  interest  rates  specified  in 
paragraph  4 a)  1)  are  reduced  by  15  basis  points,  unless  the 
participants  agree  that  the  sales  concerned  are  not  significant. 
In  no  case  is  the  interest  rate  for  the  ten-year  option  reduced 
below  TB  10  plus  105  basis  points.  Such  adjustments  are  made 
without  prejudice  to continuing  consultations  to  find a  solution, 
including  the  possibility  of  a  recoupment  in  the  event  that 
additional cases do not occur. 

3) If, in any six-month period, two or more sales for which participants 
are  direct  competitors  are  concluded  on  a  floating-rate  pure  cover 
basis, consultations to ensure that the objectives of paragraph 2 are 
fully met  shall be held at the request of any participant. 

d)  Differential 

between  ten  and  twelve  year  financing  options 

(4) 

1) If, subject to the conditions outlined below, at the end of the 

period  between  1st July  1985 and  1st July  1986,  66 per  cent  or  more 
of  all  sales  of  aircraft,  financed  either  by  means  of  official 
support or by PEFCO, have been concluded on a ten-year term, then the 
minimum  interest  rate  on  the  ten-year  financing  option  shall  be 
increased by  15 basis points. 

If, during the following year, 66 per cent or more of all sales 
of  aircraft,  financed  either  by  means  of  official  support  or  by 
PEFCO, have been  concluded on a ten-year  term,  then  the participants 
shall  review  the  differential  between  ten  and  twelve-year  financing 

options with a view to finding a permanent  solution to the problem of 
equating  the differential  between  the two options.  If, on  the other 
hand 66 per cent or more of the above sales have been concluded under 
the  ten  to  twelve-year  financing  option,  then  the  minimum  interest 
rate on  the  ten-year  financing  option  shall be decreased  by  10 basis 
points. 

2) If, subject  to the conditions outlined below, at the end of the 

period  1st  July  1985 and  1st July  1986,  66 per  cent  or more  of  all 
sales  have  been  concluded  on  a  ten  to  twelve-year  term  then  the 
minimum  interest  rate  on  the  ten-year  financing  option  shall  be 
decreased  by  15 basis points. 

If, during the following year, 66 per cent or more of all sales 
of  aircraft  have  been  concluded  under  the  ten  to  twelve-year  term, 
then  the  participants  shall  review  the differential  between  ten  and 
twelve-year  financing  options  with  a  view  to  finding  a  permanent 
solution  to the problem of  equating  the differential between  the two 
options.  If,  on  the  other  hand,  66  per  cent  or  more  of  the  above 
sales  have  been  concluded  under  the  ten-year  option,  then  the 
ten-year minimum  interest rate shall be increased by 10 basis points. 

e) 

Date  of  determination 

of  interest 

rate 

offer 

A participant may offer the borrower a choice of one of the two 

following methods  for selecting the date on which the minimum  interest rate  [as 
defined  in paragraph  4 a)  et  seq.] on  official  fixed  interest  rate  financing 
[see paragraph 5 a) below] and on PEFCO financing  [see paragraph 5 b) below] is 
determined.  The  selection  by  the  borrower  is  irrevocable.  The  minimum  rate 
is: 

i)  the minimum  rate  prevailing  on  the date of  the offer  by  the  lender, 

or 

ii)  the minimum rate prevailing on whichever one of a series of dates may 
be selected by the borrower.  The date selected  shall  in no event be 
later than the date of delivery of the aircraft. 

5.  Amount of Financing 

a) 

Official 

fixed 

interest 

rate 

financing 

1)  The maximum  percentage  of  the aircraft  total price  [as that  term  is 
defined  in paragraph  3 a)] that may be  financed at the fixed minimum 
rates  specified  in  paragraph  4  a)  by  means  of  official  financing 
support  is  62.5  per  cent  when  repayment  of  the  loan  is spread  over 
the entire  life of the  financing and  42.5 per cent when repayment of 
the  loan  is spread over  the later maturities.  Participants  are  free 
to use  either  repayment  approach,  subject  to  the  ceiling  applicable 
to that pattern.  A participant  offering  such a tranche  shall notify 

the other  participants of  the amount, the  interest  rate, the date on 
which  the  interest  rate  is set, the validity period  for the  interest 
rate and the pattern of repayment. 

