2002/634/EC: Council Decision of 22 July 2002 amending Decision 2001/76/EC in respect of export credits for ships
Date: 2002-07-22
Institutions: Council of the European Union
Subjects: OECD, aid system, export credit, export financing, sectoral agreement, vessel

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II

(Acts whose publication is not obligatory)

COUNCIL

COUNCIL DECISION

of 22 July 2002

amending Decision 2001/76/EC in respect of export credits for ships

(2002/634/EC)

THE COUNCIL OF THE EUROPEAN UNION,

HAS ADOPTED THIS DECISION:

Having regard to the Treaty establishing the European Commu-
nity, and in particular Article 133 thereof,

Having regard to the proposal from the Commission,

Whereas:

(1)

(2)

(3)

(4)

The Community is a party to the Arrangement on guide-
lines for officially supported export credits concluded
within the OECD, hereinafter referred to as ‘the Arrange-
ment’.

By virtue of Council Decision 2001/76/EC of 22
December 2000 replacing the Decision of 4 April 1978
on the application of certain guidelines in the field of
officially supported export credits (1), the Arrangement
on guidelines for officially supported export credits,
which is annexed to the Decision, applies in the Commu-
nity.

The participants in the Arrangement,
in conjunction
with the participants in OECD Working Party No 6 on
shipbuilding, have decided to update the specific guide-
lines on export credits applicable to this sector, as laid
down in Annex I to the Arrangement. The participants
in the Arrangement have,
the
OECD, approved the new sector Understanding on
export credits for ships.

in the framework of

The Arrangement continues
to apply to ships not
covered by the sector Understanding, and also to ships
that are covered insofar as the Understanding does not
specifically provide otherwise.

(5)

Decision 2001/76/EC should be amended accordingly,

Article 1

The Annex to Decision 2001/76/EC is hereby amended as
follows:

1. Article 3(a) shall be replaced by the following:

‘(a) Sh i p s

The Arrangement shall apply to ships not covered by
the Sector Understanding on Export Credits for Ships,
which has been adopted by all Participants to the
Arrangement as an Annex to the Arrangement (Annex
I). For the Participants to the Sector Understanding, the
shall apply to ships covered by that
Arrangement
Understanding, except
that where a corresponding
provision exists in the Sector Understanding, which
complements
the Sector Under-
standing shall prevail.’;

the Arrangement,

2. Article 49(a)(4) shall be deleted;

3. Annex I shall be replaced by the text in the Annex to this

Decision.

This Decision is addressed to the Member States.

Article 2

Done at Brussels, 22 July 2002.

For the Council

The President

P. S. MØLLER

(1) OJ L 32, 2.2.2001, p. 1.

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ANNEX

‘ANNEX I

SECTOR UNDERSTANDING ON EXPORT CREDITS FOR SHIPS

CHAPTER I

SCOPE OF THE SECTOR UNDERSTANDING

1.

Participation

The Participants to the Sector Understanding are: Australia, the European Community (which includes the following
countries: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands,
Portugal, Spain, Sweden, and the United Kingdom), Japan, Korea, Norway, Poland and the Slovak Republic.

2.

Scope of application

This Sector Understanding, which complements the Arrangement, sets out specific guidelines for officially supported
export credits relating to export contracts of:

2.1. Any new sea-going vessel of 100 gt and above used for the transportation of goods or persons, or for the
performance of a specialised service (for example, fishing vessels, fish factory ships, ice breakers and as dredgers, that
present in a permanent way by their means of propulsion and direction (steering) all the characteristics of
self-navigability in the high sea), tugs of 365 kW and over and to unfinished shells of ships that are afloat and
mobile. The Sector Understanding does not cover military vessels. Floating docks and mobile offshore units are not
covered by the Sector Understanding, but should problems arise in connection with export credits for such
structures, the Participants to the Sector Understanding (hereinafter the Participants), after consideration of substan-
tiated requests by any Participant, may decide that they shall be covered.

2.2. Any conversion of a ship. Ship conversion means any conversion of sea-going vessels of more than 1 000 gt on
condition that conversion operations entail radical alterations to the cargo plan, the hull or the propulsion system.

2.3.