2)  The Participants will review the two ceilings at the time of each 

review  pursuant  to  paragraph  14  to  examine  whether  one  ceiling 
provides more advantages  than  the other with a view to adjusting  the 
more advantageous so that a balance  is more evenly struck. 

b) 

PEFCO  financing 

1)  Fixed-rate  funds may be officially  financed  in a manner comparable to 
that  provided  by  the  Private  Export  Funding  Corporation  (PEFCO). 
Weekly  information  on  PEFCO's borrowing  costs and applicable  lending 
rates, exclusive of official guarantee  fees on fixed-rate finance for 
immediate disbursement  and  for disbursements  over a series of dates, 
for contract  offers and  for bid offers, shall be communicated  to the 
other participants on a regular basis.  A participant offering  such a 
tranche  shall  notify  the other  participants  of  the  amount,  interest 
rates,  date  on  which  interest  rate  is  set, validity  period  for  the 
interest  rate  and  pattern  of  repayments.  Any  participant  matching 
such  financing  offered  by  another  participant  shall match  it  in all 
of  its terms and conditions other than the validity period of offers 
of commitment  (see paragraph 6) . 

2)  These rates as notified shall be applicable by all participants 

as  long as the twenty-four month disbursement  interest  rate does not 
exceed  225 basis points above TB  10  (see paragraph  4 ).  In the event 
the twenty-four month rate exceeds 225 basis points, participants are 
free  to  apply  the  rate  of  225  basis  points  for  twenty-four  months 
disbursement  and  all  the  corresponding  rates  and  shall  consult 
immediately with a view to finding a permanent solution. 

c) 

"Pure  cover" 

tranche 

Official support by means of guarantees only  ("pure cover") is permitted 
subject  to the ceiling  specified  in d) below.  However, a participant  offering 
such a tranche shall notify the other participants of the amount, term, pattern 
of repayments, and, where possible, interest rates. 

d) 

Total  official 

support 

The  total  amount  of  funds benefiting  from official  support  pursuant  to 
paragraphs  5  a),  b)  and  c)  above  shall  not  exceed  85  per  cent  of  the  total 
price as defined  in paragraph 3 a) above. 

10 

6. 

Validity Period of Commitments 

The duration of  fixed  interest  rate offers of commitment on the 

tranches of financing defined  in paragraphs  5 a) and 5 b) shall not exceed 
three months. 

7. 

Fees 

Commitment and management  fees are not  included  in the interest rate. 

8. 

Security 

Participants retain the right to decide upon security acceptable to 

themselves autonomously and will communicate  fully to other participants on 
this point, as requested or when deemed appropriate. 

9. 

Aid Credits 

There  shall  be  no tied  or  partially  untied  aid  credits  (including  tied 
and partially untied grants)  for any  item covered by the Sector Understanding. 
Participants shall not provide any other kind of  financing on credit conditions 
that  are more  favourable  than  those  set  out  in this Sector  Understanding (5). 
However,  Participants  shall consider  sympathetically  any  requests  for a common 
line for tied or partially untied aid for humanitarian purposes. 

10. 

Model Changes 

It is understood that when a loan contract has been concluded on one 

type of aircraft, the terms contained  therein cannot be transferred  to another 
type bearing a different model designation. 

11. 

Leases 

It is also understood  that a participant may match a twelve-year 

officially  supported  lease transaction with a twelve-year repayment term and 
85 per cent credit  financing support, subject to the other terms and 
conditions of this Chapter. 

12. 

Competition Reference Point 

In the event of officially  supported competition, aircraft that are in 

the list of large civil aircraft  in the Appendix and that compete with other 
aircraft may benefit  from the same export credit terms and conditions. 

11 

13. 

Procedures 

The procedures outlined  in the Arrangement  on Guidelines  for Officially 

Supported Export Credits apply  to this Chapter.  In addition, should any 
participant believe that another participant  is offering an officially 
supported export credit  that  is not  in conformity with the Guidelines without 
giving advance notice, consultations  shall be held within ten days upon 
request. 

14. 

Review 

The information procedures and conditions outlined  in this Chapter are 

subject  in principle to an annual review.  However, the Participants  shall 
review the provisions of this Chapter whenever requested, notably  in relation 
to the possible development  of certain  financing and  interest rate trends  [see 
paragraphs 4 c) and d)]. 

12 

CHAPTER II.  ALL NEW AIRCRAFT EXCEPT LARGE COMMERCIAL  AIRCRAFT 

15. 

Form and Scope 

This Chapter complements the Arrangement  on Guidelines  for Officially 

Supported Export Credits.  It sets out the particular complementing Guidelines 
that are applicable to officially  supported export credits financing  contracts 
for the  international  sale or  lease of  new  (not used) aircraft  not  covered  by 
Chapter I of this Sector Understanding.  It does not apply to hovercraft. 

16. 

Participation 

The rules on participation of the Arrangement  shall apply. 

17. 

Best Endeavours 

The provisions of this Chapter  represent  the most generous terms that 

participants are allowed to offer when giving official support.  Participants 
shall however continue to respect customary market terms for different  types 
of aircraft and shall do everything  in their power to prevent these terms from 
being eroded  (6) . 

18. 

Categories of Aircraft 

The following categories have been agreed upon in view of the 

competitive situation: 

A. Turbine-powered aircraft  -- including helicopters --  (e.g. turbo jet, 
turbo-prop, and  turbo-fan  aircraft), with generally  between  30  to 70 
seats.  In  case  a  new  large  turbine-powered  aircraft  with  over  7 0 
seats  is being developed,  immediate consultations  shall be held  upon 
request  with  a  view  to  agree  on  the  classification  of  such  an 
aircraft  in  this  category  or  in  Chapter  I  of  this  Sector 
Understanding  in view of the competitive situation. 

B. Other turbine-powered aircraft, including helicopters. 

C. Other aircraft, including helicopters. 

An  illustrative  list  of  aircraft  in  categories  A  and  B  is  in  the 

Appendix. 

19. 

Credit Terms and Conditions 

Participants undertake not to support credit terms more favourable than 

those set out  in this paragraph.. 

13 

Category A. 

ten years at SDR-oased  rate for recipient  countries 
classified  in category  III or respective CIRRs. 

Category  B.  seven years at SDR-based rate for recipient  countries 

classified  in category  III or respective CIRRs. 

Category C. 

five years at SDR-based  rate for recipient countries 
classified  in Category  III or res active CIRRs. 

20. 

Sales or Leases to Third Countries  (relay countries) 

In  cases  where  the  aircraft  are  to  be  on-sold  or  on-leased  to  an 
end-buyer  or  end-user  in  a  third  country,  the  interest  rate  "hall  be  that 
applicable to the country of  final destination. 

21. 

Matching Provisions 

In the event of officially  supported competition, aircraft  competing 

with those from another category or chapter shall for a specific sale be able 
to benefit from matching of the same export credit terms and conditions. 
Before making the matching offer, the matching authority  shall make reasonable 
efforts to determine the export credit  terms and conditions the competing 
aircraft benefits from.  The matching authority will be considered to have 
made  such  reasonable  efforts  if  it  has  informed  by  means  ot  instant 
communication  the authority  assumed  to offer  the  terms  it  intends  to  natch of 
its intention to do so but has not been  informed within three working days that 
the  terms  it  intends  to match  will  not  be used  to  support  the  transaction  in 
question. 

22. 