(i) Although hovercraft-type vessels are not included in the Sector Understanding, Participants are allowed to grant
export credits for hovercraft vessels on equivalent conditions to those prevailing in the Sector Understanding.
They commit themselves to apply this possibility moderately and not to grant such credit conditions to
hovercraft vessels in cases where it is established that no competition is offered under the conditions of the
Sector Understanding.

(ii) In the Sector Understanding, the term “hovercraft” is defined as follows: an amphibious vehicle of at least 100
tons designed to be supported wholly by air expelled from the vehicle forming a plenum contained within a
flexible skirt around the periphery of the vehicle and the ground or water surface beneath the vehicle, and
capable of being propelled and controlled by aircrews or ducted air from fans or similar devices.

(iii) It is understood that the granting of export credits at conditions equivalent to those prevailing in this Sector
Understanding should be limited to those hovercraft vessels used on maritime routes and non-land routes,
except for reaching terminal facilities standing at a maximum distance of one kilometre from the water.

CHAPTER II

PROVISIONS FOR EXPORT CREDITS AND TIED AID

3. Maximum repayment term

The maximum repayment term,

irrespective of country classification,

is 12 years after delivery.

4. Cash payments

The Participants shall require a minimum cash payment of 20 % of the contract price by delivery.

5. Repayment of principal

The principal sum of an export credit shall be repaid in equal instalments at regular intervals of normally six months
and a maximum of 12 months.

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6. Minimum premium

The provisions of the Arrangement in relation to minimum premium benchmarks shall not be applied until such
provisions have been further reviewed by the Participants to this Sector Understanding.

7. Aid

Any Participant desiring to provide aid must, in addition to the provisions of the Arrangement, confirm that the ship
is not operated under an open registry during the repayment term and that appropriate assurance has been obtained
that the ultimate owner resides in the receiving country, is not a non-operational subsidiary of a foreign interest and
has undertaken not to sell the ship without his government's approval.

CHAPTER III

PROCEDURES

8. Notification

For the purpose of transparency each Participant shall, in addition to the provisions of the Arrangement and the
IBRD/Berne Union/OECD Creditor Reporting System, provide annually information on its system for the provision
of official support and of the means of implementation of this Sector Understanding, including the schemes in force.

9. Review

(a) The Sector Understanding shall be reviewed annually or upon request by any Participant within the context of
the OECD Working Party on Shipbuilding, and a report made to the Participants to the Arrangement.

(b) To facilitate coherence and consistency between the Arrangement and this Sector Understanding and taking into
account the nature of the shipbuilding industry, the Participants to this Sector Understanding and to the
Arrangement will consult and coordinate as appropriate.

(c) Upon a decision by the Participants to the Arrangement to change the Arrangement, the Participants to this
Sector Understanding (the Participants) will examine such a decision and consider its relevance to this Sector
Understanding. Pending such consideration the amendments to the Arrangement will not apply to this Sector
Understanding. In case the Participants can accept the amendments to the Arrangement they shall report this in
writing to the Participants to the Arrangement. In case the Participants cannot accept the amendments to the
Arrangement as far as their application to shipbuilding is concerned they shall inform the Participants to the
Arrangement of their objections and enter into consultations with them with a view to seeking a resolution of
the issues. In case no agreement can be reached between the two groups, the views of the Participants as regards
the application of the amendments to shipbuilding shall prevail.

(d) Upon entry into force of the “Agreement Respecting Normal Competitive Conditions in the Commercial
Shipbuilding and Repair Industry” this Sector Understanding shall cease to apply for those Participants who are
legally required to apply the 1994 Understanding on Export Credits for Ships (C/WP6(94)6). Such Participants
shall work for an immediate review to bring the 1994 Understanding in accordance with this Sector Under-
standing.

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Attachment

COMMITMENTS FOR FUTURE WORK

In addition to the future work of the Arrangement, the Participants to this Sector Understanding agree:

(a) to develop an illustrative list of types of ships which are generally considered non-commercially viable, taking into

account the disciplines on tied aid set out in the Arrangement;

(b) to review the provisions of the Arrangement in relation to minimum premium benchmarks with a view to

incorporating them into this Sector Understanding;

(c) to discuss, subject to the developments in relevant international negotiations, the inclusion of other disciplines on

minimum interest rates including a special CIRR and floating rates;

(d) to discuss the applicability of yearly instalments of repayment of principal.’