Insurance Premiums and Guarantee Fees 

Participants  shall  not  waive  in part  or  in total  insurance premiums  or 

guarantee fees. 

23. 

Aid Credits 

There  shall  be  no  tied  or partially  untied  aid  credits  (including  tied 
and partially  untied grants)  for any  item covered by the Sector Understanding. 
Participants shall not provide any other kind of financing on credit conditions 
that are more  favourable  than those set out  in this Sector Understanding  (5) . 
However, Participants  shall  consider  sympathetically  any  requests  for a common 
line for tied or partially untied aid  for humanitarian purposes. 

14 

24. 

Consultation and Notification  Procedures 

The  procedures  of  the  Arrangement  shall  apply  to  officially  supported 
export  credits  not  in conformity  with  the  terms  of  this Sector  Understanding. 
In  addition,  should  any  participant  believe  that  another  participant  may  be 
offering  an  officially  supported  export  credit  not  in  conformity  with  this 
Chapter without  giving  advance  notice,  consultations  shall  be held  within  ten 
days upon request. 

25. 

Review 

The provisions of this Chapter are subject to review annually, normally 

during the spring meeting of the Participants of the Arrangement.  In the 
review, the Participants will examine possible modifications of the provisions, 
notably  in order  to bring  them  closer  to market  conditions.  In addition,  if 
market  conditions  or  customary  financing  practices  change  considerably,  any 
participant  is entitled to ask for a special review of the provisions. 

15 

CHAPTER III.  USED AIRCRAFT, SPARE ENGINES, SPARE PARTS, MAINTENANCE  AND 

SERVICE  CONTRACTS 

26. 

Form and Scope 

This  Chapter  complements  the  Arrangement  on  Guidelines  for  Officially 
Supported  Export Credits.  It sets out  the particular  complementing  Guidelines 
that are applicable  to officially  supported  export credits  financing  contracts 
for  the  international  sale  or  lease  of  used  aircraft;  and  of  spare  engines, 
spare  parts,  maintenance  and  service  in  conjunction  with  both  new  and  used 
aircraft.  It does not apply to hovercraft. 

Provisions in Chapter  I and  II apply, except the following: 

27. 

Used aircraft 

Participants  shall  not  support  credit  terms more  favourable  that  those 
set out  in this Sector Understanding  for transactions  concerning  new aircraft. 
Notwithstanding  these rules, the following applies to used aircraft: 

-- when official  financing  support  is to be given, the minimum  interest 

rate shall not be less than the relevant CIRR;  and 

-- the  participants  agree  that  the  normal  repayment  terms  for  used 

aircraft are: 

Age  (years! 

Normal maximum repayment  terms 

Large Aircraft  Category A  Category B  Category C 

1 
2 
3 
4 

5 - 10 

>10 

10 
9 
8 
7 
6 
5 

These  terms  should  be  reviewed  if  the  maximum  lengths  of  credit  for  new 
aircraft are changed. 

16 

28. Spare engines and spare parts 

The  financing  of  these  items when  contemplated  as part  of  the  original 
aircraft  order may  be on  the same terms as  for the aircraft, but  in that  case 
will  be  provided  as  a  function  of  the  size  of  the  fleet  of  each  specific 
aircraft  type,  including  aircraft  being  acquired,  aircraft  already  on  firm 
orders or aircraft already owned, on the following basis: 

-- for the  first  five aircraft of the type  in the fleet: 15 per cent of 

the aircraft price  (airframe and  installed  engines); 

--  for  the  sixth  and  subsequent  aircraft  of  that  type  in  the  fleet: 
10 per cent of the aircraft price  (airframe and installed  engines). 

When  these  items  are  not  ordered  with  the  aircraft,  participants  may 
offer  official  support  for  up  to  5  years  for  new  spare  engines  and  up  to 
2 years for other spare parts. 

For  new  spare  engines  for  large  aircraft,  Participants  may  exceed  the 
standard  maximum  repayment  term  of  five  years  up  to  three  years  where  the 
transaction: 

a)  has a minimum contract value exceeding  $20 million;  or 

b)  includes a minimum of four new spare engines. 

The  contract  value  should  be  reviewed  every  two years  and  adjusted  for  price 
escalation accordingly. 

Participants  reserve  the  right  to  change  their  practice  and  match  the 
practices of competing  Participants  in matters of detail relating to the timing 
of the first repayment with respect to spare engines and spare parts. 

29. 

Maintenance and Service contracts 

Participants may  offer official  financing  support with a repayment  term 

of up to two years  for maintenance and service contracts. 

30. 

Consultation and Notification  Procedures 

Transactions  for used aircraft  exceeding  the normal repayment  terms set 
out  in  paragraph 27,  and  up  to  the  maximum  allowable  terms  specified  in 
paragraphs 3 b) and  19, as the case may  be, of the Sector Understanding,  shall 
be  subject  to  prior  notification  according  to  paragraph 15 a)  of  the 
Arrangement.  Paragraph 10 a) and 12 a) of the Arrangement  shall apply  to these 
repayments terms. 

17 

31. 

Review 

The provisions of this Chapter are subject to review annually, normally 

during the spring meeting of the Participants of the Arrangement.  In the 
review, the Participants will examine possible modifications of the provisions, 
notably  in order  to bring  them  closer  to market  conditions.  In addition,  if 
market  conditions  or  customary  financing  practices  change  considerably,  any 
participant  is entitled to ask for a special review of the provisions. 

18 

NOTES AND REFERENCES 

1. 

The  "currency  cocktail"  financing  for  the  A  300  and  A  310  consists  of 
the following percentages of the following currencies: 

-- Deutschmark or ECU  40 per cent 
-- French franc or ECU  40 per cent 
-- UK pound sterling, or 

US dollar or ECU 

20 per cent 

For the A 320, the  "currency cocktail" consists of the following 
percentages of the following currencies: 

-- Deutschmark or ECU  33.7 per cent  (provisional) 
-- French franc or ECU  40.0 per cent  (provisional) 
--UK  pound sterling, or 

US dollar or ECU 

26.3 per cent  (provisional) 

2. 

At constant maturity, averaged over the previous two calendar weeks. 

3. 

As published by the Luxemburg  Stock Exchange  -- long term bond series, 
averaged over the previous two calendar weeks. 

4. 

For the operational purposes of this paragraph, it is understood that: 

-- the test sample will  include only those cases  in which the two 

financing options have been offered by at  least one participant; 

-- the activation of an  interest  rate adjustment may take place only if 
66 per cent of sales of aircraft according  to one option have been 
concluded under two or more separate transactions; 

-- the term  "sales of aircraft" signifies that each separate aircraft 

sold is included  in the sample. 

5. 

Only untied grants are excluded  from the ban on aid. 

6. 

Best endeavours shall be made  inter alia with respect to the 
willingness to respond  favourably  to the invitation by another 
participant  to consult on possibilities of achieving conditions as 
close to the market as possible, for example in matching. 

19 

APPENDIX 

Illustrative List 

All other similar aircraft  that may be introduced  in the future shall 

be covered by this Sector Understanding and shall be added to the appropriate 
list in due course.  These  lists are not exhaustive and serve only to indicate 
the type of aircraft to be  included  in the different categories where doubts 
could arise. 

LARGE CIVIL AIRCRAFT 

Manufacturer 

Designation 

Airbus 
Airbus 
Airbus 
Airbus 
Airbus 
Airbus 
Boeing 
Boeing 
Boeing 
Boeing 
Boeing 
Boeing 
British Aerospace 
British Aerospace 
British Aerospace 
British Aerospace 
British Aerospace 
Fokker 
Fokker 
Lockheed 
McDonnell Douglas 
McDonnell  Douglas 
McDonnell  Douglas 
McDonnell Douglas 
Lockheed 

A 300 
A 310 
A 320 
A 321 
A 330 
A 340 
B 737 
B 747 
B 757 
B 767 
B 777 
707, 727 
RJ70 
RJ85 
RJ100 
RJ115 
BAe 146 
F 70 
F 100 
L-100 
MD-80 Series 
MD-11 
DC-10 
DC- 9 
L-1011 

20 

CATEGORY A AIRCRAFT 

Turbine-powered aircraft  -- including helicopters  --  (e.g. turbo jet, 

turbo-prop and turbo-fan aircraft), with generally between 30 to 70 seats.  In 
case a new large turbine-powered aircraft with over 70 seats is being 
developed,  immediate consultations  shall be held upon request with a view to 
agree on the classification of such an aircraft  in this Category or in 
Chapter I of this Understanding  in view of the competitive situation. 

Manufacturer 

Designation 

Aeritalia 
Aeritalia/Aérospatiale 
Aeritalia/Aérospatiale 
Aérospatiale/MBB 
De Havilland 
De Havilland 
De Havilland 
Boeing Vertol 
Broman  (U.S.) 
British Aerospace 
British Aerospace 
British Aerospace 
Canadair 
Canadair 
Casa 
Dornier 
EH  Industries 
Embraer 
Fokker 
Fokker 
Fokker 
Gulfstream America 
Saab 
Saab 
Short 
Short 
Short 
etc. 

G 222 
ATR 42 
ATR 72 
C160 Transall 
Dash 8 
Dash 7 
Dash 5 
234 Chinook 
BR 2000 
BAe ATP 
BAe 748 
BAe Jetstream 41 
CL 215T 
RJ 
CN235 
DO 328 
EH-101 
EMB 120 Brasilia 
F 50 
F 27 
F 28 
Gulfstream 1-4 
SF 340 
2000 
SD 3-30 
SD 3-60 
Sherpa 

21 

CATEGORY B AIRCRAFT 

Other turbine-powered aircraft, including  helicopters 

AS 332 
1900 
Super King Air 300 
Starship 1 
206B 
206L 
212 
412 
214 
BAe Jetstream 31 
BAe 125 
BAe 1000 
Hawker 1000 
BAe Jetstream Super 31 
Challenger 601 
CL 215  (water bomber) 
C 212-200 
C 212-300 
Citation 
441 Conquest III 
CD2 
Falcon 
Do 228-200 
EMB 110 P2 
CBA 123 
Merlin/300 
Metro 25 
Metro III V 
Metro III 
Metro III A 
Merlin IVC-41 
20,  30 and 55 series 
Gulfstream  III and IV 
Arava 101 B 
Mu2 Marquise 
P 180 
BN2T Islander 
400 LS 
T  1040 
PA-42-100  (Cheyenne 400) 
PA-42-720  (Cheyenne III A) 
Cheyenne II 
Cessna-Caravan II 
SF 600 Canguro 
W30 

Aérospatiale 
Beech 
Beech 
Beech 
Bell Helicopter 
Bell Helicopter 
Bell Helicopter 
Bell Helicopter 
Bell Helicopter 
British Aerospace 
British Aerospace 
British Aerospace 
Raytheon Co. Jets Inc. 
British Aerospace 
Canadair 
Canadair 
Casa 
Casa 
Cessna 
"Cessna 
Claudius Dornier 
Dassault Breguet 
Dornier 
Embraer 
Embraer/FAMA 
Fairchild 
Fairchild 
Fairchild 
Fairchild 
Fairchild 
Fairchild 
Gates Learjet 
Gulfstream America 
IAI 
Mitsubishi 
Piaggio 
Pilatus Britten-Norman 
Piper 
Piper 
Piper 
Piper 
Piper 
Reims 
SIAI-Marchetti 
Westland 
etc. 

22 

ISSN 0254-1475 

COM(95) 336 final 

DOCUMENTS 

EN 

02  07 

Catalogue number  : CB-CO-95-369-EN-C 

v 

ISBN 92-77-91559-5 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg 

2>Z